In November 2012, the North American Electric Reliability Corporation (NERC) estimated that the US would have 966 GW of electric supply capacity available for the summer of 2013. NERC is the electric reliability organization certified by the Federal Energy Regulatory Commission to establish and enforce reliability standards for three major electrical interconnections serving the United States.
NERC estimated that about 786 GW would be needed to meet projected peak electricity demand and determined that another 117 GW should be available in case of supply outages or extreme weather (known as target reserve supply) in summer 2013.
The current level of above-target capacity varies by region: some areas have significant excess capacity and others are more constrained, according to EIA.
ERCOT, the region that makes up most of Texas, is of particular concern and is projected to be below target capacity for the summer of 2013 forward. Because of the layout of the electric transmission grid, excess resources in one region cannot necessarily be used to make up for a deficit in another region, EIA says.
The electricity industry has reserve capacity on hand to maintain reliability. Because large-scale electricity storage is not currently economic, electric systems must have sufficient supply resources available to meet electricity demand and replace unexpected losses of supply.
Each NERC region has a reserve margin target — the amount of supply capacity over and above a region’s expected hourly peak demand for the year needed for reliability. The NERC regions’ reserve margin targets typically range from 14-17 percent and together total 117 GW of supply capacity.
Reasons why total electric supply capacity may exceed NERC’s target include:
- Changes in demand growth.
- Time lags in investment.
- Past trends in capacity builds.
According to EIA, some of the current above-target supply is also the result of a building spurt for natural gas capacity between 1999 and 2003.