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The North American Electric Reliability Council (NERC) expects resources will be adequate to meet demand over the next five years as long as system expansions and dependability rules are followed.

The 2005 Long-Term Reliability Assessment produced by NERC -- comprising 10 regional reliability councils, whose members account for virtually all the electricity supplied in Canada, the U.S. and a portion of Baja California Norte, Mexico -- actually measures supply and demand capability as well as transmission reliability in North America through 2014 in examining key issues and trends affecting the dependability of future power generation and distribution systems.

According to the report, electricity demand is expected to grow by about 69 500 megawatts between this year and 2009, while projected resource additions over this same period could total about 49 000 megawatts, depending upon the number of merchant plants assumed to be in service, said Michehl Gent, who is retiring as president and chief executive officer at NERC this year, noting “resource adequacy in the longer term is more uncertain.”

On Sept. 12, Richard Sergel replaced Gent, who retired after 24 years in leading the organization, as president and CEO at NERC.

The NERC assessment indicated more than 12,400 miles of new transmission are proposed over the timeframe to 2014, which represents a 5.9% increase in the total amount of installed capacity over the 10-year period.

“Although the transmission system is expected to operate reliably throughout North America, some portions of the grid will not be able to support all desired electricity market transactions,” Gent indicated. “Some well-known transmission constraints are recurring, while new constraints appear as electricity flow patterns change,” he noted.

“As customer demand increases and transmission systems carry increased power flows, portions of these systems will be operated at or near their reliability limits more of the time,” Gent said in suggesting “reliability coordinators, transmission planners and system operators will need to regularly communicate and coordinate their actions to preserve the reliability of the transmission system.”

According the Gent, most regions do not anticipate any problems with fuel supplies for the assessment period, “however, the industry’s growing dependence upon natural gas as a primary fuel for new power plants is an emerging area of concern.”

In addition, “Hurricane Katrina has dealt a terrible blow to the people and infrastructure of the (U.S.) Gulf (of Mexico) states and utilities in the region are struggling to assess the damage and restore service,” the retiring CEO said.

NERC plans to assess any reliability impacts resulting from damage to equipment and fuel supply interruptions caused by Katrina as part of its upcoming winter assessment.

According to the just-released, long-term assessment, resource adequacy over the period to 2014 could be influenced by:

• timely completion of planned capacity additions, including the ability to construct the required associated transmission facilities;
• ability to obtain necessary siting and environmental permits;
• ability to obtain financial backing;
• price and supply of fuel; and,
• political and regulatory actions.

In areas of North America with a restructured electric industry, such as Ontario and Alberta in Canada, the NERC report indicated the addition of new generating capacity depends upon:

• basic economic demand and supply fundamentals;
• traditional planning reserve margin requirements and other resource adequacy criteria established by industry, utility and regulatory groups; and,
• the response of power plant developers to relevant market signals.

“In these areas, capacity margins will likely fluctuate, similar to normal business cycles experienced in other industries,” the NERC assessment said. “In areas that have not undergone restructuring, new capacity will be constructed primarily in response to resource adequacy criteria established by individual utilities or their regulators.”

In its examination of resource adequacy in specific regions, the NERC assessment singled out the Northeast Power Coordinating Council (NPCC), which includes Ontario, Quebec and the Maritimes in Canada as a region that could experience some problems.

The specific concern described was the Ontario government’s commitment to phase out coal-fired generation in the province.

Since coal-fired generation accounts for about 21% of current generating capacity in Ontario, “a substantial amount of new supply, refurbished generation or additional demand-side resources will be required,” the NERC assessment noted.

“By the summer of 2015, the region must address a deficiency of 4 239 megawatts,” the analysis said. “In the interim, it will be important to maintain the reliability of existing coal-fired generating stations despite their planned shutdown.”

The NERC report indicated Ontario’s Independent Electricity System Operator will continue working with the provincial government to ensure that an appropriate amount of replacement supply or demand initiatives, at suitable locations, is reliably available before the coal-fired generators are shut down.

Because of the high demand for gas for home and commercial heating needs, during New England winters, the availability of the fuel for generation was identified as potential area of concern for the NPCC.

But, NERC noted that as a result of a January 2004 period of extreme winter conditions in New England, the market participants in this region developed a market rule for cold weather event operations that includes:

• improving the availability of information about gas supply and transportation for use by ISO-New England, the main electricity system coordinator in the region, operations personnel;
• improving the information provided to regional market participants regarding potential cold weather events and an assessment of power-system conditions during those events; and,
• in extreme cases, shift the day-ahead energy market timeline to allow for early commitments of generators in anticipation of possible supply or transportation constraints and operable capacity shortages on the bulk power system.