Potential electricity reliability concerns for central USA

Potential electricity reliability concerns for central USA

Forecasts of high electricity demand and potential supply cuts raise concerns about tight reserve margins at the Mid-Continent Autonomous System Operator (MISO) balancing authority this summer. Working alongside regional utility service providers, budget authorities are responsible for ensuring that wholesale electric power markets provide sufficient electricity generation capacity to meet consumer demand, in real time and over several years.

To ensure reliability, the authorities plan to balance more supply than demand. The difference between supply and demand is called a reserve margin – a measure that is closely tracked by balancing powers and reliability planners. MISO, as the balancing authority covering 15 central US states, conducts seasonal assessments of market participants and stakeholders to help ensure the reliable operation of the member utility service area.

The North American Electrical Reliability Corporation (NERC) has compiled forecasts for summer supply and demand conditions in its scope 2022 Summer Reliability Assessment, including reserve margins for network areas. NERC is a not-for-profit regulatory body that supports electrical grid reliability through regional reliability entities that are in turn made up of individuals or groups of balanced power districts. NERC publishes seasonal reliability assessments for the United States and Canada each summer and winter.

MISO’s expected reserve margin this summer is 21.1%, which means that available resources are higher than expected demand, but a combination of higher than expected demand or lower than expected supply availability could reduce this margin, leading to reliability concerns.

To forecast electricity demand, MISO produces a set of forecasts, including a forecast of average annual demand and a forecast of extreme conditions that may only occur once every 10 years. Based on these assumptions, MISO expects hourly electricity demand to be 118.2 gigawatts (GW) in normal conditions and 125.2 gigawatts (GW) in extreme conditions. These values ​​assume that the available demand response measures to reduce electricity demand have already been published.

On the supply side, MISO expects to have 143.2 gigawatts of capacity available this summer. However, planned maintenance and forced outages can reduce the available capacity. In the past five years, MISO has had an average of 6.7 GW of maintenance outages and 14.4 GW of forced outages in the summer.

Seasonal fluctuations—which include factors such as drought, low wind conditions, or fuel supply constraints—have reduced MISO’s summer electricity supply by as much as 9.6 gigawatts in the past five years. To counter some of these outages and downtimes, MISO has identified 2.4 gigawatts of capacity it can connect to during emergency conditions, which was called operational mitigation in the NERC report. When accounting for these reductions and mitigations, the projected total MISO resource could be 114.9 gigawatts, or less than the projected supply of normal demand.

Concerns about long-term capacity shortfalls have prompted MISO to determine what measures it will take in response to changes in the generator fleet, severe weather events and other challenges. In addition, MISO maintains future capacity auctions to provide revenue for generators that are committed to being available in future periods. The latest auction showed the risk of insufficient capacity in most areas due to the continued retirement of generating capacity.

First published in “Today In Energy”. Main contributor: M. Tyson Brown

Featured Chart Data Source: North American Electric Reliability Corporation, 2022 Summer Depability Assessment


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