POWER July 2023 - 24

MID-YEAR INDUSTRY FORECAST
Clean Energy Transition Continues
Despite Reliability, Supply Chain,
and Financial Uncertainty
Although there is a risk of energy shortfalls in parts of the U.S. if extreme summer
temperatures materialize, there is no stopping the clean energy transition that is
sweeping the nation. Energy storage capacity is poised to skyrocket with government
backing and equity-intensive financing.
Aaron Larson
A
s the Northern Hemisphere moves
headlong into the summer peak
season, weather is top of mind
for most power system managers. The
North American Electric Reliability Corp.'s
(NERC's) 2023 Summer Reliability Assessment,
released in May, says, " Weather
officials are expecting above normal
temperatures for much of the United
States ... In addition, drought conditions
continue across much of the western
half of North America, resulting in unique
challenges to area electricity supplies and
potential impacts on demand. " NERC
warned, " two-thirds of North America is
at risk of energy shortfalls this summer
during periods of extreme demand. "
Mark Olson, NERC's manager of
Reliability Assessments, noted that increased,
rapid deployment of wind, solar,
and batteries has made a positive
impact on the system, but he said " generator
retirements continue to increase
the risks associated with extreme summer
temperatures, which factors into potential
supply shortages in the western
two-thirds of North America if summer
temperatures spike. "
" The 2023 Summer Reliability Assessment
makes clear that electric grid
reliability is increasingly weather dependent
as the power system transitions to
a greater reliance on wind and solar, " Michelle
Bloodworth, president and CEO of
America's Power, a national trade organization
that advocates on behalf of the
U.S. coal fleet and its supply chain, said
in a statement issued to POWER.
The NERC report says, " Unexpected
tripping of wind and solar [photovoltaic]
resources during grid disturbances continues
to be a reliability concern. " Meanwhile,
it says, new Environmental Protection
Agency (EPA) rules that restrict power
plant emissions, including the Good
24
1. Energy storage capacity has been growing rapidly in recent years with no end in sight.
American Clean Power reported there were 245 storage projects in development, totaling
19,621 MW/53,184 MWh at the end of the first quarter 2023. Source: American Clean Power
Neighbor Plan, which was finalized on
March 15, " will limit the operation of coalfired
generators in 23 states, including Nevada,
Utah, and several states in the Gulf
Coast, mid-Atlantic, and Midwest. "
" Coal is more than five times as dependable
as wind and more than twice
as dependable as solar when electricity
demand is greatest, yet bad public
policy and EPA regulations are forcing
the closures of coal plants. Utilities have
already announced plans to retire more
than 40% of the remaining U.S. coal
fleet by 2030, possibly one reason that
NERC President Jim Robb has warned of
a disorderly and too quick retirement of
older generation, " Bloodworth said.
Supply Chain and Labor Issues
Continue
Among other findings in the assessment,
NERC warned that supply chain
constraints and low inventories could
pose summer reliability problems. " Supply
chain issues present maintenance
and summer preparedness challenges,
and are delaying some new resource additions, "
the report says. " Difficulties in
obtaining sufficient labor, material, and
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equipment as a result of broad economic
factors has affected preseason maintenance
of transmission and generation
facilities in North America. "
Additionally, low inventories of replacement
distribution transformers could slow
restoration
efforts
following hurricanes
and severe storms. " The electric industry
continues to face a shortage of distribution
transformers as a result of production
not keeping pace with demand, " the
report says.
However, Mike Edmonds, Chief Commercial
Officer at S&C Electric Co., said
that while supply constraints remain,
some areas are improving. He specifically
noted that electronics are now easier
to source. " We still see some challenges
for our customer projects. For example,
transformers still have a very long lead
time, and can take several years for full
delivery, as are castings, " he said.
Jim Thomson, vice chair with Deloitte
Consulting LLP and leader of the firm's
U.S. Power, Utilities & Renewables practice,
agreed that supply chain constraints
have improved with pandemic recovery,
but he said problems still continue to
affect the industry. " In addition to the
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POWER July 2023

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