By Rob Nikolewski | rob.nikolewski@sduniontribune.com | The San Diego Union-Tribune
More than half of the power grids in North America -- including California -- face "critical reliability challenges" in the next decade, according to a long-term outlook released last month by the nonprofit that monitors the stability of systems in the continental United States, Canada and a portion of Mexico.
The 148-page report from the North American Electric Reliability Corporation, known as NERC for short, said "surging demand growth," combined with the scheduled retirements of natural gas and nuclear power plants will strain power systems.
Resources such as solar and battery storage systems can help alleviate potential problems, but "completion rates are lagging behind the need for new generation," the report's executive summary said.
The report listed the Midcontinent Independent System Operator, the regional transmission organization that operates the power grid for 15 states (such as Illinois, Michigan, Missouri, Montana, Arkansas and Louisiana) and the Canadian province of Manitoba as "high risk" as soon as this summer. The assessment said the addition of resources in that region is "not keeping up with generator retirements and demand growth."
One notch below, the NERC assessment determined that 10 areas across North America have "elevated risk." Among those is California and a portion of Baja California, where the report says starting in 2028 growing demand and planned retirements "can result in supply shortfalls" during heat waves that cover wide swaths of territory and limit supplies that can be imported from neighboring transmission systems.
In all, the NERC assessment said well over half of the continent is at elevated or high risk of energy shortfalls in the next five to 10 years. Demand growth is anticipated to grow 50% higher than last year's forecast.
"We're seeing demand growth like we haven't seen in decades," John Moura, NERC's director of Reliability Assessments and Planning Analysis, told reporters during a conference call in December.
Part of the explosion in demand is due to artificial intelligence -- specifically, the development of generative AI that produces human-like content such as text, images, video, code and even music.
AI relies on data centers, which need large amounts of power to operate. The International Energy Agency estimates that an internet search with AI uses as much as 10 times the amount of electricity as a traditional Google search.
Crypto currencies consume large amounts of energy as well.
"The size and speed with which data centers (including crypto and AI) can be constructed and connect to the grid presents unique challenges for demand forecasting and planning for system behavior," the NERC assessment said.
The adoption of electric vehicles and heat pumps is also a "substantial driver for demand around North America," the report said.
California has been at the forefront of the transition, setting a goal to derive 100% of the state's electricity from carbon-free sources by 2045, if not sooner.
The NERC assessment said that as "older fossil-fired generators retire and are replaced by more solar (photovoltaic systems) and wind resources, the resource mix is becoming increasingly variable and weather-dependent," referring to the fact that solar does not generate electricity when the sun is not shining and wind turbines don't produce power when breezes flag.
The issues cited by NERC have long been on the radar screens of energy and power system authorities in California.
The California Independent System Operator that manages the electric grid for about 80% of the state released its own 20-year transmission outlook in July 2024.
"California has dramatically accelerated its pace" to integrate new, clean energy sources into the grid, the California ISO outlook said, "and faces an even greater need for additional renewable energy over the next 10 to 20 years."
The state is counting on offshore wind energy to be one of the key sources for new generation. No offshore wind farms have been built yet but plans are underway to erect giant turbines off the coast of Central and Northern California in places such as Morro Bay and Humboldt County.
The California Energy Commission calls for up to 25,000 megawatts of wind energy from the coast of California by 2045.
But such projects -- and anticipated load growth -- will cost money.
The California ISO report estimated transmission buildouts at $45.8 billion to $63.2 billion over the next two decades, "with offshore wind development the primary driver of these higher projected costs."
The state predicts a reduction of 15,000 megawatts of natural gas-fired generation as fossil fuel plants are retired to meet the state's 2045 goals.
To compensate for the loss of natural gas generation, California will rely on tens of thousands of megawatts of power from a combination of battery energy storage, utility-scale solar and wind projects and geothermal resources.
Battery systems can soak up power from renewable sources such as solar during the day and release energy at night when the grid needs it, particularly during the early evening summer hours when customers are still running their air conditioners.
The NERC 10-year assessment included a list of recommendations to assure reliability, some of which California ISO officials said they are already making -- such as enhancing interconnections, prioritizing transmission capacity and streamlining the process so that projects can be efficiently constructed.
"We believe the strategic efforts already underway in the state and within our organization have already resulted in a stronger and more resilient power grid, especially during extreme weather events," California ISO spokesperson Anne Gonzales said in an email.
The Union-Tribune sent an email to the California Energy Commission asking for a reaction to the NERC assessment but did not receive a response.