It’s Time To Rethink Grid Reliability

This article is the first in a series entitled “Real Talk on Reliability,” which will examine the reliability needs of our grid as we move toward 100% clean electricity and electrify more end-uses on the path to a climate stable future. It was written by Michelle Solomon, a senior policy analyst in the Electricity Program at Energy Innovation.

The beginning of summer brings with it sunshine and vacations for many, but increasingly these warm months are accompanied by extreme heat, a symptom exacerbated by climate change. As a result of widespread heat-waves, people and businesses crank their air conditioners for relief, increasing electricity demand and adding stress to the grid. At the same time, this electricity is getting cleaner – in 2022 the United States generated 40 percent of its electricity from carbon-free sources. Fifteen percent was generated from wind and solar energy, both of which are now the cheapest sources of electricity, and the fastest growing.

To help prepare the nation’s electricity grid for the season ahead, the North American Electric Reliability Corporation (NERC) —the non-profit regulatory authority whose mission is to assure the effective and efficient reduction of risks to the reliability and security of the North American grids—recently released its annual summer reliability assessment.

Their report examined both the United States and Canada’s ability to meet expected summer electricity demand, including an evaluation of the risks associated with wildfires and drought, and provided short-term recommendations on how to overcome any potential shortfalls.

NERC’s findings follow a trend of the last several years, highlighting that while electricity supply is sufficient across the country under normal summer conditions, during extreme heat several regions are at risk for supply shortfalls. NERC cited the retirement of aging and expensive fossil fuel power plants as a factor in this dynamic, but also found that “increased and rapid deployment of wind, solar, and batteries make a positive difference this year,” highlighting that one of the most important tools bolstering reliability is adding new, clean generation capacity.

As we move toward a cleaner electricity system, reliability is of increasing focus for policymakers, utilities, system operators, and electricity consumers alike, and for good reason – lives depend on the power staying on.

Changing reliability considerations with the energy transition

Our grid is undeniably in transition. The shift to clean electricity and electric end-uses is picking up pace in response to federal policy and incentives, state clean energy goals, and utility leadership. In 2022 wind and solar accounted for 74 percent of new utility-scale generating capacity, while new natural gas capacity made up only 25 percent. Battery storage has also seen a meteoric rise with the addition of 4 gigawatts (GW) across the country last year in a near doubling of storage capacity. This fast-growing addition of renewables and storage is welcome as electricity demand increases and uneconomic fossil fuel plants retire. Other demand-side resources and operational changes are also in the toolbox as grid operators work quickly to manage the transition without impacting grid reliability, safety, and affordability.

With all of these changes to the physical system, we need to also evolve the way we think about reliability. Ric O’Connell, Executive Director of GridLab, highlights that one of the biggest misconceptions in the energy transition is the need for baseload power, or plants that are expensive to build but cheap to operate and therefore run almost all the time. O’Connell explains that “we know we need a portfolio of resources on the grid that, working together, can provide resource adequacy, or energy when we need it, but that portfolio does not necessarily need to include baseload or 24/7 resources.”

While the shift to this new paradigm presents challenges, we are gaining confidence in the reliability of a clean grid. Previously there was “trepidation about even adding small amounts of weather-dependent power sources like wind and solar to the grid,” said O’Connell. “Now, large, sophisticated grids in the Midwest, Texas, and California regularly run on a 70 percent or higher share of wind and solar for hours at a time.” We have proven examples of smaller grids running at even higher percentages of weather dependent resources – the island of Kauai has been able to run on 100 percent renewable energy for at least nine hours at a time. Multiple studies show that the U.S. grid can run on up to 80 percent clean electricity with technology that is available today.

To build this portfolio, utilities, regulators, and grid operators will need to be able to accurately evaluate each resource’s contribution to resource adequacy and operational reliability. As Federal Energy Regulatory Commissioner Allison Clements recently said, “Reliability discussions will lead to the more cost-effective solutions if they start with the data-driven analytical work required to understand and quantify the problem that we are aiming to solve.”

The nuts and bolts of reliability

While the grid shifts from a still fossil-heavy system to one that is powered by clean, carbon-free electricity generation, there are three questions we need to answer. First: can a clean, carbon-free grid offer the same or better reliability we have today? Second: can the grid be reliable as we are transitioning? And third: can a clean grid meet the demand from more electrified end-uses without compromising reliability? This series will aim to demonstrate that the answer to these questions is “yes”, but not without the correct planning and policies in place.

Before answering the above questions, it’s helpful to understand the basics of electricity reliability—a term used often, but not always consistently. There are four separate but interconnected pieces to ensuring that power from the grid is reliable. First is resource adequacy, which means having enough energy to meet demand—either in the form of supply-side generation or demand-side distributed resources. Second is reliable operation of the grid, including generation, transmission, and distribution of electricity—the monitoring and control of the system, balancing energy supply to match the demand and ensuring transmission lines and facilities stay within their safe operating limits. Third is resilience, which is the ability of the electricity system and other connected systems – like transportation, health, and safety – to ride-through or bounce back quickly in the face of outages. Connected to resilience is grid hardening, which refers to a myriad technology and operational solutions that help the grid withstand these major events without disruption.

Reliability is a characteristic of the whole electricity system, to which individual resources contribute. Every source of electricity has different characteristics that should complement each other in a balanced portfolio. With respect to resource adequacy, no resource is available 100 percent of the time. For example, solar and wind output vary over the course of the day, year, and with weather conditions, where batteries and transmission and distribution (T&D) lines move energy from when and where it is generated to when and where it is needed. Large-scale nuclear plants are built to provide consistent power but are difficult to ramp up or down to adjust supply when needed. Gas and coal plants are typically considered “dispatchable” or available on demand, but can suffer outages, particularly correlated outages in extreme weather events as seen by recent Winter Storms Uri and Elliott. Maintaining a reliable grid requires valuing every resource’s contribution accurately, and building a generation portfolio that balances supply and demand throughout the day and year.

When electricity supply and demand are matched, the electricity flows through the grid at a constant frequency and voltage but as supply and demand vary throughout the day, frequency and voltage can begin to fluctuate. Grid services are the contributions that different resources provide to maintain stability such as frequency response, voltage regulation, and more. Historically, spinning turbines powered by gas, coal, and nuclear helped ensure stability, though new solutions can compete to fill this role as public acceptance, policy, finance, and economics push conventional resources to retire. The ability of wind, solar, and batteries to provide grid services compared to spinning turbines is detailed in the below figure from Milligan Grid Solutions.

Grid services provided by inverter-based and synchronous resources. Source: Milligan Grid Solutions.

NERC, electricity providers, regulators, and system operators share responsibility for each aspect of reliability. NERC assesses national resource adequacy, sets operational reliability standards, monitors compliance with those standards, and can penalize non-compliant reliability authorities. Electricity providers plan their future resource mix and in the West and Southeast operate their bulk power systems.

In order to maintain reliability and ensure the transition goes as smoothly as possible, policymakers will need to remove barriers to building new, clean resources and connecting them to the grid. With nearly double the current U.S. generating capacity just waiting in interconnection queues across the country, new transmission lines are the “biggest barrier to adding sufficient new clean energy,” according to O’Connell, and “policy plays a critical role in how we plan, permit, and pay for transmission. Good policy means we can get the transmission built in the timeframe we need, so clean energy can come online and maintain reliability.” Additional Federal leadership is essential, but while the recent debt negotiations considered several transmission reform policies, the ultimate outcome lacked substantive action. Distribution system upgrades needed to support more electrified end-uses, such as heat pumps and electric vehicles, can also be hindered by regulatory and utility processes if they aren’t anticipated.

A clean, reliable grid capable of supporting mutual goals of decarbonization and electrification is possible, but it won’t happen on its own. The rest of this series will cover deep dives on key topics in grid reliability including: the future of reliability services with clean energy, supply- and demand-side approaches to keeping the grid reliable, the impacts of extreme weather and climate change, and the need for clean, firm power.