North American Electric Reliability Corp: AI Poses Threat To North American Electricity Grid

On December 17, the North American Electric Reliability Corporation released the 2024 Long-Term Reliability Assessment (LTRA) highlighting critical reliability challenges that industry is facing over the next 10 years-- satisfying escalating energy growth, managing generator retirements and removing barriers to resource and transmission development. 

As a result, well over half of the continent is at elevated or high risk of energy shortfalls over the next 5 to 10 years. 

While generator retirement plans continue over the next 10 years, electricity demand and energy growth are climbing rapidly. 

New data centers, which have the potential to consume enormous amounts of power and can be built relatively quickly, are driving much of the explosive demand growth. 

Electrification in various sectors and other large commercial and industrial loads, such as new manufacturing facilities and hydrogen fuel plants, are factoring into higher demand forecasts.

“Demand growth is now higher than at any point in the last two decades, and meeting future energy needs in all seasons presents unique challenges in forecasting and planning,” said Mark Olson, NERC’s manager of Reliability Assessments. “Meanwhile, announced generator retirements, over the 10-year period total 115 GW and are largely being replaced by variable generation. The resulting mix of resources will be able to serve energy needs at most times, but will need to have adequate amounts of dispatchable generators with assured fuel supplies, such as natural gas, to be reliable all the time.”

The LTRA, previewed in the 2024 LTRA video, indicates that the summer peak demand forecast is expected to rise by more than 122 GW for the 10-year period (15.7% higher than the current level). 

Since the 2023 LTRA, the 10-year summer peak demand forecast has grown by more than 50%. 

Similarly, the winter peak demand forecast is expected to rise by nearly 14% for the 10-year period.

When compared to last year’s LTRA, indicators point to greater investment and

enhancements in the regional planning processes to support grid expansion with more transmission projects reported as either under construction or in planning for construction over the next 10 years. 

However, John Moura, NERC’s director of Reliability Assessments and Planning Analysis, stressed caution. “While we are encouraged by the significant increase in transmission development, industry and policymakers must address the persistent challenges of siting, permitting, and construction to ensure this growth becomes a reality,” Moura said. “Overcoming these barriers is critical to realizing a more reliable and resilient grid.”

NERC’s Interregional Transfer Capability Study (ITCS) found that an additional 35 GW of transfer capability across the United States would strengthen energy adequacy under extreme conditions. 

Increasing transfer capability between neighboring transmission systems has the potential to alleviate energy shortfalls and could become one of the solutions that entities put in place to address the resource adequacy issues identified in the LTRA.

The LTRA’s energy and capacity analysis identifies areas for future potential electricity shortfalls — most of which are projected to have adequate electricity supply resources to meet demand forecasts associated with normal weather. 

While multiple areas are identified as being at elevated risk in extreme conditions, the Midcontinent Independent System Operator is highlighted as not having the reserves to meet resource adequacy criteria in normal conditions as resource additions are not keeping up with generator retirements and demand growth.

Consequently, reserve margins fall below Reference Margin Levels in both winter and summer.

The assessment identifies recommendations for energy policymakers, regulators, and industry to promote actions to reliably meet growing demand and energy needs while the resource mix transitions--

-- The pace of generator retirements should be carefully scrutinized and managed by industry, regulatory and policy-setting organizations considering the projected reliability risks.

-- Enhance long-term assessment processes by incorporating wide-area energy analysis with modeled interregional transfer capability, as found in the ITCS.

-- Support from regulators and policymakers at the federal, state, and provincial levels is urgently needed to address siting and permitting challenges to remove barriers to resource and transmission development.

-- Collaboration across regulators, electric industry and gas industry member organizations is needed to address the operating and planning needs of the interconnected natural gas-electric energy system.

-- Ensure essential reliability services are maintained by regional transmission organizations, independent system operators and regulators.

Undertaken annually in coordination with the Regional Entities, NERC’s 2024 LTRA is the Electric Reliability Organization’s independent assessment and comprehensive report on the adequacy of planned bulk power system resources to reliably meet the electricity demand across North America over the next 10 years. 

The 2024 LTRA includes a probabilistic assessment and use of energy risk metrics to identify potential supply shortfalls.

Click Here for a copy of the report.  Click Here for LTRA video.

Click Here for the NERC announcement.

NewsClip:

-- Financial Times: North American Electric Reliability Corp: AI Poses Threat To North American Electricity Grid, Watchdog Warns

Resource Links:

-- Utility Dive: North American Electric Reliability Corp: Natural Gas Electric Generation Is Threatened This Winter By Ongoing Concerns About Gas Production, Delivery In Extreme Weather Conditions  [PaEN]

-- Utility Dive: North American Electric Reliability Corp Adopts Standards To Boost Extreme Weather Reliability   [Follow Up To Report Raising Alarm Over Winter Natural Gas Supplies ] 

-- PUC Invites Stakeholder Comments On The Issue Of The Adequacy Of Electricity Supplies In Pennsylvania  [PaEN]

-- PUC Encourages Consumers To Prepare For Dec. 1 Electricity Price Changes; Rates Will Vary From 8.4% Decrease To 31.2% Increase  [PaEN]

-- PUC: Natural Gas Distribution Companies Prepare For Winter - Gas Consumption Expected To Decrease 1.8%, Cost For Residential Customers To Increase 1%  [PaEN]

-- Pennsylvania’s Electric Grid Is Dependent On One Fuel To Generate 59% Of Our Electricity; Market Moving To Renewables + Storage  [PaEN]

-- Public Citizen: LNG Gas Exports Could Cost Pennsylvanians Up To $16 Billion More In Energy Costs  [PaEN]

-- Guest Essay: Renewables Can Help Stop Winter, Summer Power Outages, Avoid Energy Price Spikes - By Matt Walker, Clean Air Council and Julia Kortrey, Evergreen Action [PaEN]

-- House Committee Told Governor’s Energy Plan Diversifies Energy Generation, Avoids One-Fuel Dependence, Improves Grid Reliability, Lowers Consumer Costs, Generates Jobs; Or Upends Competitive Markets And Is A ‘Death Wish’ For Our Economy  [PaEN]

-- House Hearing: Shapiro Administration Supports Expanding Alternative Energy Portfolio Standards; Renewables Lower Energy Costs; Increase Grid Reliability; More Work Needed To Improve Gas Reliability  [PaEN]

Related Articles This Week:

-- North American Electric Reliability Corp: AI Poses Threat To North American Electricity Grid  [PaEN] 

-- US DOE Releases LNG Gas Export Study: Facilities Already Approved Will Meet Global Demand For Decades; Unfettered Exports Would Increase Domestic Natural Gas Prices; Electricity Prices; Costs To Manufacturers  [PaEN]

-- Save The Date: Feb. 27 - Shale Gas And Public Health Conference, Duquesne University  [PaEN] 

NewsClips:

-- The Derrick - Makayla Keating: Aqua PA Cites Existing Problems At Rhodes Utilities Water Companies  [PDF of Article]  [Water Companies Related To Venango County Conventional Well Spill Incident]   

-- Utility Dive: North American Electric Reliability Corp Adopts Standards To Boost Extreme Weather Reliability   [Follow Up To Report Raising Alarm Over Winter Natural Gas Supplies ] 

[Posted: December 17, 2024]  PA Environment Digest