NERC reliability assessment anticipates 2.5% spike in peak winter power demand

The North American Electric Reliability Corp. anticipates total peak demand for the bulk power system it oversees to increase by 20.2 GW for the upcoming winter generating season. This would amount to more than double NERC's projected level of new peak capacity additions.

The 2.5% jump in expected peak demand represents a sharp increase compared to NERC's last several winter assessments, which have projected year-over-year peak demand growth of roughly 1%.

NERC's 2025-2026 Winter Reliability Assessment, released Nov. 18, found that all regions are expected to maintain resource adequacy during normal peak operating conditions. However, the Western Electricity Coordinating Council (WECC) Northwest and Basin subregions, as well as the Electric Reliability Council of Texas Inc., parts of the US Southeast, US Northeast, and the Canadian Maritime provinces were all found to be at elevated risk of supply shortfalls during extreme weather scenarios.

"Rising demand is leading to diminished reserves in most areas, and also, the resource mix as it changes, is becoming more complex," Mark Olson, manager of NERC's reliability assessments, told reporters during a media briefing. "Some of these resources are more challenged in winter, and the operators then have more challenges in in how they're able to balance that electricity demand with the supplies."

Demand response surging

In its latest winter assessment, NERC found a steep decline of more than 14 GW in wind capacity expected to be available during peak demand hours. Olson noted that the drop-off is the result of new capacity valuation methodologies recently implemented by large regional grid operators such as the 15-state Midcontinent ISO and ERCOT.

"This more accurately reflects what wind is likely to do at peak demand hours based on probabilistic analysis and additional historical data," Olson said.

Battery storage resources led all generator type additions with just over 11 GW in expected peak demand capacity value, followed by thermal and hydropower resources with nearly 3.3 GW.

Solar additions, while totaling 11 GW in nameplate capacity, were only expected to contribute roughly 1.2 GW in peak demand capacity value. "Those resources are less effective in meeting winter demand than they are in summer and at the hours of expected peak demand in all of the assessment areas," Olson explained.

New demand response resources, meanwhile, far surpassed traditional generation resources in terms of net peak capacity additions with about 8.1 GW.

Olson welcomed the battery and demand response additions while noting that both resource types can be challenging to deploy during long-duration, wide-area extreme cold events. Batteries must maintain sufficient states of charge for dispatch and contracted demand response resources have limits on when they can be deployed, he said.

"All of these are factors that the operators can find more challenging in deploying resources to meet demand levels that they encounter during the winter," Olson said.

Western subregions growing

The WECC's Rocky Mountain subregion ranked first among all NERC assessment areas with a 10% expected increase in peak winter demand, with datacenter development and commercial and industrial demand identified as primary drivers.

However, NERC found that the subregion is expected to maintain sufficient reserve margins without relying on imports under all winter scenarios. Planned Tier 1 generation resources, which are considered reasonably close to commercial operation, are up over 84% in the Rocky Mountain area since NERC conducted its last assessment, the organization noted.

Meanwhile, a decline in planned Tier 1 resources in the WECC's Basin region — comprising Utah, southern Idaho and part of western Wyoming — does not appear to have been offset by an increase in newly operable units, NERC found. The Basin region could experience a 1 GW supply shortage assuming an extreme number of generator derates and outages, triggering the need to rely on imports, NERC said.

The WECC's Northwest Region is projected to experience a 9.3% demand increase driven by datacenter operations, residential and transportation electrification, and semiconductor manufacturing. Although year-over-year wind and solar capacity additions in the Northwest are up 26% and 134%, respectively, the region could be forced to rely on imports under extreme scenarios, NERC found.

ERCOT, Southeast at risk

The ERCOT region, which is also experiencing significant load growth, is projected to maintain a 36% reserve margin in meeting 68.1 GW of expected peak demand under normal conditions. NERC noted that the grid operator's latest risk assessment indicated a 2% chance of needing to call on customers to conserve power during its forecast peak demand day in January and a controlled load-shed probability of 1.8%.

NERC's assessment deemed the central and eastern subregions of the Southeast Reliability Corp. at elevated risk of energy emergencies due to severe weather events. Both subregions are expected to maintain 15% peak demand reserve margins under typical winter operating conditions.

Nevertheless, NERC noted that one SERC-Central entity raised its planning reserve margin target to 26% and updated its preparedness plans to align with lessons learned from a severe wide-area winter storm in December 2022. Mandatory load-shedding could cover up to 30% of the SERC-East system under extreme scenarios, NERC said.

Fuel at issue in Northeast, Maritimes

NERC also flagged long-standing concerns about fuel availability in the ISO New England region during prolonged cold snaps, although it is expected to maintain resource adequacy under normal operating conditions.

NERC's Maritime assessment area was also found to be at elevated risk of generation shortfalls even under normal peak-demand scenarios. The small system covers the Canadian provinces of New Brunswick, Nova Scotia, and Prince Edward Island, as well as the northernmost portion of Maine

The region has traditionally mitigated that risk with long-term contracts with its neighbors for extra supplies during different time frames, Olson said.

"There are conditions — winter storms more extreme than normal — that can leave the Maritimes looking for answers from their neighbors," Olson said. "Based on this wide-area assessment, there are periods where they may not be able to find them, and that's what leads to the elevated risk we show."