It really depends on what data you look at…

One of the areas that The Fusion Report has consistently examined is the reliability of the U.S. power grid, especially in the future. This concern is driven by four key factors:

1. Contrary to expectations of the Department of Energy (DoE), utility executives, Independent System Operators (ISOs), and industry pundits (even as recently as a few years ago), the demand for electricity in the U.S. is going to increase significantly over the next 5-10 years, largely driven by datacenter expansion.
   
   
2. A large percentage of U.S. generation capacity will be retired in the next 5-10 years. The plans to replace these plants, largely with renewable resources such as solar and wind, are problematic because these energy resources are not dispatchable, at least not without significant investment in energy storage.
3. Despite the positioning and/or hope of those on the political right, climate change is happening, and its negative impacts are becoming more pronounced. Moreover, cuts to agencies such as NASA, NOAA, FEMA, and others (add another 4-letter agency) are making these negative impacts harder to forecast. Whether power outages, wildfires, flooding, or other disasters, things are going to continue to get worse.
4. The U.S. grid infrastructure, particularly the transmission and distribution (T&D) infrastructure, is old and aging. Furthermore, this infrastructure has not been expanded significantly in a number of decades, especially not in line with the expected demand for electricity.

And as a background to these trends, most of the equipment used on the U.S. power grid today is built outside of the U.S., a huge change from as recent as the 1970s (large high-voltage transformers are just one example of this). As with most things in life, you don’t get to solve all problems at the same time – you have to pick and choose which ones you wish to prioritize.

Trump DoE Administration Report on U.S. Grid Reliability

Those choices are embodied in the recent Trump administration federal budget, as well as in a report that the DoE just released on U.S. grid reliability and security. The foundation of this report is the mismatch between U.S. electrical demand and production, and the resultant annual Loss of Load Hours (LOLH) projected by ISO (the 2030 LOLH data for each ISO is shown below). 

The argument here, which essentially defines “grid reliability” as the likelihood of partial or total grid failure due to a lack of generation resources to match electrical demand, concludes that:

• Allowing currently planned plant retirements to occur without accelerated replacement of these plants’ capacity will result in up to 100X the power outages currently experienced in the U.S..
• Renewable energy resources, in particular solar and wind, are not adequate to provide reliable baseline electricity due to their non-dispatchability.
• The results to date have been several DoE emergency 202(c) orders, either to keep existing plants functioning or to add additional generation units to maintain electricity reliability.

This is essentially the conclusion that our Ignition Research “energy gap” report came to roughly a year ago, where we predicted a growing gap between electricity generation and demand (primarily driven by demand from data centers).

The Missing Pieces to This Equation

From our perspective, this report has a couple of basic flaws: it doesn’t consider the (positive) impact of using energy storage resources with renewables; and more importantly it does not take into account the impact of grid subsystem failures on the overall reliability of the grid. We will treat each of these below:

• Battery Storage Plus Solar Power Equals Baseline Electricity: Regardless of whether you believe in climate change or not, the combination of solar power and battery-based storage is one of the most quickly deployed energy resources available to us today. Utility-scale solar power farms can be deployed in as little as eighteen months. In a world where we need all of the energy we can get, cutting out the easiest-deployed source of grid-scale electricity seems a little short-sighted just because it doesn’t meet your “industrial leanings”.
• Grid Equipment is Just as Much of a Reliability Danger as Lack of Generation: What is the value of having more power plants if you cannot get that power to where it is needed? Today, over 70% of U.S. transmission lines are approaching the end of their typical lifecycle, and other grid components (transformers, substations, etc.) are not much better (large transformers average over 40 years old). Making things worse, the bulk of these grid components are made today outside of the U.S., and the lead times for these components have only gotten worse, with some of them having five year lead times. Failure of one of these components can result in a more significant outage than unavailability of power.

Conclusion: Execution is What Matters

While we do not differ with many of the points brought up in the DoE report, it feels in many ways like an attempt to justify de-investing in renewable power generation. There are no details on how any of these plans will come to fruition, other than through executive orders to prevent shuttering existing power plants. While we would like to say that fusion energy is the answer to this issue, it is unlikely to have a meaningful impact in time, and it still doesn’t answer the actual issue of grid equipment unreliability.

To actually improve grid reliability will require more than stopping the retirement of existing power plants, “drill baby drill”, or political answers to real problems. We need a real comprehensive plan to actually achieve the goals of improving U.S. grid reliability, and the budget and people (especially in the DoE) to ensure that it is executed in conjunction with industry, state, and local partners. Only then is it likely that we can really solve the grid reliability issues facing the U.S. over the next 5-10 years.