Keeping the Lights On: A Broader View of Resource Adequacy

Contributed by RNW Staff

Recent winter cold snaps and summer heat domes bring an increasingly familiar worry: will the grid hold? As extreme weather events become more frequent and severe, the Pacific Northwest is facing heightened risk of power outages from downed or de-energized lines and damaged equipment (i.e. reliability events). At the same time, recent studies project that the region could face a supply shortfall before 2030, indicating that there may not be enough generation to meet demand under all conditions (i.e. resource adequacy events). Together, extreme weather, growing demand, and a changing resource mix are placing greater stress on the system, which has prompted a robust discussion among policymakers about how best to ensure reliability while maintaining affordability.

To level set, resource adequacy and reliability have distinct definitions but are often used interchangeably. Resource adequacy is a planning construct designed to ensure that we have enough power generation to meet demand under all conditions. Reliability is the ability of grid operators to “keep the lights on” every moment of the day in real-time operations. A utility can meet its resource adequacy requirements but fail to maintain reliable service if fire or ice brings down a major transmission line, or if a rare multi-day weather event impacts the entire region. Both are important factors utilities must balance to keep the lights on, but they are managed in very different ways. 

Lately, there have been several studies, blog posts, and increased media coverage of a looming challenge to the region’s resource adequacy. Most recently a group of utilities commissioned a study by E3 to evaluate the region’s electricity demand and highlight resource adequacy challenges. In response, Sylvan Energy Analytics and GridLab published a report digging into details of the modeling and assumptions made in the E3 study. Both reports agree there is a need for new dispatchable generation. This is undisputed. However, what is still not agreed upon is how we meet near-term resource adequacy needs until this new dispatchable generation and supporting infrastructure comes on line. As these conversations continue, RNW sees this moment as an opportunity to broaden the discussion around resource adequacy and underscore that new dispatchable resources are not the only solution.

Last year, RNW wrote broadly about the value of an “all of the above energy strategy” during this time of rapid load growth. Clearly, we need to bring more resources online, and at a quicker pace, to fill the gap. Here, we write more specifically about how renewable generation, transmission and markets can support resource adequacy, and an affordable, increasingly clean electric grid in the Pacific Northwest. 

Transitioning to an electric grid largely powered by renewables and storage requires a new planning paradigm. Unlike traditional generation, renewable resources aren’t always available. This doesn’t mean resource adequacy isn’t possible with an increasingly renewable generation focused grid; it means we need to plan and operate our system differently. The good news is that required tools and principles exist, which we lay out below.

1. Lean into resource diversity

Every generation resource has characteristics that have to be managed to provide reliable service. As an example, nuclear power has very low outage rates, but each traditional nuclear plant is extremely large, so planning for potential outages requires considering how to handle losing a lot of power at once. Similar challenges exist for all generation types, whether it is related to the availability of fuel, how a plant operates under certain weather conditions, or how quickly it can begin generating electricity. A diverse set of resources provides a complementary web of resource availability and supports reliability. RNW believes the region should explicitly seek geographic and technological diversity of generation resources, always pursuing the cleanest, least cost options, without threatening resource adequacy.

2. Unlock regional energy markets

Increasing diversity of resources does not have to be the sole responsibility of one utility or entity. Regional wholesale energy markets let utilities with excess resources sell to those in a deficit, efficiently supporting increased resource adequacy. When resources span multiple climates and time zones, a lull in generation or a spike in demand in one area can be balanced by other areas. This is why planners often say “we need a grid bigger than a weather system.” Similar to resource diversity, geographic diversity of resources and markets that allow efficient resource allocation is a powerful tool for making the grid more reliable. 

3. Expand Transmission Capacity

None of this works without modern transmission and sufficient transmission capacity. This is true regardless of the generation mix. Our region has not built significant new transmission lines for decades and the amount of building ahead of us is staggering. But, let’s be clear on this point – even if we build a diverse generation mix and expand our energy markets, without new transmission, we have not solved our resource adequacy issues. Transmission capacity is fundamental.

4. Value the demand-side 

Demand-side resources play an essential and important part in maintaining a reliable and affordable grid. These resources include energy efficiency, demand response, on-site electricity generation and storage (like residential solar systems), virtual power plants, and others. RNW does not work to promote demand-side resources; we’re focused on supporting new, large-scale renewable generation. But, any comprehensive approach to improving resource adequacy should include the demand side of the equation.  

Planning for adequate resources, and ultimately ensuring a reliable electric grid is paramount. The Pacific Northwest is fortunate to have a tremendous hydro resource and abundant wind and solar; this combination of resources combined with the strategies described above will allow the region to ensure resource adequacy today, and in the years ahead.