Dodging a bullet the hard way

Warren B. Causey | Oct 30, 2009


It has been a busy week or so, with the DOE releasing ARRA “smart grid” awards on last Tuesday and then on Thursday the North American Electric Reliability Council (NERC) released its annual Long-term Reliability Assessment (LTRA) for 2009-2018.  NERC has been required by law to calculate an annual assessment since the 2005 Energy Policy Act.


For the first couple of years, the LTRA was very scary reading, showing a precipitous increase in electric demand nationwide and in Canada over 10 years, with some portions of the eight regions into which NERC divides the U.S. and Canada being unable to meet peak demand as early as this year, 2010 and 2011.  However, that picture has changed somewhat dramatically.


The reasons for the changes are somewhat dubious, however.  The first is that the worst recession since the Great Depression has reduced demand across many parts of the country.  Some individual large utilities have reported declines in peak demand of as much as 4% to 6% over the last 12 months.  NERC credits this decline not only to the recession closing many businesses and reducing overall demand, but also to more widespread use of demand-side management, saying up to 20% of the decline can be credited to demand response.  NERC puts it this way:


“Reduced economic activity and higher adoption of Demand-Side Management programs have led to decreased projected peak demand for electricity and, as a result, higher reserve margins throughout North America for much of the ten-year period.”


As a result, the point at which peak demand outstrips base-load supply has been pushed back as many as five years.  Despite this, NERC still says, “Two Regions are expected to fall below target reserve margins in the first five-year period –Western Canada (2012) and the Midwestern United States (2012).”


What this means is that the recession has pushed back the deadline on when the U.S. and Canada will begin to face shortages of peak-load generation.  A deep recession, millions of people being laid off from jobs, and plants and factories closing is an unpleasant way to extend the deadline for solving the impending energy supply shortage.  But at this point, with political entities still beating the Global Warming scare and Congress likely to impose cap and trade, any news on the supply side is good news for utilities and consumers.  The relief may be only temporary, but it is relief.


However, if and when the economy returns more to normal—not a given considering massive federal deficits and likely much higher taxes and electric bills—the electrical supply problem still will be there and only more aggravated by an environmental movement gone amok and shutting down base-load generation in favor of intermittent and unreliable “green” power.


It's only one bullet dodged for now, but, hey, with all the other bad news around, it's something!

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