FERC’s Summer Assessment for 2024, presented at the Commission’s May 23, 2024, open meeting, finds what one would expect of a modern summer energy assessment: forecasts for warmer-than-average weather and adequate generating availability, though extreme conditions could challenge some specific regions of the country.
But what this year’s assessment also does is presage some of the emerging long-term trends in electricity demand and technological developments that led the Commission earlier this month to approve the landmark rule, Order No. 1920, that outlines how to plan and pay for transmission facilities that regions of the country will need to power the American economy through the 21st Century.
“Our country is facing an unprecedented surge in demand for affordable electricity while confronting extreme weather threats to the reliability of our grid and trying to stay one step ahead of the massive technological changes we are seeing in our society,” FERC Chairman Willie Phillips said of Order No. 1920. “Our nation needs a new foundation to get badly needed new transmission planned, paid for and built.”
Weather drives demand for energy and affects the supply of energy. Warmer summer temperatures increase demand for electricity for cooling and natural gas to generate that electricity – and can lead to such major events as hurricanes or derechos that can affect production of oil and natural gas and cause power outages from damage to transmission towers.
Here are some findings from the FERC Summer Assessment:
- The National Oceanic and Atmospheric Administration (NOAA) forecasts temperatures this summer to be above normal for most of the U.S., while forecasters elsewhere have issued early-season warnings of a potentially active hurricane season given record-warm ocean temperatures and a shift to the La Nina weather pattern.
- While total net summer generating capacity is projected to grow by 3.4 percent this summer compared to last summer, the U.S. Energy Information Administration (EIA) projects that total demand will increase by 4.4 percent this summer relative to last year. The North American Electric Reliability Corporation (NERC) forecasts that demand growth will be concentrated in the PJM Interconnection (PJM), Southwest Power Pool and Texas, along with Florida and the Southwest.
- As with the long-term electricity demand projections that underpin Order No. 1920, data centers are a key part of the recent growth and this summer’s projected rise in electricity demand. The rapid growth of emerging technologies like Artificial Intelligence and Machine Learning has fueled growth in data centers’ capacity in recent years. For example, PJM expects 2.3 percent net energy for load growth in 2024 and credits that increase to continued data center construction, along with the electrification of transportation and industry.
- Supply chain disruptions during summer 2024 could hamper the electric industry’s work on construction, operations, reliability and security. Supply chain issues make it more difficult for generators and transmission owners to schedule maintenance outages, to determine when new transmission resources will come online, and to interconnect new power generating resources.