Western and Midwestern grids may face supply shortfalls as early as this summer, NERC says

Energize Weekly, January 12, 2022

The Midwest and Western grids could face shortfalls in electricity supply and generating capacity as early as this summer as baseload plants retire and weather-related disruptions become more common, according to the North American Electric Reliability Corporation’s (NERC) long-term reliability assessment.

NERC said that part of the challenge comes from the transition the power grid is going through as old fossil-fuel plants and nuclear units are retired and variable, renewable generation, primarily wind and solar, are added.

“This is not an argument against the transition but a recognition that, without a collective focus, system reliability faces risk that is inconsistent with electric power’s essentiality to the continent’s economy,” the assessment said.

Efforts must be made, NERC said, to integrate renewable resources, build more high-voltage transmission and recognize that “natural gas is the reliability ‘fuel that keeps the lights on.’”

Extreme weather – such as the heat waves in the Pacific Northwest and last February’s Arctic freeze in Texas – are also increasingly playing a role in determining reliability.

“When we look at events over the last several years, it is clear that the bulk power system is impacted by extreme weather, and that it is happening more often,” John Moura, NERC director of reliability assessment and performance analysis, said in a statement.

“Prioritizing reliability as climate change policies are developed will support a transition that assures electric reliability in an efficient, effective and environmentally sensitive manner,” Moura said.

NERC said that most areas are projected to have adequate resource capacity to meet annual peak demand associated with normal weather.

“Capacity shortfalls, where they are projected, are the result of future generator retirements that have yet to be replaced with new resource capacity,” the assessment said.

The Western Interconnection faces “a high probability of insufficient resources and energy” to serve electricity demand as early as the summer of 2022.

“Energy risks are present today as electricity resources are insufficient to manage the risk of load loss when wide-area heat events occur,” the assessment said. “Risk is most acute in late afternoon since there are energy limitations as solar photovoltaic (PV) resource output diminishes.”

Dispatchable and flexible generation is needed to fill in for solar. NERC said that action by the California Public Utilities Commission to boost capacity at the Aliso Canyon natural gas storage field is “an encouraging step.”

The planned retirement of the Diablo Canyon nuclear power plant will contribute to further declining reserve margins in the California section of the western grid beginning in 2026.

In the Northwest and Southwest parts of the western grid, the increase in variable resources will raise the risk of energy shortfalls, the assessment said.

The Midcontinent Independent System Operator (MISO), which operates a grid covering 15 states and two Canadian provinces, is seeing its reserve margin shortfall advance to 2024 from 2025. MISO could face the retirement of more than 13 gigawatts of generation over the period from 2021 to 2024.

“The retirement of these traditional resources also accelerates the change in resource mix and punctuates the urgency for implementing resource adequacy and energy sufficiency initiatives in the area,” the assessment said.

Extreme weather could also create reliability problems in other areas of the county, NERC said.

The natural gas infrastructure that supports electricity generation in New England, the Southwest and California is susceptible to disruption. In New England, limited pipeline capacity has forced the region to depend upon fuel oil and imported liquefied natural gas to meet winter peak loads.

Inadequate winterization of thermal and wind generation, that usually don’t experience extreme cold temperatures, in parts of MISO, Southwest Power Pool and Texas remains a significant risk in winter reliability until new NERC winterization requirements highlighted in the February 2021 Cold Weather Outages Report are effective.