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The Accelerating Reliability Crisis

By William White, Sr NERC Reliability Specialist

The North American power industry is currently grappling with what the North American Electric Reliability Corporation (NERC) describes as an accelerating “reliability crisis.” For the first time in decades, nearly half of the continent faces an elevated or high risk of electricity shortfalls over the next five to ten years. This shift is primarily due to a widening gap where surging electricity demand is rapidly outpacing the addition of new, reliable power resources. 

The Core Drivers of Grid Strain

Several converging factors have created this precarious situation:

  • Explosive Demand Growth: After years of stagnant growth, demand is skyrocketing. NERC’s 2025 Long-Term Reliability Assessment (LTRA) projects a 15% increase in summer peak demand and an 18% increase in winter peak demand over the next decade. This is largely driven by the “digital economy,” specifically massive data centers for AI and cloud computing, alongside the widespread electrification of transportation and heating.
  • Rapid Generator Retirements: Traditional “baseload” power plants—primarily coal and some natural gas—are being retired at an unprecedented rate. NERC warns that approximately 105 GW of seasonal capacity is slated for retirement by 2035, often driven by environmental regulations and aging infrastructure.
  • A Shifting Resource Mix: While new generation is being added, it consists mostly of solar, wind, and battery storage. Unlike the fossil fuel plants they replace, these “variable” resources are weather-dependent. NERC has highlighted risks involving Inverter-Based Resources (IBRs), which can unexpectedly “trip” or disconnect during grid disturbances, further destabilizing the system.
  • Extreme Weather: Frequent and severe weather events, such as prolonged Arctic cold snaps (like Winter Storms Uri and Elliott), are no longer “outlier” events but major operational hurdles. These storms simultaneously drive record demand for heating while causing mechanical failures at gas-fired plants or freezing wellheads that cut off fuel supplies. 

Regional Risks and Hotspots

NERC categorizes regions based on their vulnerability to shortfalls: 

  • High Risk: Areas likely to face inadequate supplies during normal peak conditions. By 2028-2030, this includes the Midcontinent Independent System Operator (MISO), PJM (Mid-Atlantic), ERCOT (Texas), and the Basin and Northwest subregions of the Western Electricity Coordinating Council (WECC).
  • Elevated Risk: Regions that have enough power for “normal” conditions but are likely to fail during extreme weather. This currently covers most of the rest of the U.S., including California, New England, and the Southwest Power Pool. 

Regulatory and Strategic Responses

To “bend the curve” of this risk trajectory, NERC and federal agencies like the Federal Energy Regulatory Commission (FERC) are taking urgent action: 

  1. Standardizing IBRs: NERC has developed new standards to ensure that solar and wind resources remain connected and supportive during grid stress.
  1. Siting and Permitting Reform: NERC is urging policymakers to streamline the “red tape” that delays the construction of new transmission lines and generation facilities.
  1. Managing Load Flexibility: Experts are looking at ways to treat large loads like data centers as “virtual batteries” that can reduce their consumption during peak hours to balance the grid.
  1. Policy Re-evaluations: There is an increasing call for “reliability-first” policies, with some leaders pushing for the delayed retirement of coal and gas plants until sufficient replacements are fully operational. 

NERC’s message is clear: the transition to a cleaner grid is happening, but the infrastructure and coordination required to keep it reliable are currently struggling to keep pace with the sheer speed of change.