by Sean Thompson, Supervisor NERC Services
The 2024 Long-Term Reliability Assessment (LTRA) by the North American Electric Reliability Corporation (NERC) underscores critical reliability challenges facing the power industry over the next decade. These findings hold significant implications for generator owners as the energy landscape evolves.
Key trends include rising electricity demand driven by rapid electrification and industrial growth, contrasted with substantial planned generator retirements. Over half the continent is projected to face elevated or high risk of energy shortfalls in the next 5 to 10 years. For generator owners, these developments present both challenges and opportunities to ensure BES reliability while navigating a transforming energy market.
Demand growth has surged to levels not seen in two decades, fueled by large-scale commercial and industrial developments like data centers, manufacturing facilities, and hydrogen plants. Summer peak demand is expected to increase by more than 15% over the next decade, with winter peaks rising by nearly 14%. Meanwhile, the retirement of 115 GW of generation capacity—primarily dispatchable sources—is reshaping the resource mix. Although renewable energy sources will play a larger role, NERC emphasizes the necessity of maintaining adequate dispatchable generation, such as natural gas, to ensure reliability during peak periods and extreme conditions.
For generator owners, this underscores the need to invest in flexible and resilient infrastructure. Maintaining guaranteed fuel supplies and enhancing capacity to meet both normal and extreme conditions will be crucial. Additionally, regional planning processes are seeing increased investment, with transmission projects either under construction or planned. However, barriers such as siting and permitting remain significant challenges to realizing these projects.
NERC’s Interregional Transfer Capability Study highlights the importance of improving transfer capacity between neighboring systems. Increasing transfer capability by 35 GW could help alleviate potential energy shortfalls, particularly during extreme weather events. Generator owners stand to benefit from participating in and advocating for these enhancements, which could stabilize the market and improve resource adequacy.
To address these challenges, NERC’s recommendations the following. Generator owners must work collaboratively with regulators, policymakers, and regional organizations to:
- Scrutinize and manage the pace of generator retirements.
- Support permitting and siting processes for new resources and transmission.
- Maintain essential reliability services during this transitional period.
The 2024 LTRA provides a comprehensive roadmap for industry stakeholders, including generator owners, to navigate the complex dynamics of energy demand and supply over the next decade. By proactively addressing these challenges, generator owners can play a pivotal role in ensuring a reliable and resilient grid.