NERC: Electricity Reliable Throughout N. America in Coming Summer with Limited Concerns

May 27, 2008 // Published as a news service by IHS

"We expect that the system will be able to meet electricity demands this summer, though we are closely watching reliability in Southern California and the lingering effects of the drought in the Southeast," said Rick Sergel, president and CEO of NERC.

"It is encouraging to note that several reliability issues highlighted in last summer's assessment have been addressed. Increasing demand and limited infrastructure improvements over the long term are still very much a concern, however."

Specific findings from the NERC report include:

Capacity Margins Adequate
Net capacity margins for the U.S. increased by 1.9% over last summer's assessment, while net capacity margins in Canada show a slight decrease of 1%. All regions project to operate within their target margin levels.

Southern California remains an area of concern, where voluntary conservation and on-call interruptible loads are projected to be needed more frequently than normal. The Southeast remains an area to watch as well, though drought conditions are improving and are not expected to impact reliability this summer.

Coal Inventories Below Average, Natural Gas Supply is Healthy
Driven by strong global demand, U.S. coal exports have increased significantly over the past six months, putting constraints on the supply available to North American generators, which has, in turn, resulted in a drop in coal inventories at Eastern generators.

While these lower inventories do not present an imminent reliability concern, NERC will be monitoring this situation over the coming months. The outlook for U.S. natural gas supply is healthy on all fronts heading into the summer.

Demand Response Reduces Demand, Provides Ancillary Services
Demand response is increasing as a resource to meet electricity demands, with some regions reporting peak demand reductions of more than 6%. In addition, a significant amount of demand response is being used as a resource to increase operational flexibility.

Wind Resources Contribute to Capacity
Wind is becoming an increasingly significant resource in North America as new facilities come into service. New data in the 2008 assessment shows that estimates of capacity available on peak are a critical component of effectively planning for and operating variable resources.

The 2008 Summer Reliability Assessment is available for download from NERC.

Source: North American Electric Reliability Corporation (NERC).