Learnings from the NERC 2024 LTRA

Image courtesy of janprocházka under Attribution-NonCommercial-NoDerivs 2.0 Generic Deed, resized to 700 x 391 pixels.

In December 2024, the North American Electric Reliability Corporation (NERC) issued its 2024 Long-Term Reliability Assessment (LTRA).  The 10-year outlook paints a bleak picture of the future of electric reliability.

The report calculates that over 50% of the continent will suffer a shortage of electricity in the near future due to demand growth, coal plant retirements, delays approving new projects, and an increase in climate extremes.  What follows is a more detailed breakdown of these issues.

The Key Challenges Highlighted in NERC’s 2024 LTRA

• 50% of North America could suffer power shortages. Although the level of risk is region-specific, the overall picture looks bleak.  MISO is the only region flagged as “high risk,” but 10 other regions are considered as “elevated risk,” including some large U.S. regions like PJM, Electric Reliability Council of Texas (ERCOT), and Southwest Power Pool (SPP).
• Power plant retirements are happening faster than the development of new sources to replace them. The report estimates that about 10% of the 1,189 GW of total installed capacity in the U.S. will be retired over the next decade.  At the same time, resource capacity has grown slower than what was forecasted in the 2023 LTRA.  Thus, resource growth is not keeping up resource retirements.
• Demand growth is going through the roof. The main drivers include: (1) the electrification of vehicles, heating, and many other things; (2) the growth in power-hungry data centers, crypto-mining and AI activities; and (3) industrial development.  For these and other reasons, demand is expected to grow faster than it has in decades.
• The increased reliance on natural gas-fired generation has accentuated the entanglement of electric and gas infrastructure. The downside of this is that there are reliability challenges with the U.S. natural gas infrastructure, as outlined in the report.
• Challenges remain when it comes to new transmission development projects. The primary driver of this is permitting and siting delays, which are currently holding back over 1,200 miles of transmission development projects.

NERC’s 2024 LTRA goes into some detail on priority actions to try and address these risks, and you can delve into them via the link above if you choose.  However, in my opinion, no matter what actions are taken, there are currently no viable solutions that would move the needle.