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The North American Electric Reliability Corp. (NERC) has released its 2012 Long-Term Reliability Assessment, which provides an independent, annual 10-year view of the electricity industry by evaluating key reliability indicators, including peak demand and energy forecasts, resource adequacy, transmission development, changes in overall system characteristics and operating behavior, and other issues that may impact the reliability of the bulk power system.

According to the report, over the next 10 years, the electricity industry faces a number of emerging reliability issues driven by transformational changes in the industry. The changes include a resource mix with more reliance on natural gas-fired generation, a reduction in coal-fired capacity, and significantly larger amounts of variable generation - mostly wind and solar - and demand-side management. Nonetheless, NERC says that with the exception of challenges it identified in the Electric Reliability Council of Texas (ERCOT) region, the electricity industry has adequate plans to provide reliable electric service across North America for the 2013-2022 period.

This year’s report focuses on eight key findings:

  • Significant fossil-fired generator retirements over the next five years;
  • Planning reserve margins in ERCOT are lower than target;
  • Favorable resource adequacy assessment for majority of areas;
  • Increased dependence on natural gas for electricity generation;
  • Long-term generator maintenance outages for environmental retrofits;
  • Large growth in renewable resources;
  • Significant transmission growth to accommodate new and distant renewable generation; and
  • Demand-side management offsets future resource needs.

Approximately 64 GW of fossil-fired generator retirements have either retired or will retire by 2017; the amount increases to 71 GW by 2022, the report finds. This closely aligns with NERC’s projections from the prior year’s assessment. While the amount of retirements represents a significant reduction in capacity, more than 32 GW of new gas- fired generation and 60 GW of new renewable capacity will be installed over the same period.

“The ongoing changes to the resource mix will require significant adjustments to existing planning and operating practices to maintain grid reliability,” says John Moura, associate director of reliability assessment at NERC. “In many areas across North America, the challenge to reliably accommodate a change in resource mix will require careful planning and time for necessary transmission upgrades.”

Results from the resource adequacy assessment show reserve margins for the ERCOT area are below target levels. According to NERC, a combination of high demand growth and lower-than-anticipated capacity commitments cause planning reserve margins to drop below a target level of 13.75% by 2013.

To ensure reliability can be maintained, NERC says there must be continued enhancement of sophisticated modeling, a risk and probabilistic framework built to address reliability challenges, and growing physical and cyber security monitoring to ensure reliability.

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