The North American Electric Reliability Corporation (NERC) has released its 2024 Long-Term Reliability Assessment (LTRA), identifying significant reliability challenges facing the electricity sector over the next decade. The report highlights the rapid growth in electricity demand, ongoing generator retirements, and the need to address barriers to resource and transmission development to ensure reliable energy supply.
The LTRA projects that more than half of North America faces elevated or high risks of energy shortfalls over the next 5 to 10 years. Key drivers include increasing electricity demand from new data centers, manufacturing facilities, hydrogen fuel plants, and other large commercial and industrial loads, along with broader electrification efforts across sectors. Summer peak demand is forecasted to rise by over 122 gigawatts (15.7%) by 2034, while winter peak demand is expected to increase nearly 14%.
"Demand growth is now at its highest level in two decades, creating unique challenges for forecasting and planning," said Mark Olson, NERC’s Manager of Reliability Assessments. "The retirement of 115 gigawatts of generation over the next decade, much of it being replaced by variable resources, underscores the need for adequate dispatchable generators with reliable fuel supplies to maintain reliability."
The report notes positive developments in regional planning processes, with a significant increase in planned and under-construction transmission projects. However, John Moura, NERC’s Director of Reliability Assessments and Planning Analysis, emphasized the importance of overcoming persistent challenges. "Siting, permitting, and construction barriers must be addressed to turn these plans into reality. These steps are essential to achieving a more reliable and resilient grid," Moura said.
NERC’s Interregional Transfer Capability Study (ITCS), included in the assessment, found that adding 35 gigawatts of transfer capability across the U.S. could bolster energy adequacy under extreme conditions and mitigate energy shortfalls. Enhanced transfer capabilities between neighboring systems could help address the resource adequacy challenges identified in the LTRA.
The assessment also highlights areas at risk of electricity shortfalls. While most regions are projected to have sufficient resources under normal conditions, several areas, including the Midcontinent Independent System Operator (MISO) region, face risks even under normal scenarios due to resource additions lagging behind generator retirements and rising demand.
To address these challenges, NERC recommends the following actions:
- Careful management of generator retirements to minimize reliability risks.
- Enhancing long-term planning with wide-area energy analysis and modeled interregional transfer capabilities.
- Addressing siting and permitting barriers to accelerate resource and transmission development with support from policymakers and regulators.
- Collaboration across the electricity and natural gas industries to address interconnected energy system needs.
- Maintaining essential reliability services through regional transmission organizations, independent system operators, and regulators.
