In its Long-Term Reliability Assessment released March 5, SERC Reliability said active collaboration with registered entities and other stakeholders still is needed to maintain reliability in the face of growing challenges over the next 10 years.

SERC’s LTRA covers the years 2023-2033; the regional entity described it as a “complement” to NERC’s LTRA, released last December, while also reflecting “updates within the SERC region since the release of the NERC report.” (See NERC: Growing Demand, Shifting Supply Mix Add to Reliability Risks.) The report’s conclusions were based on data gathered from SERC’s registered entities and independently verified by the RE.

NERC’s LTRA identified the SERC-Central subregion, which comprises Tennessee and parts of nine other states, as one of two high-risk areas along with MISO — meaning they are more likely to have insufficient supplies to meet demand at some point in the next decade. The SERC report confirms this assessment, noting that demand is projected to “increase faster than the transitioning resource mix grows.” 

Data Centers Driving Load Growth

But SERC-Central is not the only subregion where growing demand is an issue. 

The RE said load for its region is expected to rise at a compound annual growth rate of 1.2% over the next 10 years, significantly higher than the 0.6% CAGR in last year’s LTRA. (See SERC LTRA Notes Challenges from IBRs, DERs.) 

As with last year, the highest growth is projected in SERC’s PJM subregion — comprising parts of North Carolina, Virginia and Kentucky — which the RE attributed to “growing data center load” driving demand to a CAGR of over 5%, more than double the 2.2% CAGR in last year’s report. Businesses’ interest in artificial intelligence and large language models, along with ongoing activity in the cryptocurrency space, are significant contributors to the rise in data center demand. 

The LTRA also noted that while SERC is “traditionally … a summer-peaking region,” several subregions are projecting “similar peak demand for both summer and winter months” because of the adoption of electric heating systems over the next decade. Increased use of distributed energy resources like solar panels may help to reduce summer demand growth compared to winter because of increased sunlight in summer. 

However, SERC warned that behind-the-meter DERs also complicate the task of load forecasting because grid operators lack visibility into these resources. Electric vehicle charging, home battery systems and state electrification programs also add complexity, the RE said. 

Solar, Gas to Replace Coal

The projected load growth load will be happening while major shifts in the grid’s resource mix continue.  

SERC said that more than 12% of the active coal generation fleet will retire by 2033, with future energy needs met by nuclear, natural gas and solar resources. 

Overall internal capacity for the SERC region at the hour of peak demand is expected to grow from 309.6 GW in 2023 to 324.4 GW in 2033 for summer months, and from 323.1 GW to 327.2 GW for winter months. Solar resources are projected to grow the most for the summer, both in absolute and relative terms, with almost 9.8 GW added, a 67% increase. Solar’s winter share will grow by 1.8 GW, a 25% increase from 2023. 

The second-largest projected absolute increase is in natural gas, for which summer capacity is predicted to rise by 9.3 GW, 6% higher than in 2023; winter capacity will rise by 4.3 GW, or 4%. This means gas will remain by far the largest resource in SERC’s footprint, accounting for over half of generation over the assessment period. 

SERC observed that the variability of resources being added — including wind and battery systems as well as solar facilities — means that “system planning and operations must focus beyond the peak load hour.” For example, solar generation may be sufficient to meet peak load, but as available sunlight decreases, solar output may be insufficient later in the afternoon when electric demand for air conditioning still is high. 

In addition, the possibility of extreme weather throughout the year creates unique vulnerabilities in the region. With natural gas accounting for such a high percentage of generation, utilities must be prepared for disruptions to the gas supply. Operators also will need to reduce the vulnerability of their systems to extreme temperatures. 

SERC recommended stakeholders perform sensitivity studies to determine new technologies’ influence on the grid, with regulators and policymakers using “their full suite of tools to manage the pace of retirements and ensure that replacement infrastructure can be timely developed and placed in service.” 

For its part, the RE promised to continue studying the impact of extreme weather events such as prolonged cold or hot temperatures, wetter winters and drier summers. It urged reliability coordinators and balancing authorities to focus on “communication and coordination activities” for an effective response to the developing risks to grid reliability.