Rapid changes in the generation mix across North America, such as fossil-fired generation retirements and increases in gas and renewable generation, will challenge the industry to develop “a more robust transmission grid that is not only resilient to resource shifts, but also other more extreme conditions,” according to NERC’s long-term reliability assessment.
In the report released Nov. 29, NERC said the industry will face a number of significant, emerging reliability issues over the next 10 years, adding that the interdependencies between many of the issues will present unique challenges to the electricity industry.
The 337-page report identified eight key reliability findings.
Those include significant retirements of fossil-fired generation over the next five years, long-term generation outages for environmental retrofits, and increased dependence on natural gas for electricity generation.
“Due largely to the unique confluence of final and potential environmental regulations, low natural gas prices, and other economic factors, about 71 GW of fossil-fired generation is projected to retire by 2022, with over 90% retiring by 2017,” NERC said in the report.
In addition, a “significant generation retrofit effort” is expected over the next 10 years, with more than 300 unit-level retrofits on fossil-fired generation totaling approximately 160 GW.
Contemporaneously, approximately 50% of the new capacity will rely on natural gas for generation.
Other key findings related to renewable resources, including the transmission growth needed to accommodate those new and often distant resources, coupled with planning and operational challenges stemming from the introduction of renewable resources.
As recently as five years ago, transmission was being constructed at a rate of approximately 1,000 circuit miles per year. “With the current plans in place, that rate is expected to increase to 3,600 miles per year over the next five years, NERC-wide,” the report noted, with almost a quarter of that specifically linked to the integration of renewable generation.
The share of capacity attributable to renewable resources will continue to grow across North America, NERC said. Renewable generation is expected to grow from its current 15.6% of on-peak capacity to 17% in 2022. More than 20 GW of on-peak capacity will contribute to that growth, NERC said.
The report noted that resources should be sufficient to meet reliability targets in most areas. ERCOT, however, could prove to be an exception, with the grid operator’s planning reserve margin expected to dip as low as 13.4% as early as next year. That level is below both the ERCOT and NERC minimums of 13.75%.
The report also said increases in demand-side management (DSM) would help offset future resource needs.
“NERC-wide, DSM is projected to total roughly 80,000 MW by 2022 (or about 7% of the on-peak resource portfolio), offsetting approximately six years of peak demand growth,” NERC said, noting that all areas are projecting at least some increased availability of DSM over the next 10 years to reduce peak demands.
Those developments do not come without challenges, NERC noted in the report.
“The confluence of these risks are critically interdependent and must be strategically managed, monitored, and mitigated in order to preserve the reliability” of the bulk power system, NERC said.
While NERC called growth in flexible resources and increased transmission plans to integrate renewable resources distant from load centers encouraging trends, the organization noted that “fundamental changes to planning and operating strategies must consider evolving risks such as increased dependency on natural gas, [and] uncertainties of variable and renewable generation.”