Increased Risk of Power Supply Shortfalls in the U.S.

NEW YORK (Reuters) – About half of the United States faces an increased risk of power supply shortfalls in the next decade, potentially leading to outages and electricity conservation measures, according to the North American Electric Reliability Corporation (NERC) report released on Tuesday.

With rising U.S. power consumption due to AI data centers and the electrification of buildings and transportation, electricity generation efforts have not kept pace, resulting in a growing supply-demand imbalance, as highlighted in NERC's annual Long-Term Reliability Assessment.

John Moura, director of NERC's Reliability Assessment and Performance Analysis, stated, "We are seeing demand growth like we haven't seen in decades. Our infrastructure is not being built fast enough to keep up with the rising demand."

The Midcontinent Independent System Operator, which manages the electrical grid for 15 states, is identified as being at high risk of shortfalls, even during normal peak demand periods. Other grid operators facing elevated risks include PJM Interconnection, ISO New England, as well as operators in Texas and California. In contrast, regions in the northwest, northeast, southeast, and midwest are better positioned to maintain long-term electricity supply.

Accelerating electricity demand, combined with planned retirements of fossil-fired power plants, may exacerbate the risk of shortfalls as these plants could go offline before new sources of supply become operational. NERC's findings indicate 78 gigawatts of confirmed generator retirements and an additional 37 gigawatts with announced retirement plans through 2034, where one gigawatt can supply power to up to one million U.S. homes.

NERC is a nonprofit regulator in North America that focuses on developing industry standards, assessments, and forecasts for the reliability and security of the electric grid.