October 17, 2007

NERC's "2007 Long-Term Reliability Assessment" report takes a measured tone, finding for example that long term capacity margins are still adequate.

          Yet it predictss some areas could fall below target reserve margins within two to three years due to demand growing more than twice as fast as supply.

          Those are some perspectives in NERC's 2007 Long-Term Reliability Assessment report released yesterday.

          "Though some improvements have been made, we are requiring our aging grid to bear more and more strain and are operating the system at or near its limits more often than ever before," said NERC CEO Rick Sergel.

          Peak demand is expected to grow by 18% or 135,000 mw in the next 10 years but resources are only expected to rise by 8.5% or 77,000 mw.

          Counting uncommitted resources, the numbers are a little better with 123,000 mw expected.

          But California, the Rocky Mountain states, New England, Texas, the Southwest and the Midwest could fall below their reserve margins in the next few years without added resources.

          Transmission was added recently but new lines lag projected demand growth and new generation.  The situation is complicated by the "not in my backyard" (NIMBY) attitudes of many consumers.

          "NIMBY is becoming NIMS -- not in my state," said Sergel.

          The events of 2003 prove that we need to move beyond so called "NIMBYism." The fact that power lines connecting with tree limbs in Ohio knocked out power in New York City showed that the grid needs work, he added.

          The Energy Policy Act of 2005 tried to improve the situation with its National Interest Electric Transmission Corridors (NIETCs) but the first two, proposed by DOE this month faced stiff opposition (RT, 10/3).

          Sergel hopes that the parties in the two corridors can work out the needed lines amongst themselves in lieu of having to use the backstop siting authority of the NIETCs.

          Global warming took center stage in energy policy debates and that will likely lead to more emissions-free generation such as wind, solar and nuclear power.

          Wind and solar provide grid operators with some problems since they are intermittent and often placed far away from population centers.

          Wind power played a role in a recent reliability problem in Europe, he added, and boosting the amount of such generation could lead to similar problems here.

          New nuclear power stations -- expected to come online at the end of NERC's 10-year planning horizon -- will need new transmission.

          Reliance on natural gas will continue in the Northeast, Texas, California and Florida and with falling Canadian imports and rising power sector demand, that could create problems, noted Sergel.

          LNG terminals could fill the gap but they come with their own siting troubles.

          The entire report is here: ftp://www.nerc.com/pub/sys/all_updl/docs/pubs/LTRA2007.pdf.