Where Future Generation Will Come From

According to a new report from the U.S. Department of Energy, titled “The Future of Resource Adequacy,” a clean, affordable, reliable, secure, and resilient power system is a critical priority for the United States. It is essential to American households and communities, and fundamental to the nation’s economy. It is also a key national strategy to address climate change and meet our targets to reduce greenhouse gas emissions by 50 percent to 52 percent from 2005 levels by 2030 and a net-zero emissions economy by 2050.

“The power system is at a time of rapid change,” said the report. After a decade of nearly zero growth, electricity demand is increasing and is expected to accelerate over the next ten years due to the expansion of industries like data centers, robust investment in new and existing manufacturing sectors like semiconductors and batteries, and deployment of electric vehicles.

Power supply is evolving, with older fossil fuel units retiring and new deployment of clean energy capacity, most significantly from wind, solar, and battery storage. Aging transmission and distribution infrastructure needs to be modernized. Physical and cybersecurity attacks against energy infrastructure continue to threaten energy security; cybersecurity threats particularly have become more sophisticated, frequent, and severe. Supply chain availability is another risk, as demand for foundational grid equipment like transformers currently far exceeds supply. At the same time, the worsening effects of climate change are increasing the threat to power sector reliability through more frequent, intense, and uncertain extreme weather. The demand for more generation and the rise of new technologies also creates and adds to existing supply chain concerns related to both availability and supply chain security.

Relying solely on additional fossil fuel resources as the default option to meet reliability needs is risky. Reliability is a system attribute – no individual resource is perfectly reliable. Any single technology approach to addressing the combination of challenges is risky, partly due to correlated failures which can jeopardize the entire system during extreme weather.

A portfolio approach that takes advantage of the full range of technology, planning, and operational solutions best ensures reliable, clean, secure, and affordable power. These solutions encompass all parts of the electricity system, including:

1. Generation and Storage. New deployment of technologies such as long-duration energy storage, hydropower, nuclear energy, and geothermal will be critical for a diversified and resilient power system. In the near term, continued expansion of wind and solar can enhance resource adequacy, especially when paired with energy storage. Natural gas generators should proactively develop the ability to use clean hydrogen or be
retrofitted retrofit with carbon capture systems for low-to-zero carbon operation. Investments in and expansions of existing clean energy generators like hydropower and nuclear energy can prevent premature retirements of facilities and support near term needs.

2.  Grid Enhancement and Expansion. Expanding transmission capacity supports resource adequacy through enabling new generation and power transfer within and between regions. Transmission capacity is critical to facilitating the interconnection of energy generation in queues across the country. Reconductoring existing transmission lines, especially with advanced conductors and cabling, can expand transmission capacity on existing rights of way. Interregional transmission can enable neighboring utilities and regions to share resources when needed and take advantage of greater diversity in resources — especially valuable during
extreme weather events. In the near term, deployment of grid enhancing technologies (a collection of advanced sensors, controls, and analytical tools) helps maximize electricity transmission through existing lines.

3. Demand Resources. Accelerating energy efficiency programs and distributed energy resources provide critical tools to support reliability. In the near-term, programs supporting continued deployment of energy efficient end-use technologies can cost-effectively reduce overall demand for power and can be especially valuable when targeted towards demand reduction during typical grid stress periods. Demand response measures provide additional flexibility, whether through simple and low-cost traditional measures or more aggregated demand response programs. Distributed generation and storage resources such as rooftop solrr, behind-the-meter batteries, and electric vehicles with advanced bidirectional charging systems can provide cost-effective energy and capacity, particularly when combined as virtual power plants.

Methods used to assess resource adequacy and how each technology contributes to it need to evolve and are continually improving. System operators and stakeholders are developing better tools, data, and methods for understanding and assessing system needs to help determine the best set of resources to meet complex and fast-changing resource adequacy needs at lowest cost while providing secure and resilient solutions. Emerging market-mechanisms and business models can drive new investments and incentivize operational decisions that enable capacity to meet demand.

The opportunity to invest in the broad suite of technological, analytical, and operational solutions has never been greater. The Inflation Reduction Act (IRA) and the Bipartisan Infrastructure Law (BIL) together make hundreds of billions of dollars available to develop and deploy these solutions in the form of tax credits, loans, investments, and other innovative programs. Clean energy demonstrations are accelerating cost reductions and supporting infrastructure build out for new technology solutions, lowering the risk for the next wave of deployments. These incentives provide motivation to accelerate exploration of all the solutions available and make deploying a much broader set of solutions far more economically attractive, secure, resilient, and realistic. With this portfolio of policies and technologies in hand, and unprecedented resources to support their deployment, the U.S. power system is well-positioned to ensure resource adequacy while increasing clean electricity and reducing greenhouse gas emissions.


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