NERC sees adequate supply of electricity for next 10 years, except in ERCOT
For the majority of the bulk power system, planning reserve margins "appear sufficient to maintain reliability" over the next decade, the North American Electric Reliability Corp. said in its latest long-term assessment of the North American bulk power system. However, capacity resources in the Electric Reliability Council of Texas "have drifted to a level below reliability targets," NERC said.
And there are significant challenges facing the electric industry that add uncertainty to the long-term assessment, the reliability organization said. Among the variables leading to these uncertainties are electricity market changes, fuel prices (natural gas in particular), environmental regulations and renewable portfolio standards, NERC said.
Starting as early as next year, the ERCOT planning reserve margin is anticipated to be 13.4 percent, slightly below the ERCOT planning target of 13.75 percent, NERC said.
About 71 gigawatts of fossil‐fired generation is projected to retire by 2022, with more than 90 percent of that expected to retire by 2017, NERC said. Except in ERCOT, the retirement of this capacity "does not pose significant resource adequacy concerns," NERC said. "Reserve margins are likely to be reduced, but to levels that are still above targets." However, retirements over the next three to four years "may raise issues related to system stability and the need for transmission enhancements, which if not addressed could cause reliability concerns in some areas," NERC said.
Dependence on natural gas by the electric power sector "has increased significantly," NERC noted.
All areas are projecting at least some increased availability of demand‐side management over the next 10 years to reduce peak demands, "contributing either to the deferral of new generating capacity or improving operator flexibility in day‐ahead or real‐time time operations," NERC said. However, unlike traditional generating resources with many decades of historic data for analysis, "the long-term projections of DSM involve greater forecasting uncertainty—particularly with demand response resources," according to the long-term assessment report.
The transmission outlook looks good, NERC reported. As recently as five years ago, transmission was being built at a rate of about 1,000 circuit miles per year. In the last five years, more than 2,300 circuit miles were built per year, NERC said. That rate is expected to increase to 3,600 miles per year over the next five years. NERC‐wide, almost a quarter of new transmission is specifically linked to the integration of renewable generation.
"It is vital that these variable resources are integrated reliably and in a way that supports the continued performance of the bulk power system," NERC said.
"A significant generation retrofit effort" is expected over the next 10 years in order to comply with environmental regulations, NERC said. A majority of environmental controls are expected to be put in place to meet air regulations by April 2016, and NERC expects 339 unit‐level retrofits on fossil‐fired generation will be needed, totaling about 160 GW.
Growth in flexible resources, such as demand response and quick‐start natural gas power generators, and increased transmission plans to integrate renewable resources distant from load centers "are encouraging trends," NERC said. "However, fundamental changes to planning and operating strategies must consider evolving risks such as increased dependency on natural gas, uncertainties of variable and renewable generation, and new vectors of penetration for emerging cyber and physical security threats."
Winter outlook for 2012/13 sees adequate supply; peak demand expected to decrease
At the same time NERC released its long-term assessment, it released its reliability report for this winter, which says that all of the NERC regions are projecting sufficient resources to meet winter peak demands.
Anticipated resources have increased by 14.9 GW since the 2011/2012 winter season, NERC said. However, peak demand this winter is forecast to decline by 5.9 GW, compared to last winter, because of the sluggish economy, the report said.
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