The Reality of the Risk To Reliability

It wasn’t supposed to happen that way.

It was a hot day in August 2003 when the United States experienced the largest blackout in the nation’s history. More than 50 million people lost power from Michigan to New York and even into Canada.

While essential services remained in some areas, the worst-case scenario became a reality in others. Backup generators failed. Transportation came to a halt. Water systems lost pressure. Telephone lines were overloaded, and cell towers went down.

Less than two years after the September 11 attacks, the blackout left the nation vulnerable as critical infrastructure, including the systems that detect unauthorized access to key security systems, borders, and ports, went down.

The outage lasted up to two days, but most people had power restored within eight hours. Still, nearly 100 people died, and the event cost billions. An investigation revealed that the blackout was sparked by a software malfunction at an Ohio utility, coincident with a tree making contact with a high-voltage conductor, and snowballed into overloaded transmission lines that ultimately led to the shutdown of at least 265 power plants, as operators shed load to prevent damage to their systems amid the cascading event. Much of the Northeast regional electricity system had collapsed.

What the nation gained, however, was a real-life lesson in how vulnerable the electric grid can be and how easily the domino effect can take it down. This reality led to the designation of the North American Electric Reliability Corporation (NERC) as North America’s Electric Reliability Organization (ERO). NERC is an independent organization now tasked with monitoring risks to the electric grid. It has been granted the power to develop and enforce mandatory standards so history does not repeat itself.

And now, that very organization is warning that it could.

Richard Burt, A Dire Warning

Richard Burt parks his Tesla at the offices of the Midwest Reliability Organization (MRO). In 2007, NERC began delegating some of its authority to regional entities, including MRO. Burt worked in the energy industry as a power systems engineer specializing in transmission planning studies, control systems, power quality, and telecommunications before joining MRO in 2012. He currently serves as senior vice president and chief operating officer. He is both pro-clean energy and hyper-focused on reliability; right now, he’s worried.

Burt spoke candidly to Wisconsin’s electric cooperative leaders at WECA’s Energy Issues Summit, saying the clean energy transition is moving too fast and putting reliability at risk. According to Burt, the data is simple—energy capacity (supply) is dropping, and demand is increasing.

“We’ve got less generation in this country today than we did 10 years ago,” he said, noting that even with all the new solar installations, solar generation has only grown from 1.7% in 2012 to 3% in 2022. The bulk of generation still comes from coal and natural gas, especially on high-demand days.

Burt said as more coal plants are retired and replaced with intermittent renewables such as wind and solar, the risk of an energy shortfall grows, including here in the Midwest. NERC rated the MISO region, comprising 15 states including Wisconsin and part of Canada, as “orange” or “elevated risk” for this summer.

“Up until three years ago, we didn’t even do color-coded charts because nothing was ever orange. And this winter is going to be red,” Burt said. “It’s meant to be a wake-up call.”

A red designation represents “high risk,” the most critical rating. This means the area will require increased monitoring due to the risk of a potential electricity shortfall that could lead to rolling blackouts (forced outages).

Burt presented data showing a stark increase in “forced outages” in recent years. Operators initiated five hours of forced outages in 2018, no hours in 2019, 70 hours in 2021, and 60 hours in 2022.

“The past two years, in particular, have seen a big uptick in the amount of load we are having to shed due to the widening energy gap,” Burt said. “During Winter Storm Uri in 2021, grid operators ordered the largest manually controlled load-shedding event in U.S. history.”

“Working across jurisdictions is critical to solving this challenge, and right now, we are doubling our efforts on state outreach to ensure a unified understanding of how policies affect reliability of the interconnected system,” Burt said. “I’m not anti-clean energy. It’s just going too fast.”

Many people at the Energy Issues Summit wanted to hear more from Burt, so we reached out with more questions. His answers are below.

What is the greatest threat to energy reliability in the nation and why?

The generation fleet is transitioning to resources that are more weather-dependent at the same time that we are seeing more extreme and unpredictable weather, significantly increasing reliability risks to the North American bulk power system (BPS). Power demand is continuing to increase—and will increase even further as the economy becomes more electrified—at alarming rates, while capacity is not. Therefore, the energy gap is widening.

What needs to happen to protect reliability?

The era of fuel on demand is ending. Transitioning away from resources that are generally relied upon to always be available, largely because the fuel can be stored (i.e., coal and nuclear), to resources that are dependent on real-time weather conditions and where the fuel cannot be stored, creates a more complex scenario wherein fuel assurance and forward energy supply planning become increasingly important and much more complicated. To address this challenge, policymakers, regulators, and industry need to work together toward the common goal of reliability of the bulk power system. One example of this is authorities working collaboratively with industry to develop plans that more carefully manage the transition of resources, including delaying plant retirements until replacements for the energy provided by those plants are available and on-line.

You mentioned that demand is growing, and capacity is not. Can you explain a little more about that?

To put it simply, we are entering a period of load growth that has not been seen in decades and are also trending towards less generation capacity each year. Policies targeted at reducing carbon emissions have led to increased electrification, which is expected to continue. For example, over half of all new cars sold in the U.S. by 2030 are expected to be electric vehicles. This is just one of the drivers leading to a spike in electricity demand. At the same time, decarbonization efforts have led to premature retirements of fossil fuel generation. While cleaner sources of energy and storage technologies are growing at an impressive rate, those installations are not covering the generation capacity.

NERC released its Reliability Risk Priorities Report showing “energy policy” as a key risk, for the first time ever. Why?

This report is developed by NERC’s Reliability Issues Steering Committee (RISC) with coordination between ERO Enterprise staff (including MRO) and industry participants. The report is significant in that not only does it identify key risks, but it also helps prioritize ERO and industry risk mitigation efforts. Energy policy was among five top risks identified in this year’s report because of the interdependencies that increasingly exist between federal and state energy policy and reliability of the bulk power system. This new risk is unique in that it spans the other four risk profiles of grid transformation, resilience to extreme events, security risks, and critical infrastructure interdependencies. If not properly managed, this risk will augment the impact the other risks have on BPS reliability and security.

Richard Burt of the Midwest Reliability Organization delivers candid comments to attendees of WECA’s Energy Issues Summit in August, warning that the risk to energy reliability is getting worse.

NERC and MRO have been historically fuel agnostic. Why are these independent agencies now offering input on fuel source?

NERC and the Regional Entities do not promote one fuel source over another. Our role as technical experts is to evaluate the performance and overall health of the bulk power system and raise awareness of risks that could impact reliability. We have a unique view of the system that spans all four interconnections…essentially all of North America. The data we collect and analyze helps to inform decisions made by industry, federal, state, and provincial regulators, and other key policymakers. The reality is that a diverse mix of fuel sources is needed to ensure reliability of the ever-evolving power grid. Managing the pace of change is the central challenge for reliability today, which is why you are hearing more about the different attributes of generation related to each fuel source now.

Can the nation meet current federal emissions goals and maintain reliability? Why or why not?

Reliable electricity is critical to our society and our way of life. A utility executive recently said that it is the most critical of critical infrastructures because without it, the others cease to exist. The communications, healthcare, transportation, and banking industries all rely on electricity to operate. Because of this, reliability of the power grid should be at the forefront of federal emission reduction policies and the timing of the transition to zero emissions needs to be carefully managed.

What about battery power? Could that be the solution?

Innovation in battery technology has given us a new tool to help manage system constraints. As we consider batteries as a storage solution, it is important to understand a couple of key facts. First, batteries consume about three times as much power as they discharge, so they are a larger load than a resource in some respects. However, there is a lot of value in the ability to choose when to discharge batteries and inject power into the grid. Second, while there are some new technologies being evaluated right now, most installed commercial battery systems can only inject for about four hours. So, for example, a battery paired up with an adjacent wind farm could charge when wind output is high and discharge when it is low to maintain a consistent power output, but that time is limited to four hours, which would not be adequate for situations where there are multiple days of low wind. Batteries are absolutely part of the solution, but they are not THE solution.

What are your thoughts on expanding nuclear?

As I mentioned earlier, a diverse mix of fuel sources is needed to ensure reliability of the ever-evolving power grid. This includes nuclear power. Nuclear power is unique in that it provides an almost uninterruptable supply of power without carbon emissions. A significant amount of innovation and progress has been made recently on nuclear, so I see it being part of both the strategy to zero emissions and the solution to our energy assurance challenge.

Do you think we will experience rolling blackouts in the near future?

Both NERC’s and MRO’s recent reliability assessments warn of an elevated risk of energy shortages due to increasing demand, severe weather, and a generation fleet that has less capacity.

Anything else you would like to add?

MRO is committed to a vision that we share across the ERO Enterprise and with industry: a highly reliable and secure North American bulk power system. Even though this is a difficult challenge, I believe that by working together we are collectively up to the task.

—Julie Lund