DV Journal

A new report from the agency charged with overseeing America’s energy system warns soaring electricity demand is outstripping supply, and current energy policies driving more power plants into retirement are making the problem worse.

The North American Electric Reliability Corporation (NERC) recently released its updated Long-Term Reliability Assessment, and its analysis is dire. The combination of increased electrification of power demand and the retirement of baseload power generation from coal and nuclear is creating a real possibility that power demand will outstrip supply.

That problem is being exacerbated by the huge electricity demands of data centers and artificial intelligence (AI).

“Our infrastructure is not being built fast enough to keep up with the rising demand,” said John Moura, NERC’s director of reliability assessment and performance analysis. “Policymakers, industry leaders, and stakeholders across North America must work together to ensure the expansion of the bulk power system, ensure new resources can interconnect effectively and reliably, and also maintain reliability that our society depends on.”

None of this is news to leaders in the energy sector, who’ve been warning for years that promises of a zero-emissions future will be broken by the realities of increased electricity demand.

“NERC’s new Long-Term Reliability Assessment adds to years of warnings from grid operators, public utility commissioners, FERC commissioners, and other officials that many parts of the country are facing the real possibility of electricity shortages, with some parts facing a risk of shortages as early as next year,” said Michelle Bloodworth, President and CEO of America’s Power, which advocates for America’s coal industry. “NERC has issued eleven warnings over the past five years, and the risk has grown worse over time.”

According to the report, peak summer demand will increase by 15 percent, while peak winter demand is expected to rise by 18 percent.

To put it in more concrete terms, last year’s report projected America would need 80 gigawatts of increased supply to meet peak summer demand. Now, the NERC analysis says that number is 132 gigawatts.

Energy sector leaders are asking: Where will those electrons come from?

“NERC’s latest assessment continues painting a grim picture of our nation’s energy future and growing threats to reliable electricity,” said Jim Matheson. CEO of the National Rural Electric Cooperative Association. “This report points directly to the need for a pro-energy policy agenda that prioritizes reliability and affordability for American families and businesses. We urge President Trump and congressional leaders to prioritize reliability right out of the gate next year before it’s too late.”

Supporters of the Biden administration’s $300 billion spending on green energy in the so-called “Inflation Reduction Act” say renewables will meet the rising demand. However, the NERC report notes that while “new solar PV, battery, and hybrid resources continue to flood interconnection queues, completion rates are lagging behind the need for new generation. Furthermore, the performance of these replacement resources is more variable and weather-dependent than the generators they are replacing.”

NERC’s warning echoes a report released in November by a group of free-market New England think tanks, including the Josiah Bartlett Center.

“Just as in our study, the NERC report forecasts a huge surge in energy demand at the same time New England state governments try to force a shift to less reliable wind and solar power generation,” Josiah Bartlett Center President Drew Cline said Tuesday. “Both studies show that these trends, if not reversed, will compromise reliability, putting New Englanders at risk of not having enough electricity during periods of peak demand.”

Throughout its report, NERC notes an inconvenient truth about renewable sources: They are intermittent. The wind doesn’t always blow, the sun doesn’t always shine — and the impact of drought on Quebec’s power grid shows even hydropower isn’t 100 percent reliable.

Rich Nolan, who heads the National Mining Association, says this is yet another reason why the U.S. should keep reliable coal power in the electricity mix.

“Surging electricity demand is colliding with an unworkable regulatory agenda that is producing self-imposed scarcity, undermining affordability and reliability. There should be no confusion: the nation’s rapidly deteriorating grid reliability and surging power prices are the direct result of policy failure,” Nolan said.

“Fundamentally, we cannot short-change the bridge to our energy future, and that requires recognizing the ongoing critical importance of the fuel-secure, dispatchable power provided by the nation’s coal fleet.”

If the Biden Administration has its way, the Environmental Protection Agency (EPA) will soon implement a dangerous rule that will further threaten Pennsylvania’s severely strained electric grid. The Biden Clean Power Plan would set unachievable limits using technology that is unavailable in the United States for new and existing gas-fired combustion turbines and existing coal plants, which currently generate two-thirds of Pennsylvania’s electricity. The new mandates will impose an effective moratorium on new natural gas plants and force existing natural gas and coal plants to shutter prematurely. Meanwhile, electric ratepayers, mostly families, will bear the brunt of this dual attack on electric reliability and affordability.

Further, if finalized in current form, the federal proposal would have a detrimental effect across all regions of the United States’ power grid. Pennsylvania, the second-largest net supplier of total energy to other states after Texas, would be particularly devastated by this mandate.

Pennsylvania is a member of the PJM power grid, which consists of 13 states and the District of Columbia. Pennsylvania itself supplies 25% of the installed capacity in the PJM grid. As chairman of the Senate Environmental Resources and Energy Committee, I have held multiple hearings to review grid reliability. Overwhelmingly, the testimonies stated that a rush to shutter our fossil fuel-fired power plants would directly impact our bulk power supply.

During a joint hearing with the Senate Environmental Resources & Energy Committee, and the Senate Consumer Protection and Professional Licensure Committee in February 2023, and in subsequent hearings with the standing committees in the House of Representatives, prior to the rollout of the proposed Biden Clean Power Plan 2.0, PJM warned that Pennsylvania (and other PJM states) could face energy rationing by 2026 and rolling blackouts as early as 2028. PJM referred to state and federal policies as forcing the premature closure of reliable thermal generation, which is increasingly being replaced by unreliable, intermittent sources of weather dependent power.

In June 2023, Rob Bair, president of the Pennsylvania Building and Construction Trades, illustrated his concern about the impact of the plan:

“Under the recently proposed Biden Clean Power Plan, the rest of the country is about to experience what Pennsylvania lived through over the past 4 years under the Regional Greenhouse Gas Initiative (RGGI) threat…an effective moratorium on the construction of new natural gas plants throughout the country. Why? Because the technology doesn’t exist for natural gas plants to co-fire with hydrogen at 30% by 2032 and 96% by 2038, let alone achieve 90% carbon capture by 2035. Obviously, Congress and the courts may have something to say about the plan, but as long as this threat remains, no banking institution in the world will risk billions to finance plants – all of which are likely to be built with union labor – that could become obsolete within just a few years of operation.”

Natural gas, nuclear and coal plants are on-demand energy sources and not dependent on weather or time of day, which are essential for electric reliability. These are the facilities that can provide electricity at 3 a.m. on an extremely cold or extremely hot night.  This EPA proposal, coupled with the threat of RGGI hanging over Pennsylvanians’ heads, would be a travesty if we want Pennsylvania to remain a global leader in energy production.

When looking at the big picture, we have to examine the ramifications of what happened with Europe. Germany, for example, ignored warnings and closed many of its nuclear and coal generation facilities in an effort to reduce carbon emissions.

Unfortunately, Germany now finds itself facing a very serious energy crisis as renewable energy sources came up substantially short of production needs. Germany isn’t alone in its shortsightedness. Democratic leaders in western nations have failed to see the big picture time and time again and portions of Europe are now returning to coal use in record amounts.

In May, Pennsylvania Gov. Josh Shapiro wrote to PJM and expressed significant concerns about grid reliability in the wake of the “narrowly averted prospect of rolling blackouts throughout bitterly cold days and nights” during Winter Storm Elliott. In a changing federal energy landscape, we must ensure we can keep the lights on for Pennsylvanians. I am hopeful that Gov. Shapiro will weigh in personally with the Biden Administration and the EPA and urge them to reconsider this dangerous rule.

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