The U.S. electricity supply is once again in crisis

China Energy Storage Network: As early as the beginning of May, power grid operators in California, Texas, Indiana and other regions of the United States jointly issued a warning: the entire United States will face a shortage of electricity. As the temperature rises and the demand for electricity increases, the United States is likely to face a more serious power supply crisis this summer.

Summer is not here yet, but the gap has already appeared

Recently, six power plants in Texas stopped generating electricity for "unknown reasons", causing the state to face another power shortage crisis after the large-scale power outage last winter. Subsequently, the Electric Reliability Council of Texas (ERCOT), the largest power generation dispatching agency in Texas, called on residents to control the temperature of air conditioners and try to save electricity in the coming days.

According to the Texas Tribune, the total installed capacity of power plants that were taken offline in Texas was about 2.9 million kilowatts. Just one day before the accident, ERCOT issued a notice to one of the power plants, asking it to postpone maintenance work to ensure local electricity supply.

According to Reuters, on the day the power plant was shut down, ERCOT's real-time electricity price once reached a high of more than $4,000 per megawatt-hour, dozens of times higher than the normal level.

At the same time, the US weather forecast agency AccuWeather pointed out that in the third week of May, the temperature in Houston, the largest city in Texas, exceeded 35 degrees Celsius, about 5 degrees higher than the average temperature in previous years, which will lead to a continued increase in residents' electricity consumption.

ERCOT said it has now mobilized all available electricity in Texas and called on residents to conserve electricity.

Texas is not the only state facing challenges in power supply. The Wall Street Journal quoted California power operators as saying that the state is also expected to face power shortages this summer, and that unexpected factors such as extreme heat and wildfires will exacerbate the crisis. The Midwest Independent System Operator (MISO) also said that in April this year, there was a shortage of electricity in the Midwest. If this situation continues, the company will have to take emergency measures to avoid large-scale power outages in the summer.

Traditional power supply is retired and new power supply is insufficient

The Wall Street Journal quoted several people in the US power industry as saying that the frequent power crises in the US are mainly due to the excessive retirement of traditional power sources and insufficient supply of new power sources. In the past two years, most states in the US have announced timetables for the retirement of coal-fired power plants, while at the same time, the newly added clean energy power generation capacity is not enough to make up for the vacancy caused by the retirement of coal-fired power.

The latest data released by the American Clean Power Council (ACP), the largest renewable energy trade organization in the United States, shows that in 2021, the United States' new installed capacity of renewable energy was about 27.72 million kilowatts, a year-on-year decrease of 3%. Among them, the new installed capacity of onshore wind power even fell sharply by 22%. According to the development goal of "a carbon-free grid by 2035" proposed by the US government, last year, the United States' new installed capacity of renewable energy only reached about 45% of the required capacity.

ACP clearly stated that policy factors have slowed down the growth of renewable energy power installations in the United States. In terms of photovoltaics, the US government has been continuously investigating international photovoltaic products. Factors such as tight supply chains, high shipping costs, and uncertain trade policies have had an adverse impact on the new photovoltaic installations in the United States. At the same time, the tax credit policy related to wind power projects is still unclear. Under these combined influences, at least 11.4 million kilowatts of new clean energy installations in the United States were postponed last year.

Frequent extreme weather and poor grid reliability

In addition, poor grid reliability has also become a major factor in the frequent power supply crises in the United States. According to statistics from the U.S. Energy Information Administration, in 2020, the average American resident experienced a power outage of more than 8 hours. At the same time, extreme weather such as wildfires, severe cold, and tornadoes have also occurred more frequently, further bringing risks to power supply.

According to the Wall Street Journal, the U.S. backup power supply and household solar storage markets have been extremely hot this year in order to avoid the inconvenience caused by large-scale power outages due to the fragility of the power grid. Last year, the proportion of American households that chose to use backup power supply soared from 0.57% in 2000 to 5.75%.

The American Society of Civil Engineers released a report stating: "Most of the U.S. power grid facilities are seriously aging, with more than 70% of grid access and transmission and distribution facilities entering the second half of their lifespans, and some facilities are even more than 100 years old." The Brattle Group, a U.S. consulting firm, also stated that the efficiency of communication in power grid planning between U.S. states is very low, and that the U.S. has basically not built any large-scale inter-regional power grid interconnection projects in the past 10 years.

MISO CEO John Bear also admitted that in the short term, the risk of power shortages cannot be avoided, and grid operators will have to take other emergency measures to ensure supply.

According to a research report released by Princeton University, in order to achieve the climate goals set by the United States, the United States needs to invest $360 billion in power grid upgrades by 2030, and this figure will further increase to $2.4 trillion by 2050. However, the United States still lacks relevant overall policies, and all parties cannot reach a consensus on infrastructure investment.

Industry analysts generally believe that policy and regulatory issues are complicating the upgrade of the U.S. power grid, and delaying the upgrade of power grid infrastructure will in turn limit the development of renewable energy, which will lead to a vicious cycle.