NERC Report Points to Challenging Conditions Across U.S. This Winter

By: Concentric Staff Writer

Published: November 28, 2023

This winter could be a difficult season for the bulk electric system across large portions of the United States, according to national reliability officials.

Memories and lessons from extreme weather events such as winter storms Uri and Elliott—in 2021 and 2022 respectively—linger for industry and regulators due to electric grid failures and all that followed. And there is much evidence that the U.S. grid is not adequately equipped for the upcoming frigid conditions of winter.

A new report from the North American Electric Reliability Corporation (NERC) says that a large swath of the grid across the country is at risk of short electricity supplies this winter, particularly power plants fueled by natural gas. Natural gas freeze-ups have plagued systems from the Northeast to Texas in recent years, as was the case during polar vortexes and other events such as Winter Storm Uri in February 2021.

NERC’s Winter Reliability Assessment noted that in recent years more than 20 percent of U.S. generating capacity has been forced offline during winter reliability events when severe cold hits areas that don’t usually have it.

The natural gas production, transportation, and storage system, along with a large part of the electric grid, are a “single interconnected energy delivery system” extending from the natural gas wellhead to the end-use electricity customer. Natural gas supplies are key to the operation of this system, while electricity likewise has an impact on the compressors and other critical equipment. Meanwhile, disruptions to these systems can have “devastating” effects on the public, as demonstrated in the winter storms Elliot and Uri, when freeze-ups paralyzed mechanical and electric systems, the report says.

The areas at greatest risk encompass a large part of the U.S. including the Midcontinent Independent System Operator region covering 15 states; the 14-state PJM Interconnection region in the Mid-Atlantic; New England; the SERC region in the Southeast covering 16 south and southeastern states; the Southwest Power Pool region covering all or portions of 11 states in the central part of the country; The Electric Reliability Council of Texas; the Canadian provinces of New Brunswick, Nova Scotia, Manitoba, Saskatchewan, Quebec; and parts of Maine.

The crux of the matter is that reliability is threatened, and conditions are most challenging when the temperatures are low, demand is high, and people head inside to use electricity and heat. Natural gas is a necessary element to keep the electric system operating due to its critical role in power plant operation and heating, but the flow of gas is subject to many complications.

“Fuel assurance is vitally important to meeting winter electricity demand across North America. Natural-gas-fired generator availability and output can be threatened when natural gas supplies are insufficient or when the flow of fuel cannot be maintained,” NERC said in the report. “During Winter Storm Elliott, natural gas production rapidly declined with the onset of extreme cold temperatures, contributing to wide-area electricity and natural gas shortages.”

The blizzards, winds, snow, and low temperatures during Winter Storm Elliott hit the majority of the U.S. and portions of Canada, plunging millions into outages and causing dozens of deaths. The event was marked by widespread outages of natural gas-fired generation. Outages also affected wind, coal, solar, nuclear, and other resources such as hydroelectric and biomass.

Regarding this winter, in New England, there is concern as to whether there will be sufficient resources for extreme cold, given the existing generation mix, fuel delivery infrastructure, and expected fuel arrangements, NERC said. This is despite considerable effort to replenish stored fuels such as fuel oil and liquified natural gas.

ISO-New England is offering fuel security incentives such as “The Inventoried Energy Program,” which is voluntary and is designed to pay parties that maintain energy for their assets during periods of extreme cold when winter energy security is most stressed.

A cold-weather event leading from the Mid-Atlantic (PJM) to southern areas (SERC-East and SERC-Central) could lead to energy emergencies, the report says. This is due to forced outages of generators and spiking demand, which has risen in recent years while there has been little change in resources since Winter Storm Elliott. There are adequate resources for normal conditions but less so for extreme conditions, NERC said.

The U.S. West, stretching from the Rocky Mountains to the Pacific Ocean, is seen as having adequate supply when winter temperatures hit, but there could be a shortage of 10 GW during peak demand in the Northwest under certain conditions, such as high demand paired with generator outages and low hydroelectric output.

In the Western Electricity Coordinating Council (WECC), resources are expected to be adequate, but this region is among those that have peak electricity demand in summer, when air conditioning surges. WECC’s region includes all or portions of 14 western U.S. states stretching from the Canadian border to Mexico, including California.

In the Northwest, there is some risk this winter under certain scenarios in a region that has been “mixed-season peaking” according to NERC. Power is expected to be adequate in peak demand hours under all conditions other than an “extreme combined scenario,” which would require 5.3 GW of imports in certain peak load scenarios. The level of imports is expected to be adequate, depending on conditions in surrounding areas.

In Texas, the threat of continued cold weather continues in areas where infrastructure has not been retrofitted for extreme cold. There has also been robust load growth in Texas that is not being met with the expansion of dispatchable resources. ERCOT is taking steps, including a new fuel supply service that is intended to supplement natural gas capacity during energy emergencies.

In MISO’s territory, new wind and natural-gas generation has been installed, and the lives of older fossil-fuel plants extended. MISO implemented a seasonal resource adequacy construct to more effectively evaluate risks and resources according to variances at different times of the year.

The Southwest Power Pool has an anticipated reserve margin of 38.8 percent, about 30 percentage points lower than last winter, driven by higher peak demand and fewer resources. Normal forecast peak demand and expected outages are expected to be covered, but extreme weather could cause energy emergencies.

The NERC report includes a series of recommendations—reliability coordinators, balancing areas, and gas system transmission operators should review seasonal operations plans and protocols for communicating potential supply shortfalls in anticipation of generator outages and extreme demand. These same entities should implement “essential actions” identified by NERC in its Level 3 alert, dubbed “Colder Weather Preparations for Extreme Weather Events-III” and undertake recommended weatherization steps prior to the winter season.

Balancing areas should also be aware of the potential for short-term forecasts to underestimate the electrical load that could occur during cold-weather events and be prepared to take early action to manage deficiencies in electric supply reserves. Reliability coordinators and balancing areas should also implement generator fuel surveys to monitor fuel supplies and should prepare for potential supply shortfalls that could affect the readiness of power plants and other generation sources, the availability of fuel, load curtailment, and the ability for sustained operations during extreme cold.

State and provincial regulators should also assist grid operators before and during extreme cold, such as supporting environmental and transportation waivers and issuing appeals to the public to reduce gas and electricity usage.

There have been five cold-weather events that jeopardized electric grid reliability, triggering generation outages in the cold, sometimes requiring the shedding of load—cutting off electricity grid customers. During both winter storms Elliott and Uri, large swaths of the thermal generation fleet went offline.

“What has become clear is that the natural-gas-electric system has now become fully interconnected, each requiring the other to remain reliable (i.e., impacts on one system can impact the other),” NERC said. “These considerations should drive higher levels of coordination to ensure sustained reliable operation of this interconnected system.”

Complicating the picture for natural gas is the fact that infrastructure problems can affect the flow of fuel and production declines can occur even in areas where cold weather happens often. These problems are made more severe when cold occurs across large areas, spurring demand from local distribution companies and gas-fired generators.

Another factor is coal supplies for coal-fired power plants. Issues with rail transportation of coal have subsided as of the 2022-2023 winter season, but other complications could surface this winter. Drought conditions that affected the Missouri River and other waterways could restrict the transport of coal, and low water levels could impact generators that rely on water for once-through-cooling methods.

Extreme temperatures can also affect demand forecasting, which is essential for the reliable operation of the electric system, NERC said. Load forecasts are key inputs for resource-adequacy planning, coordination of seasonal outages, and day-ahead and real-time operational plans. The interaction of cold-weather patterns and the effect on end users are some of the most challenging issues, adding to winter reliability risk.

There can also be a wide range of demand in peaking areas from one year to the next, NERC said, adding that load forecasts for normal peak demand reflect the highest expected system load for an average winter.

In the MISO region, a list of measures, including load-modifying resources, non-firm energy transfers, energy-only resources, and certain internal transfers, are expected to maintain reliability. Extremely cold weather shows how critical resource adequacy and proper planning are necessary for all seasons, not just the summer, NERC said.

Generator fuel supplies are at risk during extended cold-weather periods, NERC said, a vitally important issue across the entire country.

Attempts to forecast load are getting more complex, and underestimating demand causes risks to reliability. Meanwhile, more irregular weather patterns such as strong winds, cold fronts, and precipitation can cause electricity demand to deviate significantly from forecasts. There may also be curtailment of energy transfers in periods of high energy demand. Reliability coordinators and balancing areas might curtail transfers for various reasons, but curtailments might alleviate an issue in one area while causing supply shortages or system issues in other areas.

The NERC Board of Trustees in June 2021 implemented new reliability standards that will be in place this winter, designed to increase coordination between system generators and operators. Other standards have been put in place flowing from the “FERC-NERC-Regional Entity staff report—The February 2021 Cold Weather Outages in Texas and Southcentral United States.” Approval by the NERC board will lead to filing with regulatory authorities and then industry implementation.

NERC surveyed the industry and found that winter preparations are on a “positive trend”, but freezing weather still causes concern. NERC has issued alerts to enhance readiness and reduce risk for the upcoming winter. Generation owners have taken steps to prepare their facilities to operate at extreme temperatures, but failures from past weather events are a concern. These include “improper heat tracing, frozen instrumentation and control equipment, generator circuit breaker tripping in low temperatures or low air pressures, and wind turbine blade icing,” NERC said.

NERC’s new assessment is ringing the alarm bells on electric grid reliability this winter but also offers solutions to what is expected to be another grueling test for the U.S. electricity grid.

NERC’s report offers reliability evaluations for each portion of the country: MISO: MRO-Manitoba Hydro; MRO-SaskPower; NPCC-Maritimes; NPCC-New England; NPCC-New York; NPCC-Ontario; NPCC-Québec; PJM; SERC-East; SERC-Central; SERC-Southeast; SERC-Florida Peninsula; SPP; Texas RE-ERCOT; WECC-Alberta; WECC-British Columbia; WECC-California/Mexico; WECC-Northwest; WECC-Southwest.

All views expressed by the author are solely the author’s current views and do not reflect the views of Concentric Energy Advisors, Inc., its affiliates, subsidiaries, related companies, or clients. The author’s views are based upon information the author considers reliable at the time of publication. However, neither Concentric Energy Advisors, Inc., nor its affiliates, subsidiaries, and related companies warrant the information’s completeness or accuracy, and it should not be relied upon as such

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