Policy Alert: NERC Warns of Summer Electric Grid Strain

Action: According to the recently released North American Electric Reliability Corporation (NERC) 2025 Summer Reliability Assessment, 15 regions of the 23 NERC assessment areas in the grid are expecting higher peak demand in summer 2025. But all regions of the grid are expected to have sufficient resources under normal operating and weather conditions, with supply shortfalls during periods of extreme weather expected in the Midwest, New England, Texas, and Baja California. Since last summer, peak demand across NERC’s 23 assessment areas is forecast to increase by 10 GW, more than double the year-to-year increase that occurred between the summers of 2023 and 2024.

Key Insights

Above-average summer temperatures are one of the main drivers of increased demand and can contribute to forced outages. Last year, the use of natural-gas-fired electricity generation broke records, highlighting the criticality of natural gas in meeting demand. This trend informs operator preparations to help ensure fuel availability over the course of the summer months.
The retirement of more than 7.4 GW of generation capacity, including 2.5 GW of natural gas and 2.1 GW of coal-fired generators, has contributed to resource constraints, along with active but aging generation facilities that present an increased risk to readiness. Forced outage rates for conventional generators and wind resources have trended toward historically high levels in recent years.
In the report, NERC warned grid operators to remain vigilant for the potential of inverter-based resources (IBR) – such as solar, wind, and battery resources – to unexpectedly trip during grid disturbances. A week following the report, NERC issued a Level 3 Alert targeting widespread deficiencies in IBR performance and modeling across the bulk power system (BPS). “As solar, wind, and battery resources remain the predominant types of resources being added to the BPS, it is imperative for industry, vendors, and manufacturers to take the recommended steps for system modeling and study practices and IBR performance,” said the report.
Growth in solar photovoltaic (PV) and battery storage resources has accelerated with the addition of 30 GW of nameplate solar PV resources and 13 GW of new battery storage. This summer, new solar and battery resources are expected to provide over 35 GW in summer on-peak capacity. New wind resources are expected to contribute 5 GW. The recent influx of battery energy storage systems (BESS) across much of the West has improved the ability to manage demand.
Increased demand is largely driven by data centers, electrification, and industrial growth. “While we’re adding a lot more resources — solar, batteries and other emerging technologies — the pace and performance of that build-out doesn’t yet fully align with the reliability needs of a rapidly electrifying economy,” said John Moura, NERC’s director of reliability assessments and performance analysis.

Policy Alert: NERC Warns of Summer Electric Grid Strain

May 29, 2025

Key Insights

Above-average summer temperatures are one of the main drivers of increased demand and can contribute to forced outages. Last year, the use of natural-gas-fired electricity generation broke records, highlighting the criticality of natural gas in meeting demand. This trend informs operator preparations to help ensure fuel availability over the course of the summer months.

The retirement of more than 7.4 GW of generation capacity, including 2.5 GW of natural gas and 2.1 GW of coal-fired generators, has contributed to resource constraints, along with active but aging generation facilities that present an increased risk to readiness. Forced outage rates for conventional generators and wind resources have trended toward historically high levels in recent years.

In the report, NERC warned grid operators to remain vigilant for the potential of inverter-based resources (IBR) – such as solar, wind, and battery resources – to unexpectedly trip during grid disturbances. A week following the report, NERC issued a Level 3 Alert targeting widespread deficiencies in IBR performance and modeling across the bulk power system (BPS). “As solar, wind, and battery resources remain the predominant types of resources being added to the BPS, it is imperative for industry, vendors, and manufacturers to take the recommended steps for system modeling and study practices and IBR performance,” said the report.

Growth in solar photovoltaic (PV) and battery storage resources has accelerated with the addition of 30 GW of nameplate solar PV resources and 13 GW of new battery storage. This summer, new solar and battery resources are expected to provide over 35 GW in summer on-peak capacity. New wind resources are expected to contribute 5 GW. The recent influx of battery energy storage systems (BESS) across much of the West has improved the ability to manage demand.

Increased demand is largely driven by data centers, electrification, and industrial growth. “While we’re adding a lot more resources — solar, batteries and other emerging technologies — the pace and performance of that build-out doesn’t yet fully align with the reliability needs of a rapidly electrifying economy,” said John Moura, NERC’s director of reliability assessments and performance analysis.

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