Parts of the Western and Midwestern U.S. states are at elevated risk of blackouts this summer as utilities struggle with supply-chain problems and extreme weather events become more frequent. Blackouts have already occurred in the Midwest at the start of the summer, while the Electric Reliability Council of Texas (ERCOT) asked consumers to conserve energy in May during an early heat wave at the beginning of the month.
System operators have been warning in recent weeks that the electric grid reliability could be at risk amid high summer demand and possible supply reductions. In addition, utilities face supply-chain hurdles to procure the equipment and materials for repairs in case of outages or damages to power lines or transformers in case of heat waves, severe storms, or hurricanes.
Extreme weather, strained grids, and insufficient readily available transformers and other equipment spell trouble for utilities and system operators from California to Ohio this summer, when people are cranking up air conditioning in the heat. Power generation availability is also strained amid droughts in the Western states hampering hydropower electric generation, while unexpected tripping of solar PV resources could also pose issues to reliability.
“Extreme Weather Heightens Reliability Risks This Summer”
As early as in the middle of May, the North American Electric Reliability Corporation (NERC) warned that “extreme weather heightens reliability risks this summer”.
Several parts of North America are either at elevated or high risk of energy shortfalls this summer due to expected above-normal temperatures and drought conditions over the western half of the United States and Canada, NERC said in its 2022 Summer Reliability Assessment. NERC’s risk scenario analysis shows adequate resources and energy for much of North America. However, the Western Interconnection, Texas, Southwest Power Pool (SPP), and Saskatchewan are at “elevated risk” of energy emergencies during extreme conditions. In the Midwest, Midcontinent ISO (MISO) is in the “high risk” category, facing capacity shortfalls in its north and central areas during both normal and extreme conditions due to generator retirements and increased demand, NERC said in May.
Drought conditions could create wide-area heat events on the one hand, and affect output from thermal generators that use rivers for cooling on the other hand. Drought could also reduce generation from hydropower. Low water levels in the Missouri River can impact generators with once-through cooling and lead to reduced output capacity, NERC warned in its report.
In another key finding, NERC said that “unexpected tripping of solar photovoltaic (PV) resources during grid disturbances continues to be a reliability concern.”
Moreover, supply chain issues and commissioning challenges on new resource and transmission projects are a concern in areas where completion is needed for reliability during summer peak periods, NERC noted.
Expectations of higher electricity demand this summer and possible supply reductions have raised concerns that the Midcontinent Independent System Operator (MISO) balancing authority could face tight reserve margins during peak summer demand. MISO, the balancing authority of 15 central U.S. states, expects, in theory, enough available power generating capacity for the summer months. Yet, planned and forced outages could reduce the capacity available.
In May, grid operators from a growing number of U.S. states started warning about electricity shortages as grids cannot cope with the imbalance between demand and supply heading into summer. California, for example, has warned that it would need to produce more electricity than it is currently producing to avoid blackouts. ERCOT asked consumers in early May to conserve energy after six power plants went down unexpectedly.
In June, MISO, which operates the grid providing power to 42 million residents, asked utilities to prepare emergency resources and delay any discretionary equipment maintenance.
The Federal Energy Regulatory Commission (FERC) initiated in mid-June two rulemakings aimed at improving the reliability of the bulk power system against the threats of extreme weather.
“Increasingly frequent cold snaps, heat waves, drought, and major storms continue to challenge the ability of our nation’s electric infrastructure to deliver reliable affordable energy to consumers,” FERC Chairman Rich Glick said.
Outages Already Happening
A heat wave and a high-wind storm in Ohio in the middle of June already led to outages in the Columbus area.
Summer heat waves, droughts in the West, low levels in the Missouri River, and the approaching hurricane season will test grid operators’ capability to maintain the reliability of power supply to Americans this summer. Grid resilience will also have to take into account the growing share of renewable energy in the mix as solar and wind resources have increased at the expense of coal-fired power as coal capacity continues to retire in the United States.
All these factors add to the supply-chain struggles of utilities across America. They are keeping spare inventories for the worst of the storms and heat waves.
“You don’t want to deplete your inventory because you don’t know when that storm is coming, but you know it’s coming,” Ralph Izzo, chief executive at New Jersey’s Public Service Enterprise Group, told Reuters.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
- Canada May Expand Energy Infrastructure To Help Europe
- Goldman Sachs: Upside Risk In Oil Is “Tremendously High”
- Oil Markets Could Face A Doomsday Scenario This Week