2023 Long Term Risk Assessment (LTRA)

By Allegra Jones, NERC Reliability Specialist

In December, NERC released their 2023 Long Term Risk Assessment (LTRA). The LTRA is the ERO’s self-assessment of the Bulk Power System’s (BPS) ability to meet demand over the next 10 years. This latest assessment highlights concerns about energy resource adequacy over the next 10 years. Energy demand is rising yet there are looming concerns about generation resource supply, dispatchability and fuels assurance among many other things.

Back in 2020, NERC published a white paper titled “Energy Adequacy with Energy Constrained Resources.” The paper focused on the issues arising from the decarbonization of energy fuels. Transitioning from coal & nuclear generation resources and moving to variable resources was determined to create a less stable Bulk Power System. It was understood that coal and nuclear fuel is stable and readily available whereas variable resource generation is reliant on the sun and wind. The 2023 NERC Long Term Risk Assessment underscores the conclusions of the 2020 white paper and highlights the need for NERC to continue taking actions towards fuels assurance and reliability. According to the 2023 LTRA, the electrical industry’s current demand is set to outpace supply amid the generation resource transition period. The changes in the generation resource landscape will also give way to monumental effects on the Transmission grid which will have to grow and evolve to keep up with the changes in generation. To mitigate concerns regarding adequacy of the Transmission system, RTOs and ISOs will move into a period of major demand requiring heightened development of the transmission system to meet the changing needs of generation resources. BPS Transmission projects being scheduled over the next 10 years have increased to support new generation and enhance reliability. Delays in the completion of these projects are a concern as RTOs face obstacles such as siting and permitting. Load models are also becoming increasingly more complicated which expands risk in a different way.

The LTRA’s “Capacity and Energy Risk Assessment” indicates evidence of resource adequacy concerns over the next 10 years. This means that capacity deficits will occur where generator retirements will outpace the commissioning of new resources to meet rising demand. This creates an obvious risk to the BPS and substantiates NERC’s interest in weather proofing available existing generation resources in areas prone to temperature fluctuations and volatility. NERC standards such as EOP-012 take steps to mitigate the effects of temperature by imposing new requirements aimed at promoting reliability and dispatchability.

The LTRA identified Elevated Risk Areas wherein extreme heat and subfreezing temperatures can potentially impact the BPS by simultaneously increasing energy demand and forcing vulnerable generation offline. The flow of natural gas can be affected by temperature changes and thus the LTRA highlights the need for NERC to continue the focus on fuel assurance and resource availability. Of the many takeaways and action items created by this study, it is understood that new commissioning generation is crucial to meet demand. Diversity of resources is of paramount importance and fuels assurance is the new hot topic. Above all, we can expect that NERC will continue to ensure the reliability and dispatchability of existing generation resources.