NERC’s 2017 Long Term Reliability Assessment Calls For Robust Planning in the Face of New Reliability Challenges

Earlier this month, the North American Electric Reliability Corporation (NERC) released its 2017 Long-Term Reliability Assessment.  NERC’s long-term assessments, released annually, provide a high-level view of resource adequacy and identify long-term issues that will influence planning, development, and analysis of the bulk power system in the United States and Canada.  Pointing to retirements of conventional generation, the rapid addition of variable resources (e.g., wind and solar), a significant influx of natural gas generation, and tightening reserve margins in some areas, the assessment concludes that “[t]he electricity sector is undergoing significant and rapid change that presents new challenges for reliability,” and that more robust planning approaches are needed to ensure the bulk power system continues to be reliably operated.

The assessment finds that NERC-wide electricity peak demand and energy growth are at the lowest rates on record.  Simultaneously, conventional generation retirements have outpaced conventional generation additions.  Natural gas, wind, and solar continue to be rapidly added to the energy mix.  To address these challenges, the assessment provides policy recommendations for policymakers, industry, and itself.  Among its key recommendations:

  • FERC should support new market products and/or changes to market rules that support the provision of essential reliability services, including frequency response and increased system flexibility.
  • FERC should consider the reliability attributes of all generation to limit exposure to risk, and ensure that the generation resource mix continues evolving in a manner that maintains a reliable and resilient bulk power system.
  • All new resources should have the capability to support voltage and frequency.
  • Transmission planners and operators should report on expected reliability concerns related to interruptible natural gas transportation.
  • Where deregulated markets exist, market operators should develop additional rules and incentives to encourage increased fuel security, particularly during winter months.

A media release accompanying the assessment explains that “NERC will work with the industry on a comprehensive review of Reliability Standards to ensure compatibility with the changing resource mix and adequate levels of essential reliability services, including frequency response and increased system flexibility.”

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