A large portion of the North American bulk power system (BPS) is at risk of insufficient electricity supplies this winter, according to the North American Electric Reliability Corp. (NERC).
Higher peak-demand projections, inadequate generator weatherization, fuel supply risks, and natural gas infrastructure are contributing to risks in several regions of the country, according to NERC’s 2022-2023 Winter Reliability Assessment.
NERC winter assessments are often cautionary in nature. Last November, NERC warned that certain regions of the country that are vulnerable to extreme weather, natural gas supply disruptions and low hydro conditions were at risk for electricity supply disruptions.
Asked whether this year’s assessment was more urgent than those of past years, John Moura, NERC’s director of reliability assessment, said, “there are a lot of factors that are pushing the system toward tighter conditions.”
There has been “a progression of risks over past several years” that are “a bit unprecedented,” Moura said during a Webex presentation on this year’s winter assessment. The “system hasn’t been this stressed before and, more importantly,” the risks haven’t been as widespread with as much indication of unsuccessful outcomes. He noted the unfulfilled need for new generation resources and natural gas pipelines and a lack of dual fuel systems as factors pushing the bulk power system into risky territory.
The report also said that the electricity industry is facing a shortage of distribution transformers as a result of production not keeping pace with demand. NERC warned that the inadequate supply of transformers “could slow restoration efforts following winter storms.”
The report noted that a survey by the American Public Power Association “revealed that many utilities have low levels of emergency stocks that are used for responding to natural disasters and catastrophic events.”
Severe winter storms often include high winds, icing, and precipitation that damage distribution power lines and transformers, NERC said.
“Asset sharing programs used by utilities provide visibility and voluntary equipment sharing to maximize resources; however, electricity customers may experience delayed restoration of power following storms as crews must work to obtain new equipment,” NERC said.
The regions NERC identified as most at risk this winter are the Electric Reliability Council of Texas (ERCOT), the Midcontinent Independent System Operator (MISO), Southeastern Electric Reliability Council (SERC)-East, Western Electricity Coordinating Council-Alberta, and Northeast Power Coordinating Council (NPCC)-Maritimes, and NPCC-New England.
“Peak demand increased by over 7 percent in ERCOT since last winter, causing lower reserve margins,” Mark Olson manager of reliability assessment for NERC, said during the Webex.
In February 2021, Winter Storm Uri brought rotating outages to Texas, making clear the risks that prolonged extreme cold weather can bring to the region. Those risks remain, exacerbated by the fact that Texas has few interconnections so it would be forced to rely on its own resources in an emergency, according to the NERC report.
Under extreme weather conditions, NERC projects ERCOT’s reserve margin could drop to a negative 21.4 percent.
“The risk of a significant number of generator-forced outages in extreme and prolonged cold temperatures continues to threaten reliability where generators and fuel supply infrastructure are not designed or retrofitted for such conditions,” NERC said.
In MISO, reserve margins have fallen by over 5 percent since the winter of 2021-2022, NERC said, noting that nuclear and coal-fired generation retirements total over 4,200 MW since last winter. Under extreme winter conditions, MISO’s reserve margin could fall to a negative 7.6 percent, NERC projected.
An extreme cold weather event that extends deep into MISO’s area could lead to high generator outages from inadequate weatherization in southern units and unavailability of fuel for natural-gas-fired generators, NERC warned.
Like Texas and the southern parts of MISO, SERC-East is also at risk as extreme cold could result in high generator outages and demand volatility. “A rare cold weather event in the South could result in an energy emergency in this area,” NERC said.
Peak electic demand is expected to grow in Alberta and the Maritimes, which both have winter peaking systems. Normal winter peak conditions could strain capacity in the Maritimes, NERC said.
In Alberta there has been “a 14 percent increase in demand and not a lot of change in resources,” Olson said, adding that winter usually sees a tightening of natural gas supplies in the region and that could affect generators. NERC projects that the province has sufficient capacity for normal winter peak demand, but extreme conditions that cause high generator forced outages are likely to cause energy emergencies.
“New England is also a risk area,” Olson said. “That has been true for some time. Natural gas serves both local generators and home heating needs and in severe cold snaps that natural gas infrastructure is constrained and generators could be on the short end of that.”
Although fuel supply is not under its purview, NERC monitors supplies because of their effect on generation. Currently average utility coal stockpiles are near pre-winter levels seen in the past several years. “That is really good,” said Olson, but there is continuing concern and uncertainty about coal transportation.
Natural gas inventories have also rebounded “significantly from the summer, so we don’t have a current concern for natural gas storage, however, severe cold weather can always affect the delivery and production of natural gas,” Olson said.
There are some indications that utilities and generators are delaying restocking fuel supplies because of economic concerns around inflation. “We encourage generators to fill up those tanks,” Olson said.
Olson also recommended that state regulators and policy makers in risk area that have generation resources on track for retirement “should encourage them to stay around for the winter months.”
Generators should maintain communications about the status of fuel availability, he said.
“This is a serious warning,” Olson said. “I don’t think we are out of the woods on fuel compared to previous years. Last winter we had more concern about winter hydro conditions in the West. So, it landed as a potential concern. This year we don’t see the same thing. The outlook is worse than last year.”
“These challenges don’t appear out of nowhere,” Moura said. Decarbonization policies are moving forward in many states while the retirement of thermal resources continues, but “we have failed to build the transmission to get to those decarbonization goals and weather is impacting the system more frequently in part because our resources are more weather dependent.”
