Commodities and Futures News

North America faces power reliability challenges again this winter -NERC

2023.11.08 14:51


© Reuters. FILE PHOTO: A PIKE Energy crew makes repairs after ice storms and freezing rain in the south of Texas left thousands without power and turned roadways into ice rinks during an extreme cold weather period in San Antonio, Texas, U.S., February 2, 2023. REU

(Reuters) – Large parts of the U.S. and Canada power grid serving around 180 million people could be left without enough electricity during extreme cold again this winter, a group that sets North American electric reliability standards said on Wednesday.

In its winter outlook, the North American Electric Reliability Corp (NERC) put the U.S. Midwest, Northeast and southern regions, along with several Canadian provinces, at the “greatest risk for electricity supply shortfalls this winter.”

NERC warned that prolonged, wide-area cold snaps threaten the reliability of bulk power generation and availability of fuel supplies for natural-gas-fired generation.

“Recent extreme cold weather events have shown that energy delivery disruptions can have devastating consequences for electric and gas consumers in impacted areas,” NERC said.

NERC, along with the Federal Energy Regulatory Commission (FERC), on Tuesday urged lawmakers to fill a regulatory blind spot to maintain a reliable supply of gas during extreme cold that was highlighted by an inquiry into power outages during Winter Storm Elliott in December 2022.

During Elliott, both electric and gas systems in much of the eastern half of the U.S. experienced significant stress, resulting in unplanned generation losses, with around 90,500 megawatts out at the same time, NERC and FERC said in a report.

Flows of gas into pipelines were reduced during Elliott, while demand for the fuel for heating and power generation increased, dramatically lowering line pressures. That gas system only narrowly avoided significant outages.

In New York City, Consolidated Edison (NYSE:) declared an emergency because it faced a system collapse that would have taken “many months” to restore service in the middle of the winter, FERC and NERC said.

Grid operators like Midcontinent ISO, PJM Interconnection, SERC Reliability Corp and Texas’ ERCOT are vulnerable to generators going offline under extreme cold weather conditions, NERC said.

In New England, which has limited gas infrastructure, cold weather could choke off gas pipelines, while the Southwest Power Pool (NASDAQ:) sees risks from lower wind power output.

NERC designated Canada’s Saskatchewan at the highest level of risk, saying wind turbine cutouts could lead to energy shortfalls, and said Quebec could see above-forecast power demand.

NERC found that load forecasting in winter is growing in complexity, and underestimating demand is a risk to reliability in extreme cold temperatures.

NERC, however, noted that generator winter preparations are on a positive trend, but warned that freezing temperatures remain a concern for some units.

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