Over half of North America is at risk of energy shortfalls in the next 10 years amid surging electricity demand and thermal plant retirements, according to a new report from the North American Electric Reliability Corp.
Less overall capacity will enter the bulk power system in the next 10 years than NERC previously projected, particularly from always-available resources. And that new capacity will fall short of future demand growth, the grid watchdog said in its latest annual Long-Term Reliability Assessment, released Dec. 17.
“The trends point to critical reliability challenges facing the industry: satisfying escalating energy growth, managing generator retirements, and accelerating resource and transmission development,” the nearly 150-page report said.
Swift load growth, including from electrification of the economy and data centers, is expected to surpass increases in dispatchable resources, NERC observed.
NERC expects summer peak demand for assessed areas to rise by 15% across the next 10 years, while winter peak demand is forecasted to jump by around 18%. Those trends, along with rising plant retirements, signal a need for substantial generation and transmission growth in the next 10 years.
But much of the new capacity entering interconnection queues is solar photovoltaic, battery and hybrid resources, which are “more variable and weather-dependent than the generators they are replacing,” NERC said.
“Our infrastructure is not being built fast enough to keep up with the rising demand,” said John Moura, NERC’s director of reliability assessment and performance analysis. “Policymakers, industry leaders and stakeholders across North America must work together to ensure the expansion of the bulk power system, ensure new resources can interconnect effectively and reliably, and also maintain reliability that our society depends on.”
NERC recommended that market operators and relevant authorities carefully manage generator deactivations and ensure sufficient reliability services. The report also called on policymakers to streamline siting and permitting of energy resources and transmission to support higher demand.
“NERC’s latest assessment continues painting a grim picture of our nation’s energy future and growing threats to reliable electricity,” NRECA CEO Jim Matheson said. “This report points directly to the need for a pro-energy policy agenda that prioritizes reliability and affordability for American families and businesses.”
In the next five years, the Midcontinent Independent System Operator (MISO) region is the most vulnerable under the new NERC assessment. The report placed MISO at high risk of energy shortfalls in 2025-2029, meaning it is likely to have inadequate electricity supplies at the peak of an average summer or winter season.
Many other parts of the U.S. are at elevated risk of shortfalls, meaning they would have adequate energy resources for normal peak conditions but likely experience shortfalls during extreme weather. Areas at elevated risk include the PJM Interconnection (Mid-Atlantic), New England, the Southwest Power Pool, Texas, California and part of the Southeast.
Those risks highlight the need to educate policymakers and regulators on the reliability implications of policy-driven energy transitions, NERC said.
In a letter this month to President-Elect Donald Trump, Matheson pledged to work with the incoming administration to advance policies that support energy production, manufacturing and infrastructure that are crucial to the well-being of rural communities.
“We urge President Trump and congressional leaders to prioritize reliability right out of the gate next year before it’s too late,” Matheson said.
Molly Christian is a staff writer for NRECA.