The Western Electricity Coordinating Council recently released its 2024 Western Assessment of Resource Adequacy. The annual report evaluates resource adequacy risk over the next 10 years, with this year’s report revealing a sharp rise in large loads, creating the need for unprecedented resource additions.
WECC said current resource plans forecast staggering demand growth over the next decade.
For the Western Interconnection, annual demand is forecast to grow 20.4%, from 942 TWh in 2025, to 1,134 TWh in 2034. That growth rate is more than double the 9.6% growth forecast in resource plans filed in 2022, and over four times the historical growth rate of 4.5% between 2013 and 2022.
A major driver for the increase in demand over the next 10 years is the expansion of large loads like data centers, manufacturing facilities, and cryptocurrency mining operations, the report said.
“These loads consume immense amounts of energy, can be constructed quickly, have different consumption patterns, and require changes or additions to infrastructure. In some cases, large loads require a steady supply of power at all times, while in other cases, their demand can fluctuate, creating a need for large ramping capability,” WECC said.
“There can be challenges with the way large loads behave during grid disturbances, including their ride-through capability. According to current plans, the effects of large-load growth are greatest in the next three to five years; however, more large loads will likely be added to future forecasts.”
To meet growing demand, entities plan to build unprecedented amounts of new resources over the next decade, the report said.
“Never has generation been built in the West at the rate called for in current resource plans. These plans could be unattainable given past struggles to build planned resources on time,” WECC said.
Current resource plans include 172 GW of new generation resources to be built in the next decade. This is more than double the generation capacity added in the last 10 years and will require an exceptional effort to carry out, the report said. Between 2014 and 2023, entities added 74 GW of new generation. Demand growth and resource retirements are driving up the number of new resources needed in the next 10 years.
If demand grows as expected and industry experiences delays and cancellations in building new resources over the next decade, “the West will face potentially severe resource adequacy challenges,” the report said.
Over the last six years, only 76% of planned resource additions came online in the year scheduled, and in 2023, that number was 53%. “Resource margins are shrinking, leaving less buffer for cancelled and delayed projects. If the resource build-out over the next 10 years mimics the last five years, by 2034, the West will have hundreds of hours each year when demand is at risk.”
WECC said variability will continue to increase, exacerbating the risk of having inadequate dispatchable energy.
Over 85% of the 172 GW of planned resource additions in the next decade are variable resources (wind and solar), battery storage, or a hybrid.
“The addition of so many energy-limited resources, along with decreases in baseload resources and changes in load patterns, is creating more variability in the system. This increases uncertainty as to when and how much energy is needed and available. As uncertainty increases, risk increases,” WECC said.
“Entity resource plans seem overly optimistic. While planning entities provide specific information about the resources they plan to add in the next one to five years, in many cases, they provide generic, non-specific "placeholder" resources in long-term planning five to ten years out,” the report asserted. “Traditional resource planning and review practices do not have a mechanism to ensure that resources will actually be built.”
