While less dire in some ways than 2022's outlook, the North American Electric Reliability Corp.'s summer outlook for 2023 underscored persistent challenges for the US grid as it adds more intermittent resources and grapples with extreme heat, a panel of grid experts said June 13.
Better planning and coordination among US states and regions and more transmission will be key to addressing those challenges, they said during a webinar hosted by the American Council on Renewable Energy.
In May, the North American Electric Reliability Corp. (NERC) said almost two-thirds of North America is at risk of electricity supply shortfalls this summer during periods of extreme demand. NERC attributed the outlook to forecasts for intense heat, the loss of conventional generation resources, and increased demand due to electrification, among other factors.
Unlike in 2022, no part of North America is at high risk of insufficient operating reserves during normal peak conditions. But more parts of the US and Canada could have insufficient operating reserves with above-normal conditions. These risks are not new to the US power industry but require states and regional grid operators to find solutions, experts say.
"I don't think there's anything specific or alarming out of the NERC report, but it highlights the continuing risk that the regions face," Kansas Corporation Commission member Andrew French said.
Although the Southwest Power Pool has at times served more than 90% of its load with renewable resources, "unfortunately it's not always that way," and the loss of conventional resources is straining spare capacity, French said. Kansas utilities are in the Southwest Power Pool.
"The big issue is, we're seeing shrinking capacity reserve margins as traditional thermal resources close, and they're not necessarily being replaced in a one-to-one fashion," according to French.
The Electric Reliability Council of Texas Inc.'s reserve margins are growing and will be about 23% for this summer, above a target of 13.75%, said Warren Lasher, former senior director of system planning at ERCOT. But rising power demand in Texas and extreme weather could pose threats.
"The NERC assessment is still saying that there's a risk of outages or at least scarcity, especially in the highest risk hour ending 8 p.m. ... when the sun is going down and you're losing that solar generation and relying more heavily on wind generation," Lasher said.
The California ISO's outlook has brightened from 2022 thanks to improved hydropower conditions and new energy resources, including another 3,000 MW of battery storage, said Danielle Mills, CAISO's principal of infrastructure policy development.
Even then, "we do still see some risk associated with those periods after 8 p.m. when the solar generation is declining ... if we have high loads and a lack of availability of imports," Mills said.
Transmission among key solutions
Panelists offered a number of options for improving reliability.
In the near term, French said regulators and grid operators must identify the reliability attributes of the generation fleet and potentially retain "some units that provide reliability benefits like ramp." Longer term, markets must value the reliability benefits of demand response and interregional transmission, the Kansas utility commissioner added.
Expanded transmission capacity and a more interlinked grid will also be key in the West, where states are working to meet aggressive clean energy standards.
"As I look forward to how we are needing to address these risks with warmer temperatures and more potential risks of lower hydro [capacity], I think it's all about the size of our grid," said Nicole Hughes, executive director of advocacy group Renewable Northwest.
As western states add more clean energy, "we're just really having a hard time bringing that to load because of lack of transmission," Hughes said.
Mills said CAISO is moving toward the implementation of an extended day-ahead power market and weighing opportunities to improve transmission planning across the West, including for interregional projects. The California grid operator is looking at a new subscriber participating transmission owner model to enable long-distance power lines to enter CAISO's control area. The region is also evaluating offshore wind and long-duration storage to diversify its energy resources.
But to truly strengthen the grid, states and regions must come together. "The more we can coordinate on things like resource adequacy and transmission and interregional transmission and resource planning ... the more resilient our grid will be," Mills said.
The Southeast could also benefit from improved coordination among states and grid operators, said Simon Mahan, executive director of the Southern Renewable Energy Association. The region's Southeast Energy Exchange Market facilitates bilateral power trading but does not do regional or interregional transmission planning.
As new demand emerges from electric vehicles, hydrogen production and datacenters, "having not only a diversification of generation resources, having a diversification of what the load shape looks like and the ability to manage and work with that load is going to be exceptionally important," Mahan said. "The best way to be able to do that is with transmission."
Mahan referenced a Brattle Group study that found South Carolina could save about $300 million annually through operational efficiencies and capacity savings if the state joined the PJM Interconnection LLC. The state could also save hundreds of millions of dollars if the Southeast formed its own regional transmission organization, the study estimated.
Lasher agreed that interregional transmission could provide reliability benefits but said such investments involve "a long lead time so we better get started."
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