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Shift to NatGas, Renewables Brings Electric Grid Unique Challenges, Opportunities, NERC Says

The ongoing shift away from coal and nuclear power generation and toward natural gas and renewables brings with it "a unique set of challenges and opportunities to maintain the system's inertia and other essential reliability services," according to the North American Electric Reliability Corporation (NERC).

"The accelerating move toward natural gas and renewables means the industry must adopt a more robust approach to planning the bulk power system so that it continues to be reliably operated," said NERC's John Moura, director of reliability assessment and system analysis.

When he announced the Department of Energy's (DOE) notice of proposed rulemaking (NOPR) in September, DOE Secretary Rick Perry said it was needed in the face of the retirement of coal and nuclear generators. Under the proposed Grid Resiliency Pricing Rule, the Federal Energy Regulatory Commission would impose rules on independent system operators (ISO) and regional transmission organizations "to ensure that certain reliability and resilience attributes of electric generation resources are fully valued."

But conclusions reached in NERC's 2017 Long-Term Reliability Assessment don't portend as urgent a need to protect coal and nuclear units from market forces.

Growth in North American electricity demand is at its lowest rate on record, NERC said, and while "planned retirements of conventional generation in Texas and a canceled nuclear expansion in the Southeast mean that reserve margins will drop below targets beginning in 2018 and 2020 respectively...other reserve margins across North America are adequate through 2022."

Retirement plans have been announced for 14 nuclear units, representing a total of 10.5 GW, according to the assessment. Meanwhile, total of 44.6 GW of gas-fired capacity is planned over the next decade, along with 14.8 GW of wind generation. Another 37 GW of solar additions are projected by 2022.

Updating operating rules and incentives is needed for the industry to adapt to the changing fuels landscape, NERC said. Retirements of conventional generation and the rapid addition of variable resources "are altering the operating characteristics of the grid. A significant influx of natural gas generation raises unique considerations regarding risks related to fuel assurance. While related risks and corresponding mitigations are unique to each area, industry stakeholders and policymakers should continue to respond with policies and plans to address fuel reliability."

The report did not directly assess DOE's NOPR. It recommended that FERC "support new products and/or changes to market rules that support the provision of essential reliability services, which includes frequency response and increased system flexibility." NERC also recommended that FERC consider coal and nuclear units' reliability and resilience attributes "to ensure that the generation resource mix continues evolving in a manner that maintains a reliable and resilient” bulk power system.

At the same time, NERC said it plans to conduct a comprehensive evaluation of its reliability standards to ensure compatibility with nonsynchronous and distributed resources, and said it and regional entities should review plans in Texas and the Southeast to determine the likelihood of capacity shortages in those areas and evaluate measures to be taken.    

ISSN © 2577-9877 | ISSN © 1532-1231

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