NERC sees no reliability problems this winter but warns of fuel supply risks

by Peter Maloney
APPA News
November 23, 2020

There will be sufficient resources in service to meet electrical demand during the upcoming winter season, according to the latest reliability assessment by the North American Electric Reliability Corp. (NERC), but the organization also cautioned that there are continuing risks regarding supplies of natural gas in New England, California and the Southwest.

NERC’s 2020-2021 Winter Reliability Assessment covers December, January and February. The report found that anticipated reserve margins will meet or surpass reference reserve margins in all areas under normal conditions.

Sufficient fuel supplies, specifically of natural gas, remains a concern in some areas, however, as demand for natural gas, both as a fuel for power generation and for space heating, continues to grow, NERC said.

During particularly cold weather generating units that lack alternate fuel sources or that do not have contracts for firm fuel delivery may not be able to meet demand, the report noted.

In New England, where natural gas availability is limited, firm load would still be able to be served even under abnormally cold conditions, but under more severe conditions, such as those experienced in January 2018, limited oil inventories could lead to “eventual loss of generation and firm load shed,” NERC said.

The NERC report also noted that California and the southwest area in the Western Interconnection could face “fuel supply curtailment or disruption from extreme events that impact natural gas supplies,” as those regions rely on natural gas-fired generation capacity for over 60% of on-peak demand and have limited gas storage.

Overall, extreme weather conditions – such as wind generation blade icing, frozen coal piles, and curtailment of natural gas pipelines – continue to pose a risk to the bulk power system during the winter, NERC said. Unusually cold temperatures could result in increased demand and higher levels of generation forced outages and create conditions that would lead system operators to take emergency actions.

The NERC report also examined ongoing impacts from the COVID-19 pandemic, which it said is causing “increased uncertainty in electricity demand projections and presents cybersecurity and operating risks.” The reliability organization noted that no specific threats or degradation to reliability have been identified for the winter season. However, the report also noted that if maintenance operations on generation and transmission assets are not able to be performed because of the pandemic, “forced outages may escalate.”

The pandemic could also affect the accuracy of demand projections in the near term and have the potential to exacerbate or alleviate planning reserve shortfalls in areas that are below or near reference margin levels, NERC said.

NERC’s assessment also noted that restoration efforts in response to the recent hurricane season could continue into the winter. While restoration efforts in Arkansas, Texas, and north Louisiana have been completed, restoration work that is often characterized as a rebuild, continues in southwest Louisiana, primarily in and around the city of Lake Charles.