Energy watchdog finds fossil fuel plant shutdowns creating long-term vulnerabilities to US electric grid

The U.S. electric grid highlighted a number of problems facing the nation's electric grid which could result in devastating blackouts and supply shortfalls over the next decade, according to a long-term analysis issued Thursday by a top regulatory authority.

The North American Electric Reliability Corporation (NERC) — a nonprofit organization that regularly monitors the grid and makes periodic recommendations to boost reliability — determined in its annual Long-Term Reliability Assessment (LTRA) report that large swaths of the U.S. are at high or elevated risk of capacity shortfalls. The report noted one major issue facing the grid is that utility companies have retired existing fossil fuel power generation too quickly without ensuring sufficient replacement sources are in place.

"Parts of the North American bulk power system face resource capacity or energy risks as early as the summer of 2023," the report stated.

"Capacity deficits, where they are projected, are largely the result of generator retirements that have yet to be replaced," it continued. "While some areas have sufficient capacity resources, energy limitations and unavailable generation during certain conditions (e.g., low wind, extreme and prolonged cold weather) can result in the inability to serve all firm demand."

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The LTRA report stated that California, and large portions of the Midwest and South faced were at a high risk of electricity shortfalls between 2023 and 2027, meaning those regions could experience blackouts at normal peak conditions. Texas, the Northeast and West are at an elevated risk, meaning they could experience blackouts during extreme conditions.

In addition to early retirements, the assessment concluded that American grid systems are vulnerable to extreme weather events and is not fully prepared for and expansion of electrification of transportation, space heating and other sectors that could result in higher electricity demand. 

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While NERC is supportive of transitioning the grid to cleaner sources of energy like wind and solar, the group warned that failing to properly execute the transition could result in significant reliability declines across the country.

"Two major concepts that came out of our report this year are about the transformation and being able to manage the pace of transition in an orderly way and that making sure new resources, when they are replacing retired generation, provide sufficient energy but also essential reliability services," John Moura, NERC's director of reliability assessment and performance analysis, told reporters on a media call Thursday.

"In other words, we need to manage the pace of the changing resource mixture to make sure we are adequately planning and operating the bulk power system," he added. 

In one example of future shortfalls, the LTRA report highlighted how the region managed Midcontinent Independent System Operator, which oversees much of the Midwest, will face grid problems since natural gas and coal generation retirements are forecasted to far outpace green energy development. 

In another example, NERC concluded that a lack of natural gas pipeline transportation in New England could create supply shortfalls in coming years.

And the report also warned that California's pace of energy generation retirements could result in further problems.

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"There's an additional 22 gigawatts of generation that could retire in the next five years and, in many cases, that could exacerbate the capacity and energy shortfall risks," Mark Olson, NERC's manager of reliability assessments, told reporters Thursday. 

"This really stresses the need for having robust planning processes that can manage the pace of retirements and prevent risk and ensure that we preserve system reliability and essential reliability services that maintain frequency and stability of the system," Olson said.

Meanwhile, federal and state lawmakers have pushed policies which would transform the grid from one reliant mainly on fossil fuels like natural gas and coal to one more dependent on clean energy like wind and solar energy. At the same time, lawmakers have also supported an expansion of electric vehicles which would increase demand on the grid.

However, experts have warned that rushing such a transition could lead to devastating impacts on consumers.

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"The Biden administration, from the get-go, has pursued policies to move aggressively away from fossil fuel generation," former Federal Energy Regulatory Commission Chairman Neil Chatterjee previously told Fox News Digital. 

"I'm someone who is excited about the energy transition and believes there are great benefits to Americans from the energy transition, but there are certain folks within the administration who want to skip the transition part of the energy transition, and move dramatically away the necessary generation that we need."