In November, the North American Electric Reliability Corporation (NERC) released a report outlining its 2023/2024 Winter Reliability Assessment.
The annual assessment garners a lot of attention from the media, and rightfully so, as the topic of power supply reliability is important. Americans want assurance that their energy needs are being met, especially as weather forecasters predicted an El Nino climate pattern that would produce impactful weather across the US in the winter months.
NERC's Winter Reliability Assessment
NERC's Annual Winter Reliability Assessment looks at several factors when evaluating the generation resource and transmission system adequacy needed to meet consumer demand. The assessment considers weather, available energy generation resources, and electric demand forecasting. The evaluation establishes a risk level for the supply and demand for power within individual regional transmission systems throughout North America.
Electric utilities nationwide are members of one of nine regional transmission organizations (RTOs) and independent system operators (ISOs), also called power pools. These entities are federally regulated by FERC (Federal Energy Regulatory Commission) and work on a regional scale to coordinate, control, and monitor supply and demand on the electric grid. RTOs do not own the power grid, but they work as "air-traffic controllers" of the grid to ensure reliable power supplies, adequate transmission infrastructure, and "day-ahead" electric market coordination of wholesale electricity prices on behalf of their members.
The November 2023 NERC assessment report covers three months (December-February) identified as the winter period. It provides an evaluation of the energy resources necessary to meet projected winter peak demands across the entire US Bulk Electric System (BES) and identifies potential reliability issues of interest and regional risks.
Key findings in the report outline that Southwest Power Pool (SPP), the RTO that serves western and some central Iowa cooperatives, is at an elevated risk for insufficient operating reserves in above-normal conditions such as extreme weather. According to the report, "The Anticipated Reserve Margin (ARM) of 38.8% is over 30 percentage points lower than last winter; this is driven by higher forecasted peak demand and less resource capacity. While the reserve margin is adequate for normal forecasted peak demand and expected generator outages, higher demand levels and outages that have occurred during extreme cold weather result in shortfalls that can trigger energy emergencies. The vast wind resources in the area can alleviate firm capacity shortages under the right conditions; however, energy risks emerge during periods of low wind or forecast uncertainty and high electricity demand."
So, while our region is highlighted as an elevated risk, the report indicates expected generation resources will meet operating reserve requirements under normal peak-demand scenarios.
What does this mean for NIPCO and its Member Cooperatives?
Winter Storm Elliott, which brought extreme cold to our region in December of 2022, challenged power grids across the US as it produced double-digit sub-zero temperatures, high winds, and precipitation, producing blizzard warnings and power outages impacting millions of people. Western Iowa felt the impact of Winter Storm Elliott as these conditions hung over the region for several days, including those leading up to the Christmas holiday.
NIPCO set a new all-time record peak of 269.36 MW (megawatts) at 5:30 pm on December 22, 2022. This value represents a 12.97 MW (5%) increase from the previous peak, recorded on February 16, 2021, of 256.39 MW during Winter Storm Uri.
Power demand reached a record-setting level, but the energy needs of western Iowans were met. And, while SPP and MISO, our neighboring RTO, continue to experience energy emergency alerts (EEAs) and advisories during events that test their limits, the nation's BES continues to evolve and learn from the lessons taught to us during record-setting winter storms like Uri in 2021 and Elliot in 2022.
Just weeks ago, in January of 2024, "life-threatening" cold and back-to-back storms blanketed much of the US, straining the electric grid's generation resources when consumer demand for electric power was at its highest. Arctic cold temperatures that hung around for days in the wake of these storms continued to place pressure on available generation resources in SPP's footprint. The RTO maintained its obligation to serve its member load thanks to higher-than-forecast wind resources coming online within its service territory.
Why does an all-of-the-above energy strategy matter?
Regular occurrences of energy advisories and alerts further display what we already know: the energy transition must consider all forms of generation.
More renewable energy sources like wind and solar are coming online, while traditional sources like coal, nuclear, and natural gas are retiring. While renewable energy has clear benefits, NIPCO believes and advocates for an all-of-the-above energy approach. All-of-the-above promotes the idea that the United States depends on a reliable and sustainable fuel supply that includes developing and incorporating domestically produced renewable energy resources to supplement baseload generation, including biofuels, natural gas, nuclear, hydropower, and coal.
NIPCO and its Members continue to work with policymakers and regulators on a state and federal level for a sensible all-of-the-above generation approach.
While we support and encourage the development and use of renewable energy, the intermittent nature of renewables means there may be times when there simply isn't enough of it to keep the lights on all the time. Its place is to supplement a reliable and affordable baseload generation mix. That's why we must continue to recognize the value of and operate baseload generation plants now and into the future.
NIPCO remains dedicated to providing our Member Cooperatives with safe, reliable, and affordable electricity that is also environmentally responsible. NIPCO continues to monitor and communicate energy supply updates as they arise.
What is NERC?
The North American Electric Reliability Corporation (NERC) is a not-for-profit international regulatory authority whose mission is to assure the effective and efficient reduction of risks to the reliability and security of the grid. NERC develops and enforces Reliability Standards; annually assesses seasonal and long‐term reliability; monitors the bulk power system through system awareness; and educates, trains, and certifies industry personnel. NERC's area of responsibility spans the continental United States, Canada, and the northern portion of Baja California, Mexico. NERC is the Electric Reliability Organization (ERO) for North America, subject to oversight by the Federal Energy Regulatory Commission (FERC) and governmental authorities in Canada. NERC's jurisdiction includes users, owners, and operators of the bulk power system, which serves nearly 400 million people.
What is an RTO?
Many electric utilities across the country are members of one of nine regional transmission organizations (RTOs) and independent system operators (ISOs), also referred to as power pools. These entities are federally-regulated by FERC (Federal Energy Regulatory Commission) and work on a regional scale to coordinate, control, and monitor supply and demand on the electric grid. RTOs do not own the power grid, but they do work as "air-traffic controllers" of the grid to ensure reliable supplies of power, adequate transmission infrastructure, and "day-ahead" electric market coordination of wholesale electricity prices on behalf of their members.