Resources
Capacity
The interconnection added 15 GW of new generation capacity in 2023, mostly solar, wind, and battery storage resources.
Generation
Inverter-based Resources
Over the last five years, installed capacity of inverter-based resources (solar, wind, and battery storage) has increased by 37 GW, from approximately 44 GW in 2019, to over 81 GW in 2023. In 2023, these technologies accounted for 89% of the new, utility-scale generating capacity that became operational in the West.
Solar
At the end of 2023, 179 GW of solar was installed in the U.S., according to the Solar Energy Industries Association. By the end of 2023, there was almost 35 GW of solar in the Western Interconnection.
Retirements
Over the last decade, approximately 27.5 GW of resources were retired in the U.S. portion of the Western Interconnection. Coal and natural gas account for 24.6 GW of these retirements. Over the next decade, for the entire interconnection, these numbers will increase with the planned retirement of nearly 26 GW (mostly coal and natural gas resources) by 2034.
New Resources
Based on 2023 resource plans, entities in the Western Interconnection plan to build close to 172 GW of resources in the next 10 years. Solar, energy storage, and wind make up more than 85% of these new resources.
Resource Adequacy
Large demand increases and continued variability are the primary risks to resource adequacy over the next 10 years
WECC’s annual Western Assessment of Resource Adequacy revealed a new resource adequacy risk in 2023: rapid, large load increases due to the addition of data centers. The digitization of society and various economic sectors creates great demand for data centers, which consume large amounts of electricity. Load growth forecasts for the next decade almost doubled in this year’s assessment, from 9.6% in the 2022 study to 16.8% in the 2023 Western Assessment. Planning for and managing this kind of load growth will present challenges to the electric industry, as WECC’s assessment shows a yearly increase in the number of hours each year when there is a risk for load loss over the next decade. To continue to meet demand, entities plan to add 172 GW of generation resources to the system in the next ten years.
Variability remains a significant resource adequacy risk for the West. Increases in the variability of resources and load on the system are driving this risk. Compounding the issue is the high level of uncertainty about how changes like electrification, customer choice, and population migration will unfold. Extreme weather events, aggressive clean energy targets, and the resulting rapid evolution of the resource mix remain significant drivers of this risk.
Region will need new resources to remain resource adequate: NWPCC
The Northwest Power and Conservation Council’s Pacific Northwest Power Supply Adequacy Assessment for 2027 found that, for the Northwest region's power supply to be adequate in 2027, the region will need to develop new resources at least as aggressively as outlined in the 2021 Power Plan. Even with those resources, however, the report found that adequacy could be at risk if future electricity market supplies are significantly limited, new policies related to electrification accelerate demand growth, or major generation resources are retired earlier than planned without replacement. To remain resource adequate in 2027, the NWPCC 2021 Power Plan called for:
Western Resource Adequacy Program
The Federal Energy Regulatory Commission (FERC) approved the tariff for the Western Resource Adequacy Program (WRAP) in February 2023. WRAP formed its governing board in 2023 after working with stakeholders to secure members from across the country. By the end of 2023, 22 entities had committed to the program, covering about 70% of the Western Interconnection outside of California. WRAP tested operations through summer 2023 and had planned to begin binding operations in summer 2026. In April 2024, participants delayed the transition to binding operations until 2027.
California Resource Adequacy Program
In September 2023, the California Independent System Operator (CAISO) initiated a working group to collaborate on enhancements to the state's resource adequacy program to address the changing generation mix, variable supply and demand conditions, and changes to resource planning “frameworks” throughout the West. In late September, CAISO released a paper outlining a working group to create a resource adequacy action plan that will focus on policy development.
Utilities not Participating in a Resource Adequacy Program
Utilities that are not participating in a resource adequacy program will continue to make resource adequacy determinations as they have historically.
Legislators and regulators addressed resource adequacy concerns in 2023
California
The California Public Utilities Commission set new resource adequacy requirements, refined rules for its resource adequacy program.
Colorado
Colorado enacted legislation requiring the state’s load-serving entities to submit an annual report detailing its resource adequacy to its regulatory authority.
Idaho
In Idaho, the state’s Public Utilities Commission approved a proposal from Idaho Power, the state’s largest investor-owned utility, to defer costs tied to the utility’s participation in the Western Resource Adequacy Program (WRAP) into a regulatory asset account that may be recovered in the future if the utility can demonstrate realized benefits to its customers.
Montana
The Montana legislature created a committee on energy resource planning and acquisition to review statutes governing electricity supply planning and resource acquisition.
Nevada
Nevada enacted legislation revising the resource planning process for utilities.
New Mexico
The New Mexico Public Regulation Commission convened a workshop to hear from the state’s three investor-owned utility companies regarding resource adequacy.
Oregon
The Oregon Public Utility Commission (PUC) launched an investigation into resource adequacy in 2020. Over the last year, PUC staff, regulated entities, and stakeholders worked to develop a resource adequacy compliance program for certain entities and a requirement to more explicitly discuss resource adequacy strategies in IRPs and other planning documents. In September 2023, the PUC moved to open a formal rulemaking process to establish resource adequacy rules for regulated utilities.
Washington
The Washington Utilities and Transportation Commission and Department of Commerce held its third annual meeting on resource adequacy.
Energy storage adoption surges in California, expected to increase in Pacific Northwest and across the interconnection
In California, battery storage capacity has risen from about 500 MW to more than 10,000 MW since 2020, according to the CAISO.
While California has by far the most battery storage in the Western Interconnection, the Pacific Northwest Utilities Conference Committee’s 2023 Northwest Regional Forecast projects that utilities plan to add almost 7,000 MW of energy storage over the next 10 years—double the amount projected in the 2022 forecast. The Pacific Northwest currently has 79.4 MW of battery storage. Across the interconnection, resource plans for 2033 include energy storage at levels almost 8 times more (21 GW) than what was operational in 2022 (2.7 GW).
Battery storage can provide benefits, such as management of variability, congestion relief, ancillary services, and reduction of the use of peaking power plants or curtailment of renewable energy resources. However, there have been disturbances tied to battery storage facilities. A NERC–WECC report assesses two events from 2022 in which battery energy storage systems unexpectedly tripped offline. The report finds a need to:
- Assess ride-through performance during the interconnection process;
- Ensure the resources’ inverters are configured properly; and
- Ensure adequate data is available to thoroughly analyze abnormal performance.
Inverter-based Resources
Entities see the benefits and potential risks of wind, solar, and battery storage
Inverter-based resources (IBR) are increasingly driving grid transformation in the Western Interconnection. IBRs are linked to the electrical grid through an electronic power converter known as an inverter and include solar photovoltaics, wind turbines, and battery energy storage systems.
IBRs can provide essential reliability services to the bulk power system, but the rapid growth of IBRs presents significant risks to reliability if these resources are not integrated properly.
Solar facilities have tripped offline during grid disturbances in Utah, Texas, and California, leading to unexpected losses of generation. There were four such events in southern California in less than two months in summer 2021.
In March 2023, NERC issued a Level 2 alert that provided recommendations for Generator Owners of all IBR facilities connected to the bulk power system to improve the performance of their resources. The alert also required owners of BPS-connected solar photovoltaic facilities to provide site-specific information about their facilities. A report issued in November 2023 using the data collected through the alert found that about 5.2 GW of solar IBRs have voltage and frequency protection settings that put them at greater risk of going offline in a grid disturbance.
The disturbance in Utah occurred in April 2023, a few months after FERC issued a notice of proposed rulemaking to direct NERC to develop new reliability standards or modify existing standards to address reliability gaps related to IBRs. In October 2023, FERC issued Order 901 directing NERC to develop reliability standards for IBRs. The new standards will address reliability gaps related to data sharing, performance requirements, model validation, and planning and operational studies.
NERC has launched several projects related to this effort. In 2023, those efforts included soliciting comments on a proposal to enhance the reliability standard related to the timely reporting of events involving IBRs and a project addressing the performance of IBRs during grid disturbances. The current reliability standard uses size thresholds that are more suitable for synchronous generation; those that fall under the size threshold are not required to register their facilities and are not subject to rules related to their interconnection, data gathering, modeling, and performance—creating a potential reliability gap as a number of IBRs that have come online in recent years have been sized just beneath the standard.
As of 2021, the current standard excluded 16% of IBRs connected to the bulk power system—between 85 and 160 facilities in the Western Interconnection. The proposed new standard would lower the size threshold required for registration to include 98% of IBRs connected to the grid. The revised standard would also enhance requirements related to reporting disturbances, enabling quicker response to widespread IBR events and ultimately leading to improved performance through more detailed analysis and coordination. In early 2023, FERC approved a three-year work plan related to this proposal, and WECC is working at every level to address these issues. WECC’s primary goal now is to identify which facilities would fall under the revised criteria and to work with those generator operators and owners to ensure awareness of registration requirements.
Grid-forming inverter technology provides frequency response
As IBRs continue to increase across the Western Interconnection, technology related to grid control and dynamics has advanced. A promising advancement is grid-forming (GFM) inverter technology. GFM allows IBRs to immediately respond to changes in the bulk power system and maintain power system stability during challenging network conditions. GFM control allows IBRs to provide frequency response—to inject power rapidly when a disturbance causes changes in grid frequency. Studies have shown that GFM technology is much more effective at responding to a disturbance than grid-following technology. WECC’s 2023 Grid-Forming Inverter Study found that IBRs with GFM technology can provide a range of functions, including:
- Extremely fast power injection in response to frequency events
- Islanded operation capability absent synchronous generation
- Blackstart capability
- Operation in parallel with existing resources
Interconnection Queue
The nationwide interconnection queue grew more than 30% in 2023 and has increased eight-fold in the last decade, according to a Lawrence Berkeley National Laboratory study. At the end of the year, almost 2,600 GW was in the queue nationwide – more than twice the current U.S. generating capacity of 1,280 GW. solar, battery storage, and wind resources accounted for more than 95% of all resources in the queue at the end of 2023. The typical project built in 2022 took five years from interconnection request to commercial operations—up from three years in 2015, and less than two years in 2008.
The interconnection queue issue is the focus of multiple regulatory agencies, including FERC. In July 2023, FERC issued Order No. 2023, which expedites the process for connecting new generating facilities to the bulk power system. The order, which took effect in November 2023, is aimed at alleviating the backlog of projects in interconnection queues, providing greater certainty, and preventing discrimination against new generation. In 2023, several entities in the West adjusted their procedures for managing interconnection requests.
Arizona Public Service Company
Arizona Public Service Company filed a proposal to expedite the interconnection process with FERC in March 2023. The proposal calls for an independent coordinator to process generation replacement requests outside of the standard interconnection queue. Critics of these plans say they give an advantage to the current owners of these generation facilities and run contrary to FERC’s longstanding open-access principles.
Bonneville Power Administration
In late 2022, Bonneville Power Administration (BPA) announced tariff proceedings for generation connection reform, proposing to shift from a first-come, first-served approach to a first-ready, first-served cluster method. This would allow BPA to group geographically or physically similar projects and accelerate the interconnection process. It would prioritize projects that have demonstrated commercial readiness and allow projects to proceed through the interconnection process in batches rather than individually. The proposal aims to alleviate the 113 GW of generation in the BPA interconnection queue.
CAISO
CAISO adopted a cluster study process years ago, but recently the number of interconnection requests increased to “unsustainable levels.” In April 2023, one cluster contained 541 interconnection requests totaling 354 GW, seven times CAISO’s peak demand. Before 2021, the average number of requests was 113 each year. CAISO’s 2023 Interconnection Process Enhancements Initiative is intended to help enhance the process for studying and approving requests and developing tools to efficiently manage the queue.
PacifiCorp
FERC approved PacifiCorp’s proposal to expedite the interconnection process in January 2023. PacifiCorp’s plan allows power plant owners to replace retiring generation without going through the company’s clustered interconnection process.
Public Service Company of Colorado
Public Service Company of Colorado (PSCO) reformed its interconnection procedures in 2019 to consider requests in clusters while requiring demonstrations of a project’s readiness throughout the process. In June 2023, FERC approved PSCO’s revised rules to streamline interconnection by limiting the number of speculative or unready projects in the queue.
Supply Chain
Supply chain issues continue to vex utilities
Supply chain constraints affected utilities throughout the Western Interconnection in 2023. They hindered some utilities’ ability to connect new customers; build new generation and infrastructure; replace transformers, cables, conductors, and other equipment; and increasingly made it more difficult to schedule maintenance because utilities do not know when new materials will be available. Given the large amount of planned generation over the next 10 years, supply chain issues pose a resource adequacy risk.
Supply chain issues caused delays for Public Service Company of New Mexico
At Public Service Company of New Mexico (PNM), supply chain issues have caused the delay of seven projects scheduled to come online over the last two years, totaling 1,000 MW of solar and approximately 600 MW of storage. Three of the projects have been canceled because developers backed out due to rising prices for material related to supply chain disruptions. The other four projects have been delayed a year.
PNM is New Mexico's largest electricity provider with nearly 550,000 customers. In response to the project cancellations and delays, the company has been forced to pursue alternatives to meet its customers' demand, all while setting a new peak demand record in 2022 and again in 2023. PNM has entered into more than a dozen short-term contracts on the wholesale market, extended operations of a unit at the coal-fired San Juan Generating Station during summer 2022 and worked with developers to ensure testing of projects approaching completion also operated to meet customer needs prior to final commercial operation. "We're setting records at the same time we're covering shortfalls. We have had to be flexible and nimble," Nicholas Phillips, PNM's Director of Integrated Resource Planning said.
Maintenance at the utility has also been affected; for certain higher-voltage breakers and transformers, the lead time is over two years. "We have to be very strategic," Phillips said. "It creates a very, very complex environment. We have to put down money today for something we're not going to get for two years."
Phillips expects the supply chain issues to persist for another four to five years. In the meantime, he suspects that smaller companies could struggle to remain competitive, while larger companies with purchasing power manage to survive by trading equipment among multiple projects. Should that occur, the industry could see an increase in prices.
"We do anticipate it putting a dampening effect on the number and competitiveness of available projects over the next couple of years. However, PNM does not see this shorter-term disruption impacting the ultimate achievement of a carbon-free grid."
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