As surging heat drives record power demand across the U.S., the North American Electric Reliability Corporation (NERC) released a report last Wednesday highlighting the “unprecedented” challenges facing America’s electric power system and illuminating what is needed to keep the lights on as the energy transition advances.
America’s competitive power suppliers provide about 150,000 MW of generation resources needed to serve the nation with reliable electricity. They are committed to providing safe, reliable power at competitive prices where and when it is needed most. But as policymakers consider ways to reduce power system emissions and other energy issues, the challenges detailed by NERC in its 2022 State of Reliability report serve as a red alert emphasizing the need for a realistic and careful approach to be taken when considering the future of the electric grid. A bumper sticker slogan approach does not support a truly reliable system. Rather, a successful approach requires more care and specificity as the industry balances the transition to renewable energy with the need to have a secure, reliable grid that will not fail customers – even in extreme weather conditions. The NERC report underscores the immediate attention needed to address reliability and demonstrates that the pathway to reducing emissions while ensuring that the Bulk Power System (BPS) can meet future demand and emerging risks is not an either/or proposition it is a both/and solution.
“As we transition our system so rapidly, it is vitally important that we are building and operating a system that can be resilient to the extreme weather we might see in the future,” said NERC Director of Reliability Assessment and Performance Analysis John Moura in a press release.
EPSA President and CEO Todd Snitchler concurred with Moura’s call for a sense of urgency, stating: “The situation is serious. It requires real focus and a reality check on what’s achievable now while ensuring reliability and charting a sound, reality-based path forward.”
Snitchler expressed thanks to NERC President and CEO Jim Robb for his leadership and “laser focus” on this important issue. At this year’s National Association of Regulated Utility Commissioners Summer Policy Summit, Robb noted there is an existing gap that energy storage cannot fill right now and will not be able to for some time – and said that gas is paramount to filling this gap for the time being. Abandoning flexible capacity now, largely provided by fossil fuels, before reliability is secured, will have disastrous results.
Indeed, when offering concrete methods to responsibly advance the energy transition, NERC’s report emphasizes that flexible resources, including natural gas generation, will remain necessary to meet demand over the medium- to longer term, particularly as sectors of the economy increasingly electrify in order to reduce emissions. “Ensuring sufficient flexible resources, maintaining fuel assurance, and planning and operating the BPS with [inverter-based resources] are all key reliability elements to managing the changing resource mix,” the report notes. “Until storage technology is fully developed and deployed at scale, natural-gas-fired generation will remain a necessary balancing resource to provide increasing flexibility needs. Resource planning and policy decisions must ensure that sufficient balancing resources are developed and maintained for reliability.”
The report also lists reliability challenges posed by ongoing and increasingly sophisticated cybersecurity threats, as well as gas-electric coordination issues. EPSA and our members take cybersecurity threats very seriously and have been working alongside our industry peers for decades to proactively address and combat known and emerging risks. This includes collaborating with government agencies and all sectors of the electric supply chain through membership and participation in information sharing and training groups and exercises. Regarding gas-electric coordination, EPSA continues to work with other sectors to address the complex issues involved in ensuring that natural gas supply is available to power generators when needed.
While the NERC report highlights a myriad of complex challenges to reliability, key points stand out: reliability must stay top of mind, and fossil resources remain necessary to meet the power generation demands necessary not just to our lifestyles but to public health and safety. Although the nation, and the world at large, continues in the transition from traditional emitting resources to renewable energy sources, the need for natural gas-powered generation remains. A policy and market foundation that allows power generators to provide this essential service is vital to keeping the lights on and delivering reliable power while simultaneously working to advance the energy transition.