Security of power supply is the key task of any grid operator such as NERC, a nonprofit corporation that oversees regional electric reliability entities in the lower 48 United States, Canada, and parts of Mexico.
Reserve margins specify the percentage by which expected generating capacity exceeds net internal demand (total demand .minus demand-response systems) during a peak demand hour. Reference margins differ by regions and are basically reserve margin targets based on each area's load, generation capacity, and transmission characteristics.
Supply squeeze in ISO-New England
The general aim is to have reserve margins surpass the reference margins, which are set near 15% in most regions. All U.S. regions in NERC’s assessment meet this goal – except for the Independent System Operator for New England (ISO-NE) where anticipated reserve margin is just 14.9%.
ISO-NE is expected to have 29,984 MW of resources available this summer, based on existing capacity and net electricity imports from other areas. Another 315 MW of prospective generating capacity is anticipated to become available this summer, but these ones are not included into NERC’s calculations. Including these resources brings ISO-NE’s prospective reserve margin to 16.1%.
Highest reserve margins are seen in in the New York Independent System Operator (NYISO) and PJM Interconnection, where reserve margins exceed 28%. According to the IEA, this indicates that the two regions may have excess underused or unused generation capacity.
Demand response props up margins
Targeted reduction of electricity use through demand response mechanisms plays a vital role in ensuring grid stability and reliability of power supply. Hereby, customers are offered discounted contracts that allow the grid operator to temporarily turn off some air-conditioning equipment or industrial processes as demand response to help regulate peak demand.
Based on NERC data, demand response resources range from 6% internal demand - in areas such as PJM Interconnection and Florida Reliability Coordinating Council – down to just 1% in ISO New England.
More information about regional summer reliability issues can be found in NERC’s 2017 Summer Reliability Assessment.