According to NERC’s “2023 Long-Term Reliability Assessment” (LTRA), the organization expects sharp increases in peak demand forecasts and the potential for higher generator retirements, which are raising its concerns for electric reliability over the next ten years. The LTRA report noted that the industry faces mounting pressure to keep pace with accelerating electricity demand, energy needs, and transmission system adequacy, as the resource mix transitions.

“The assessment found growth rates of forecasted peak demand and energy have risen significantly since the 2022 LTRA, reversing a decades-long trend of falling or flat growth rates,” said the report. “Electrification and projections for growth in data centers and electric vehicles are contributing to the higher forecasts.” In addition, the report noted that electrification of heating systems is having a pronounced effect on seasonal demand, causing summer-peaking regions in the U.S. Northeast and Southeast to anticipate a change from summer peak-demand season to winter, or even dual-season, peaks.

“We are facing an absolute step change in the risk environment surrounding reliability and energy assurance,” said John Moura, NERC’s director of reliability assessment and performance analysis. “In recent years, we’ve witnessed a decline in reliability, and the future projection does not offer a clear path to securing the reliable electricity supply that is essential for the health, safety, and prosperity of our communities.”

The LTRA went on to note that resource adequacy concerns will be arising throughout the next ten years, stemming from higher demand, generator retirements, and the potential for replacement resources to fall short of capacity and energy needs. “More than 83 GW of fossil-fired and nuclear generator retirements are anticipated through 2033, and more generators have announced plans for retirements,” said the report. “Over the same period, the resource mix continues to transition, as wind, solar photovoltaic and battery resources are added.”

The LTRA also noted that most areas are facing resource adequacy challenges, with many projected to have reserve shortages or emerging energy risks in future years. In addition, the new mix of resources heightens fuel supply concerns as the reliance on just-in-time delivery of natural gas fuel to generation increases.

The amount of bulk power system transmission projects reported as “under construction” or “in planning for construction” in the next ten years has increased. These new transmission projects are being driven to support new generation interconnection and enhance reliability. “However, siting and permitting challenges continue to impose delays in transmission expansion planning,” said the report. “While regional transmission planning processes are adapting to manage the energy transition, impediments to transmission development remain.”

The report’s energy and capacity analysis identified an expanding area for future potential electricity shortfalls. Most areas are projected to have adequate electricity supply resources to meet demand forecasts associated with normal weather. However, there are two regions identified as not having the reserves to meet resource adequacy criteria. These are:

– Midcontinent Independent System Operator (MISO): New resource additions have overcome the planning reserve deficits that were reported in the 2022 LTRA and projected to occur in 2023.

“Beginning in 2028, MISO is projected to have a 4.7 GW shortfall if expected generator retirements occur, despite the addition of new resources that total more than 12 GW,” said the report.

– SERC-Central: There is a shortfall in planned reserves in the 2025–2027 period, as demand forecasts increase faster than the transitioning resource mix grows. “This assessment area will add more than 7 GW of natural gas generation and retire more than 5 GW of coal generation over the period,” said the report.

The LTRA identified four recommendations for energy policymakers, regulators, and the industry itself to promote actions to reliably meet growing demand and energy needs while the resource mix transitions:

1 – Add new resources with reliability attributes, manage retirements, and make existing resources more dependable.

2 – Expand the transmission network to provide more transfer capability.

3 – Adapt bulk power system planning, operations, resource procurement markets, and processes to a more complex power system.

4 – Strengthen relationships among reliability stakeholders.