June 21, 2018 is the start of summer. We can expect “famously hot” (as a Columbia slogan says) weather across the Carolinas.  WIST-TV, Columbia, even said, “Dangerous heat moves into the Midlands.” WTVD-TV, Raleigh/Durham: “The first heat wave of the season is on the way.”

That brings up an important concept for the electric industry and customers: Reserve margin. In simplest terms, reserve margin is how much extra power a system can make or transmit than it may usually need.  Reserve margin and reserve capacity are synonymous. For a producer of energy, it is the capacity of a producer to generate more energy than the system normally requires. For a transmission company, it is the capacity of the transmission infrastructure to handle additional energy if demand levels go above expected peak levels. (Information source – Energy Vortex)

For instance, a reserve margin of 15% means that an electric system has excess capacity in the amount of 15% of expected peak demand. Regulatory agencies often ask producers and transmission facilities to have a constant reserve margin of 10-20% of normal capacity. Think of it as a buffer; like an insurance policy against breakdowns in sections of the system, or a during sudden increase in energy demand (like during an exceptionally hot day).

TV station WSOC in Charlotte has already reported, Duke Energy monitoring systems as heat wave continues: “They [Duke] said anytime mechanical equipment is exposed to stress, there is a chance something can break. They’re asking customers to protect the power grid by conserving energy.”

Why be concerned about this now in the U.S.? Because the electric grid is changing. The industry has shut down some long-time dependable coal plants, and it has shut-down, or plans to shut-down, nuclear plants that produce a lot of power. The industry is adding more solar and natural gas.

With these changes, do we still, as a nation and within each region, have enough power to keep us cool in the summer and keep all our other electric needs satisfied? Here’s one headline, just as an example: Will Texans get burned? Forecast says a hotter summer and less available electricity. Several news stories report that Texas may have enough heat that creates electric demand beyond its capacity.

The energy industry keeps close watch on expected demand and its capacity to produce and distribute electricity. Here’s the challenge as laid out by the North American Electric Reliability Corporation (NERC), which oversees and regulates the reliability of the North American electrical grids, and note that South Carolina gets a mention. This is a national analysis:

The rapid shift from coal and nuclear generation to more intermittent renewables and natural gas is creating new challenges for the North American electric grid, including declining resource adequacy as soon as next year in at least one region. 

“The accelerating move toward natural gas and renewables means the industry must adopt a more robust approach to planning the bulk power system so that it continues to be reliably operated,” said John Moura, NERC’s director of reliability assessment and system analysis. 

Retirements of conventional generation in Texas and a canceled nuclear expansion South Carolina mean that reserve margins will drop below targets beginning in 2018 and 2020, respectively, NERC said. Otherwise, reserve margins are adequate until 2022.

Coal and nuclear retirements have outpaced conventional generation additions, NERC’s review concluded. Retirement plans have been announced for 14 nuclear units, totaling 10.5 GW. Gas-fired capacity is expanding rapidly to meet the demand. According to the report, gas-fired capacity increased to 442 GW this year, from 280 GW in 2009. And there is almost 45 GW of additional gas capacity planned over the next 10 years.

The Federal Regulatory Energy Commission underlines the gas statement: “Nationwide, this may be a record summer for natural gas demand for electric generation. EIA [Energy Information Agency] forecasts that natural gas production will climb to near highs.” (Note: See the Energy Consumers of the Carolinas’ earlier blog about natural gas.)

What should consumers do? Just because we do not anticipate any big power problems this year in the Carolinas doesn’t mean to let down our guard. It’s possible to have a hot spell to the point that customers are asked to conserve energy – let it get a bit warmer in the house, don’t use appliances that are not essential. Then, small changes that each of us make accumulate into large impacts for the grid. We all help each other.