NERC Warns of Escalating Grid Reliability Risks as U.S. Power Demand Surges Over the Next Decade

The North American Electric Reliability Corporation on Jan. 29 released its 2025 Long-Term Reliability Assessment, finding that resource adequacy risks across the North American bulk power system are intensifying over the next 10 years as electricity demand accelerates faster than new generation and infrastructure additions. The assessment identifies rapid growth in large loads, particularly data centers supporting artificial intelligence and the digital economy, as the primary driver of a significantly higher demand outlook.

The assessment projected summer peak demand growth of 224 gigawatts over the next decade, representing a more than 69 percent increase compared with the prior year’s forecast. Winter peak demand growth remains an even greater concern, with growth of 246 gigawatts expected over the same period. The assessment finds that winter demand growth continues to outpace summer growth, reflecting evolving electricity use patterns and increased exposure to cold-weather conditions.

The report highlights growing reliability risks as generators with diverse fuel supplies retire and are replaced largely by solar resources, battery storage, and natural gas-fired generation. Battery storage additions are now projected to match solar capacity growth, while natural gas-fired resources account for about 15 percent of planned capacity additions, followed by wind and hybrid resources at roughly 8 percent each. Although interconnection queues continue to expand, the organization emphasized that uncertainty around project timing and completion raises concerns that new resources may not be delivered quickly enough to meet rising demand.

To mitigate reliability challenges, the assessment calls for coordinated action by integrated resource planners, grid operators, regulators, and policymakers. Recommended actions include expediting generation and transmission development, carefully managing generator retirements, strengthening long-term adequacy assessments, and improving coordination between electric and natural gas systems. The organization also urged greater attention to large-load growth and the use of flexible demand capabilities during periods of system stress, while streamlining siting and permitting processes to reduce barriers to critical infrastructure development.