Dive Brief:
- Declining reserve margins are challenging the reliability of the North American power grid, according to long-term resource planning analysis released this week.
- A report by the North American Electric Reliability Corp. also points to pending emissions rules and a changing resource mix as challenges transmission developers must deal with in the next decade.
- Existing regulations and lower gas prices contributed to the retirement of approximately 39 GW of generation from coal and other fossil fuels between 2011 and 2013, NERC said, and depending on how proposed environmental rules are implemented additional coal-fired retirements could reach 68 GW by 2025.
Dive Insight:
Natural gas has grown to 40% of the on-peak generation mix, up from 28% in 2009, and according to NERC the industry should continue to assess generation and transmission adequacy plans to respond to existing environmental regulations. The sector should also conduct a more comprehensive assessment of reliability impacts resulting from implementation of the EPA's Clean Power Plan before the rule is finalized, NERC said.
“A growing reliance on natural gas and renewables presents new reliability challenges that can be partially addressed with a technology-neutral focus on essential reliability services,” said Elliott Nethercutt, senior technical analyst of Reliability Assessment. “Amidst these ongoing changes, NERC must also develop new methods and approaches for assessing reliability.”
The grid is also facing declining reserve margins as older and less efficient generation is retired and load continues to grow.
“At a time of declining reserve margins, the electricity industry is undergoing a fundamental transformation of its resource mix driven by new environmental rules, renewables mandates and fuel economics,” said Thomas Burgess, vice president of Reliability Assessment and Performance Analysis. “A closer look at the key factors in this transformation are pointing to the need to ensure that new resources provide essential reliability services typically provided by conventional baseload generation.”