As old fossil fuel-fired power plants retire and new resources fail to keep up with demand, grids across Canada and the United States face “mounting resource adequacy challenges” over the next 10 years, finds a new report by the non-profit North American Electric Reliability Corporation (NERC).
“We are seeing demand growth like we haven’t seen in decades,” said John Moura, NERC’s director of reliability assessment and system analysis. “Our infrastructure is not being built fast enough to keep up with the rising demand.”
In December, NERC released its long-term reliability report, an annual publication that identifies emerging risks to grids in six transmission regions spanning the U.S. and Canada.
This year’s report incorporates the growing role of wind, solar, and battery storage, which perform with greater variability and weather dependence than traditional energy sources. The reliance on weather conditions means renewables tend to perform below nameplate capacity, the maximum output they can achieve under ideal conditions, the report concludes.
The resource mix transformation “is making traditional capacity-based adequacy criteria obsolete,” NERC says. Its latest report includes criteria for “additional dimensions of risk” from weather and environmental conditions.
Exploding energy demand growth driven by the power needs of data centres headlines the trends outlined in the report. Electrified technologies—like electric vehicles and heat pumps—are also increasing demand, and driving a shift towards greater peaking in winter months. This rising demand has outpaced renewable energy gains and increased reliance on fossil fuels. With eight gigawatts of coal and gas-fired generators set to retire over the next decade, NERC warns of an “unclear resource outlook.”
Given the overall projected rise in demand and the variability of new resources, gas-fired generators “are and will remain a critical resource” for reliability in many areas during the next decade, especially during winters, NERC says.
Even with new solar PV, battery, and hybrid resources flooding interconnection queues, “completion rates are lagging behind the need for new generation,” the agency adds. Slow and cumbersome permitting regulations are holding back some of the necessary expansion of capacity and transmission—and while more transmission projects are being built or being developed over the next ten years, many are still in the planning phase, with some likely to be cancelled.
Overall, roughly half of the areas covered by the U.S. and Canadian power grids are at risk of blackout, with the Midcontinent Independent System Operator (MISO) identified as “high risk.” MISO’s capacity is set to drop amid “additional coal-fired generator retirements and slower-than-anticipated resource additions.”
Other regions listed as at “elevated risk” include New England, which faces strong demand growth and gas infrastructure limitations that threaten supply shortfalls in extreme winter conditions. Texas will also face high demand while “the share of dispatchable resources in the mix struggles to keep pace” and extreme winter weather threatens to cause “the most severe load-loss events.”
In Canada, provinces like British Columbia and Manitoba face reduced reliability as drought lowers capacity from hydropower.
“The trends point to critical reliability challenges facing the industry: satisfying escalating energy growth, managing generator retirements, and accelerating resource and transmission development,” NERC writes.
