Key Takeaways
The North American Electric Reliability Corporation (NERC) is predicting that there should be enough electricity adequacy this summer, but concerns about extreme weather events, rapid demand growth, and systemic vulnerabilities pose risks for supply shortfalls and grid reliability.
NERC points to New England, the Midwest, the area from California to Louisiana and parts of Canada as potential trouble spots.
Reserve margins are being reduced as natural gas and coal plants that provide about 60 percent of U.S. electric generation are forced to close and wind and solar replacements operate intermittently, depending on weather.
Utilities are working to increase battery backup for renewables, but the technology is expensive and is lagging in deployment, increasing electricity prices even as the grid becomes less reliable.
According to the North American Electric Reliability Corporation (NERC), all regions across the bulk power system are generally prepared to meet resource adequacy criteria to meet normal peak demand this summer, but ongoing concerns about extreme weather events, rapid demand growth, and systemic vulnerabilities still pose significant risks for supply shortfalls and grid reliability. NERC’s 2024 Summer Reliability Assessment points to elevated risks in certain regions due to variable renewable energy outputs, reduced capacity from the retirement of major generators, surging demand growth, transmission and import limitations, drought complications, and other weather-related risks, including extended heat waves. According to NERC, much of the Midwest, New England and the region from California to Louisiana are at risk as well as British Columbia and Saskatchewan in Canada.
Different regions have different reasons for the elevated risk. For instance, forced retirement of natural gas-powered generators in New England lowers the region’s power capacity, which affects power supply particularly during peak demand. Constellation is planning to retire two natural gas–fired units at the 1.4-gigawatt Mystic Generating Station in Boston on May 31.
Due to their intermittence and operating down time during severe weather, insufficient solar and/or wind power during hours of peak demand could pose reliability issues in Texas, California, the Southwest and the Midcontinental states. Extreme heat waves can make transmitting power from other areas difficult, particularly when demand also rises where there may be excess power or better reserve margins. California, for instance, has traditionally relied on neighboring states during its heat waves. California has the largest generation of solar power in the country, but solar output begins to wane just when residents return home from work and turn on appliances and adjust air conditioning.
California hopes it will benefit from new planned solar and battery resources coming on-line this year, which have ramped up on-peak reserve margins by 47 percent, and the region’s hydropower resources currently appear in good shape. Probabilistic assessments, however, show that the risks of load loss are similar to the Summer 2023 assessment, ranging from negligible to 0.8 loss of load hours depending on how much of the area’s new solar and battery resources (totaling nearly 6 gigawatts of nameplate capacity) are completed over the summer. Extreme demand could pose risks in the Baja (Mexico) portion. In the Southwest, where an ongoing severe drought persists, extreme conditions—surging demand or low resource output—could require additional non-firm imports from neighboring areas.
The Electric Reliability Council of Texas (ERCOT) is grappling with “vigorous growth in both loads and solar and wind resources,” NERC noted. Texas’ grid is bracing for exponential demand growth from crypto mining, data centers and artificial intelligence (AI), electrification in the oil and gas industries, and potential impacts from attempts to develop the hydrogen economy. Texas has the most wind capacity of any U.S. state, but it is not always reliable. During a major storm in February 2022, wind blades froze and there were prolonged power outages, killing a number of Texas residents. Over 4 million electricity customers had to do without power for days, many of those with power received enormous bills, and, most tragically, dozens of people died.
ERCOT intends to plan differently to meet a load growth projection of about 152 gigawatts by 2030—40 gigawatts higher than the same forecast a year before. NERC warned that the region already faces risks of emergency conditions in the summer evening hours, as solar generation ramps down. But contributing to the elevated risk is a potential need, under certain grid conditions, “to limit power transfers from South Texas into the San Antonio region.” These grid conditions can occur when demand is high and wind and solar output is low in specific areas, straining the transmission system and necessitating South Texas generation curtailments and potential firm load shedding to avoid cascading outages. “Conditions could cause overloads on the lines that make up the South Texas export and import interfaces, necessitating South Texas generation curtailments and potential firm load shedding to avoid cascading outages.”
In the Midcontinent Independent System Operator (MISO) region, while it is expected to have sufficient resources, including firm imports for normal summer peak demand, new solar and natural gas–fired generation and additional demand response resources are offset by generator retirements, lower firm imports, and increased reserve requirements. In particular, the region could suffer if wind generator performance flails during periods of high demand. MISO is cognizant of its reliability vulnerabilities and it has taken concerted steps to guard against several critical challenges. The risks, ranging from fleet changes to new complexities related to regulatory incentives and fuel assurances, have been rendered more complex by extreme weather events, load additions, and incremental load growth.
NERC finds that half of the 50 U.S. states are under an elevated risk. They are: Arizona, Arkansas, California, Connecticut, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, New Hampshire, New Mexico, Nevada, North Dakota, Rhode Island, South Dakota, Texas, Vermont and Wisconsin.
While NERC does not anticipate a major blackout, small interruptions may be the case. According to the Energy Information Administration, in 2022, the average American household had their electricity supply interrupted for 5.5 hours. Over half of those hours were due to “major events,” typically extreme weather.
Conclusion
NERC’s 2024 Summer Reliability Assessment finds that a large part of North America remains at risk of supply shortfalls this summer, while other areas show reduced risk due to resource additions. Expected wide-area heat events that affect generation, wind output, or transmission systems coupled with demand growth in some areas are contributing to adequacy risks for resources and transmission. All areas are assessed to have adequate supply for normal peak load due largely to 25 gigawatts of additional solar capacity added since last year. However, energy risks are growing in several areas when solar, wind, and hydro output, the only politically correct resources, are low. NERC’s assessment focuses on the risk of demand outstripping power supply, as traditional generators are being forced to retire due to onerous regulations by the Biden administration and as Biden’s push to electrify everything is increasing power demand as are data centers and AI.
