More than 330 gigawatts of solar and wind capacity are planned for installation through 2029, and 8 GW of utility-scale electricity storage are expected by 2024, the North American Electric Reliability Corp. (NERC) said in its 2019 long-term reliability assessment.
The 2019 report, released Dec. 19, found there is sufficient generation supply to meet expected load, except in two areas where generation is projected to fall below NERC’s reference margin level, Texas and Ontario.
Having adequate resources is not a binary or “black and white” assessment, John Moura, director of reliability assessment and performance analysis at NERC, said during a web presentation on the report, but two areas did fall into the “marginal bucket.”
NERC’s analysis shows the Electric Reliability Council of Texas (ERCOT) area with a 4,859 MW gap between an anticipated 2024 reserve margin of 7.8% and a 2024 reference margin level of 13.75%.
In part, tight reserve margins in ERCOT are the outcome of managing resource adequacy through an energy-only market construct that allows for scarcity pricing to provide an incentive to build new generation, the report said.
ERCOT also has a large pipeline of planned generation projects and with those prospective projects, there should be sufficient resources to handle expected peak loads. “We are confidant they can manage that,” Moura said, noting that the region had a projected deficit this past summer and came through without a load shedding event.
The other marginal area is Ontario, which is expected to see a shortfall beginning in 2023 as a result of nuclear power retirements and refurbishments.
NERC expects to see Ontario secure incremental capacity to address the shortfall in future capacity auctions.
Ontario is “evolving” its capacity market from a demand response auction to a more advanced capacity market that would allow additional resources, such as off-contract generation, imports and storage, to participate, the report noted. That evolution would allow the province to sign more contracts for generation capacity. The Canadian province is working “to buttress those contracts for 2022,” Moura said, adding that he is confident the province’s reserve margin could rebound by 2022.
Another key finding of the report is how the bulk power system will handle a rapidly changing resource mix. From an installed capacity perspective, NERC sees wind and solar resources having the largest impact to the North American generation fleet.
NERC said that over 330 GW of installed capacity from solar and wind are planned through 2029. To accommodate large amounts of solar and wind generation, additional flexible resources are needed to offset ramping and variability, NERC said.
In contrast, coal and nuclear power are projected to decrease from 20% and 9% to 16% and 7%, respectively.
NERC also expects a large influx of natural gas-fired on-peak generation to be coming online, with as much as 88,000 MW in the development pipeline over the next 10 years.
Higher reliance on gas-fired generation, underscores the importance of having “fuel assurance mechanisms” in place, particularly in places with high levels of natural gas and limited pipeline infrastructure, and will require planning and coordination by policy makers and others to ensure reliability, the report said.
And while “we haven’t seen a large amount of energy storage coming online this year, it is on our radar,” Moura said. NERC, in fact, sees 8,000 MW of energy storage coming online in the next 10 years, equivalent to “four of our largest nuclear power plants” coming in “very quickly,” Moura said.
The report noted that battery storage systems require electricity for charging, which appears as demand on the system. “In large penetrations, the energy for charging may not be available, and the state of charge for these resources may not be sufficient to perform when called upon,” the report noted, adding that the influx of storage resources would necessitate a need to “to enhance visibility and probabilistic forecasting and modelling” in order to maintain system reliability.
The report noted that there are fewer and shorter transmission lines in the development pipeline. There are under 15,000 circuit miles of new transmission is expected over the next six years, “considerably less than the nearly 40,000 circuit miles planned earlier this decade,” according to the report.
“Transmission is the obvious link that is going to be needed” for the reliability of a system with a changing generation mix, but “we don’t see large transmission projects or long transmission projects,” Moura said.
The report recommended that NERC should “assess and evaluate if the decreasing amount of transmission projects presents any future reliability risks or concerns.”