Welcome to Grid Brief! Here’s what we’re looking at today: NY-ISH and MISO face potential shortfalls in the coming years, the EIA reports more renewables means more curtailments in Texas, the sweet spot for new American LNG projects begins to sour, and more.

Fragile Forecasts For NY and MISO

The New York Independent System Operator and the Midcontinent Independent System Operator face reliability and capacity problems as soon as 2025, according to new reports from both organizations.

NY-ISO found in its most recent short-term reliability assessment that New York City will be in trouble starting summer of 2025. The city will struggle with reliability due to peak demand and a loss of available resources because of the “Peaker Rule,” a 2019 environmental regulation that limits nitrogen oxides emissions from simple-cycle combustion turbines.

“Combustion turbines known as ‘peakers’ typically operate to maintain bulk power system reliability during the most stressful operating conditions, such as periods of peak electricity demand. As of May 1, 2023, 1,027 MW of affected peakers have deactivated or limited their operation,” NY-ISO explains. “An additional 590 MW of peakers are expected to become unavailable beginning May 1, 2025, all of which are in New York City. With the additional peakers unavailable, the bulk power transmission system will not be able to securely and reliably serve the forecasted demand in New York City (Zone J).”

“Specifically, the New York City zone is deficient by as much as 446 MW for a duration of nine hours on the peak day during expected weather conditions when accounting for forecasted economic growth and policy-driven increases in demand,” the grid operator added.

New York closed down the profitable Indian Point nuclear power plant and replaced it with natural gas in 2021, leaving NYC more reliant on a single energy type for power.

As for MISO, its most recent OMS-MISO Survey Results reveals that unless urgent action is taken, shortages are inbound, beginning in 2025 with 2.1-GW. That could be followed by “a 3.4-GW deficit by the 2026/27 planning year, a 4.8-GW gap in the 2027/28 planning year and a 9.5-GW shortfall by the 2028/29 planning year,” reports RTO Insider.

Generally, MISO’s problems have been confined to its upper region (the Midwestern states), but now fragility appears on the horizon for its South subregion. The problem is no longer sub-regional, but system-wide. MISO also relies on imports from PJM, though PJM released a report warning of its own shrinking capacity margins earlier this year.

Texas: More Renewables, More Curtailments

According to new modeling by the Energy Information Administration, without added transmission infrastructure, Texas’s growing share of renewables will trigger more power curtailments in the future.

That’s hard news for a state that expects to see its share of renewables double by 2035.

“In 2022, the Electric Reliability Council of Texas (ERCOT), the grid manager for most of Texas, curtailed 5% of its total available wind generation and 9% of total available utility-scale solar generation,” reports the EIA. “By 2035, however, we project wind curtailments in ERCOT could increase to 13% of total available wind generation, and solar curtailments could reach 19%.”

The EIA assumed no transmission additions to ERCOT. By 2035, days with high power demand and high wind and solar output account for 36% of projected curtailments.

“Without expanding ERCOT’s electrical transmission network and storage capacity, congestion and curtailments will rise,” the EIA said.

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US LNG Export Sweet Spot Sours

The tidal wave of US LNG export investments has crested.

“More than 36 million tons a year of new export capacity has been approved for construction so far this year, the highest ever for the country, according to Bloomberg calculations,” reports Bloomberg. “The latest project — NextDecade Corp.’s $18.4 billion facility in Texas — agreed to move forward earlier this week.”

But opportunity for such projects has started to shrink. The US exploded with LNG export capacity deals in the wake of the Ukraine war, but global competition has started to gain ground on America. Qatar, for example, is sprinting to compete for LNG contracts across the globe, not just in Europe.

Speaking of Europe, the continent wants to go greener, making them (for now) less keen on fossil deals of any kind. Though, as 2021 revealed, necessity and real world events may carry the day for the super-chilled fuel yet again.

Domestic snags have also complicated the situation in America. The Department of Energy has put the kaibosh on export license extension unless projects have begun construction.

Regardless, the US is in a solid position to be a top-tier global LNG supplier for decades to come. Those that get in while the getting is good will make out handsomely. But their window to do so is shrinking.

Conversation Starters

• General Electric is working with Japan on offshore wind. “Japan's Toshiba plans to establish a domestic supply chain for offshore wind power equipment together with U.S. manufacturer General Electric, Nikkei reported on Saturday, as Japan is expanding in renewable energy in a zero-carbon push,” reports Reuters. “Japan's offshore wind power market is set to grow as the government aims to install up to 10 gigawatts (GW) of offshore wind capacity by 2030, and up to 45 GW by 2040, as part of its decarbonisation push.”

• German coal plants want to clean up. “Germany’s coal companies are following large multinational miners in cleaning up their image, with critics concerned that restructuring plans may set the stage for emissions to rise further,” reports Bloomberg. “A key risk is that owners of dirty spun-off assets will continue to run them with less pressure from shareholders to go green. While coal plants were considered critical for ensuring Germany’s energy security during last year’s crisis, companies seeking more favorable financing options are trying to get such assets off their books.”

• The Environmental Protection Agency goes back to the office. “EPA’s managerial class, but not its rank-and-file staff, will have to be in the office more often as the agency moves on from the Covid-19 pandemic. EPA will require managers and supervisors to spend more days on site, gradually ramping up in-office work in the coming months, Deputy Administrator Janet McCabe told employees in an internal email,” reports E&E News. “Yet bargaining unit staff members, represented by EPA’s unions, will see no change to their telework and remote work schedules, at least for now. The bulk of EPA’s workforce can continue to telework for the majority of the workweek, despite pressure from the White House, Washington Mayor Muriel Bowser and Republican lawmakers on Capitol Hill to return more federal employees to their cubicles downtown.”

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