The U.S. grid reliability outlook is “worsening” amid projections for more power plant retirements and surging demand from data centers and other large loads in the next decade, the North American Electric Reliability Corp. said on Thursday.
NERC’s latest Long-Term Reliability Assessment reinforces the need for smart energy policies that support reliable, affordable generation for electric cooperatives, NRECA CEO Jim Matheson said.
“Today’s report is yet another stark warning about the intensifying reliability risks facing America’s electric grid,” Matheson said. “This report clearly highlights the need for smart, swift actions and serious conversations about how we will meet tomorrow’s energy needs as a country.”
Over half the areas that NERC analyzed in its latest long-term assessment are expected to face resource adequacy challenges in the coming decade.
In the next five years, areas at high risk of energy supply shortfalls include Texas and parts of the Midwest, Mid-Atlantic and Northwest. Regions at elevated risk of shortfalls—meaning demand could exceed supply during extreme conditions such as above-normal temperatures or fuel supply disruptions—include New England, New York and parts of the Southeast and Southwest Power Pool.
The loss of always-available generation is one key risk. Although expected plant retirements have shrunk from last year’s long-term assessment, NERC said closures could total over 105 gigawatts of peak seasonal capacity in the next 10 years—enough energy to power up to 100 million homes.
At the same time, aggregated peak demand is expected to soar by more than 224 GW for summer and 245 GW for winter over the 10-year period, up by 69% and 65% from last year’s 10-year growth projections, respectively.
Power demand from data centers and other large industrial and commercial loads is driving much of that increase, particularly in Texas, the PJM Interconnection and the West.
Grid operations are also becoming more complex due to rising deployment of inverter-based, weather-dependent resources such as battery storage and solar energy, NERC said.
“The overall resource adequacy outlook for the North American [bulk power system] is worsening,” the new report said. “Projections for resource and transmission growth lag what is needed to support new data centers and other large loads that drive escalating demand forecasts.”
NERC called on industry, regulators and policymakers to speed the addition of new energy resources, manage the reliability risks of large load growth, improve coordination between electric and natural gas systems, and streamline siting and permitting of energy and transmission resources, among other recommendations.
NRECA has advocated for such policy reforms. The association has backed legislation in Congress to ease the federal permitting process for energy projects and urged key agencies to remove regulatory threats to power generation and help electric cooperatives serve data centers and other large load growth.
“Reliable and affordable electricity is the cornerstone of America’s national security and our economy,” Matheson said. “As electricity demand skyrockets, we urge policymakers to continue working with electric cooperatives to prioritize grid reliability and pursue smart energy policies that help set our nation on a more stable path.”
Molly Christian is a staff writer for NRECA.