Most of U.S. faces possible blackouts if summer temps spike, says NERC

The problem has become all too familiar: Dispatchable thermal generation is being retired and replaced with unreliable wind and solar.

In their latest assessment of the nation’s electric grid, the North American Reliability Corporation (NERC), a not-for-profit regulatory authority whose mission is to assure the reliability and security of the power grid, announced their concerns about the readiness of the U.S. power grids. In their report “2023 Summer Reliability Assessment,” released May 17, 2023, NERC made some startling warnings:

Two-thirds of North America are at risk of energy shortfalls this summer during periods of extreme demand.

While there are no high-risk areas in this year’s assessment, the number of areas identified as being at elevated risk has increased.

Retirements of dispatchable generation are increasing the risks associated with extreme summer temperatures.

While the NERC attempted to soften its message somewhat, the report made it clear that the potential for blackouts is high in some areas of the country:

• If summer temperatures spike, seven power grids (the gold-colored areas in the map above) may face power shortages during higher demand levels.

• Low inventories of replacement distribution transformers could slow recovery times following hurricanes or severe storms. Supply chain constraints may also lead to maintenance issues this summer and delays for new resource additions.

NERC also noted additional risks:

• Areas in the U.S. West are at elevated risk due to wide-area heat events that can drive above-normal demand, strain resources and the transmission network.

• In the central U.S. (SPP and MISO), wind energy output will be vital to meeting average summer peak and extreme demand levels due to little excess firm capacity.

• The risk of drought and high temperatures in Texas’ ERCOT may result in emergency procedures, including the need for “operator-controlled load shedding,” meaning rolling blackouts, during periods of low wind and high generator outages.

• The mid-central south (SERC Central) region forecasts higher peak demand and less supply capacity, “creating challenges for operators to maintain reserves in extreme scenarios.”

• New England has lower available capacity than last year, resulting in a higher likelihood of system operators using emergency procedures to manage extreme demand conditions.

• In Ontario, extended nuclear refurbishment activities have reduced available capacity, limiting system reserves needed to manage peak demand.

One of the recurring themes in this report, and highlighted in my recent Substack article, is that retirements of thermal, dispatchable generators, meaning coal and natural gas, coupled with vast additions of non-dispatchable and unreliable wind and solar, are responsible for the increased unreliability of U.S. power grids.

If there was any doubt about the root cause of NERCs warnings, their Director of Reliability Assessment and Performance Analysis, John Moura, made it clear:

Over the past five years, NERC has seen a steady deterioration in the risk profile of the grid. The system is close to its edge ... managing the pace of retirements is critical (emphasis added).

The NERC report contains numerous specific warnings about grid reliability problems due to overreliance on wind and power:

In the Midcontinent ISO territory, “wind generator performance during periods of high demand is a key factor in determining whether there is sufficient electricity supply on the system to maintain reliability."

In the Southwest Power Pool, if wind output falls below normal, the grid operator “can face energy challenges in meeting extreme peak demand or managing periods of thermal or hydro generator outages.”

In Texas, “dispatchable generation may not be sufficient to meet reserves during an extreme heat wave that is accompanied by low winds.”

In the Western Interconnection, wide-area heat events can expose some assessment areas to a risk of energy supply shortfalls “as each area relies on regional transfers to meet demand at peak and the late afternoon to evening hours when energy output from the area’s vast solar PV resources are diminished.”

Similar statements were made at a press conference recently by Texas Public Utility Commission Chair Peter Lake about the Texas ERCOT grid:

For the first time, the peak demand for electricity this summer will exceed the amount that we can generate from on-demand, dispatchable power, so we will be relying on renewables to keep the lights on. On the hottest days of summer, there is no longer enough on-demand, dispatchable power generation to meet demand in the ERCOT system.

NERC also noted the problems that pending new rules could further complicate grid operations. For example, as I discussed in an article last week about the U.S. Environmental Protection Agency’s inaptly-named “Good Neighbor Plan,” finalized in March of this year, which requires states to reduce pollution impacts downwind. As a result, grid operators and balancing authorities “will need to be vigilant for emissions rule constraints that affect the dispatchability and potential need for emission allowance trades or waivers to meet high demand or low resource conditions,” NERC said.

A final warning from NERC emphasized that supply chain issues continue and are increasingly severe problems for the power industry. Along with a shortage of transformers, NERC said:

Difficulties in obtaining sufficient labor, material, and equipment as a result of broad economic factors has affected preseason maintenance of transmission and generation facilities in North America. Many utilities have relatively low inventories of transformers, said Mark Olson, NERC manager of reliability assessments. The industry is using asset-sharing programs to mitigate those impacts.

Robert Bryce provided an excellent analysis of this problem in his recent Substack article titled “Untransformed.”

Where do we go from here?

The electricity grid problems described in detail by NERC are highly troubling. Functioning economies require dependable power. Without it, economies and civil societies crumble quickly. All U.S. power grids should heed the warnings in the NERC report and respond accordingly.

Texas’ ERCOT is slightly ahead of other grid operators, as the Texas legislature is currently in session and wrestling with the issue of the lack of dispatchable thermal generation, caused mainly by the premature closing of coal plants, leaving the Texas grid with an overdependence on wind and solar generation. The Texas legislature flirted with reinstating a form of capacity markets in which dispatchable generators are paid to have emergency generation available, but that was scrapped for more market-oriented approaches. The outcome of those debates will be known in a few weeks as this legislative session ends on May 29. You will read about it here.