The North American Electric Reliability Corporation (NERC) has warned about the urgent need for new energy resources over the next decade. According to NERC’s 2024 Long-Term Reliability Assessment [1] (LTRA), more than half of North America is at elevated or high risk of energy shortfalls in the next five to ten years.
The report highlights several critical challenges facing the power industry, including rising electricity demand, generator retirements, and barriers to resource and transmission development. NERC’s assessment points out that electricity demand is growing at a faster rate than at any time in the last two decades, driven by new data centers, electrification in various sectors, and large commercial and industrial loads.
“Demand growth is now higher than at any point in the last two decades, and meeting future energy needs in all seasons presents unique challenges in forecasting and planning,” said Mark Olson, NERC’s manager of reliability assessments.
NERC’s LTRA also notes that announced generator retirements over the next ten years total 115 gigawatts (GW), which are largely being replaced by variable generation sources. However, to ensure reliability, there must be adequate amounts of dispatchable generators with assured fuel supplies, such as natural gas.
The summer peak demand forecast is expected to rise by more than 122 GW over the next decade, a 15.7% increase from current levels. Similarly, the winter peak demand forecast is projected to rise by nearly 14%. NERC emphasizes the need for significant investment and enhancements in regional planning processes to support grid expansion and transmission projects.
John Moura, NERC’s director of reliability assessments and planning analysis, stressed the importance of overcoming challenges related to siting, permitting, and construction to ensure the growth of transmission infrastructure. NERC’s Interregional Transfer Capability Study (ITCS) found that an additional 35 GW of transfer capability across the U.S. would strengthen energy adequacy under extreme conditions.
NERC’s assessment recommends that energy policymakers, regulators, and industry leaders take action to address growing energy demands and transition to new resources. They should “carefully scrutinize and manage” the pace of generator requirements, considering the predicted reliability risks, and enhance the long-term assessment process by incorporating wide-area energy analysis with modeled interregional transfer capability, as highlighted in the ITCS.
Sources:
[1] 2024 Long-Term Reliability Assessment https://www.nerc.com/pa/RAPA/ra/Reliability%20Assessments%20DL/NERC_Long%20Term%20Reliability%20Assessment_2024.pdf
