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Will data centers disrupt power system adequacy in the U.S. Pacific Northwest?

If data center load growth accelerates and aligns with utility projections by 2029, the PNW’s resource strategy will be insufficient.
Will data centers disrupt power system adequacy in the U.S. Pacific Northwest?
The Grand Coulee Dam (courtesy: The Bureau of Reclamation)

Significant load growth and changing system dynamics in the U.S. Pacific Northwest are creating risks for maintaining power system adequacy, finds the Northwest Power and Conservation Council in its 2029 Resource Adequacy Assessment, an annual five-year test of the power plan’s resource strategy conducted to ensure it will provide an adequate future power supply.

The assessment focuses on the viability of the council’s 2021 Power Plan resource strategy and finds implementing it — specifically achieving energy efficiency consistent with the high end of the council’s target, pursuing renewable deployment of around 6,600 MW by 2029, and ensuring sufficient balancing resources and demand response — will provide for an adequate system.

That analysis comes with a caveat, however. Pursuing the low end of the council’s energy efficiency target would not provide for an adequate system, and if data center load growth accelerates and more closely aligns with utility projections in the region by 2029, the resource strategy will be insufficient, indicates the report.

The council uses an adequacy model called GENESYS to simulate the region’s bulk power system. In each simulation (which represents one year), a simulated shortfall event occurs over a time period when load cannot be served by resources in the model. Each modeled shortfall signals that emergency measures are necessary to avoid a blackout, like expensive cost resources not in an active utility portfolio, high-priced market purchases above normal import limit (such as those that occurred during January 2024’s winter storm event), calls for conservation by government officials (as in September 2022 California heatwave), or curtailment of fish and wildlife hydro operations (as happened during the 2001 Energy Crisis).

The assessment accounts for system changes that will be implemented by 2029, including load growth, in-region resource developments, and out-of-region market fundamentals. Electric load is expected to substantially increase by 2029, thanks to data centers and electric vehicles. However, announced changes to thermal plant retirements, such as Valmy 1 & 2 and Jim Bridger 1 & 2 conversions from coal to gas fueling, and anticipated transmission expansion throughout the WECC, including Boardman-to-Hemingway in the region, appear to alleviate some of the challenges associated with the increased loads when coupled with the 2021 Plan’s resource strategy.

The Pacific Northwest’s hydroelectric system provides more than half the grid’s nameplate capacity. The region has historically had an excess of peaking capacity but continues to be limited by the water supply that powers the hydroelectric system. Due to significant increases in variable energy resources, changes in hydroelectric operating constraints, and other added complexities, the region can no longer assume that it has sufficient capacity to meet all demand; thus, it is important to include a metric to protect against excessively high-capacity shortfalls, argues the report.

From an adequacy perspective, while hydropower is slightly reduced, based on the limited subset of studies used for a comparative study, the changes do not lead to a significantly different regional adequacy result. Offsetting the reduced hydropower is a small increase in regional thermal generation and market reliance, yet within the market reliance limit, throughout most of the year, especially at night.

The 2021 Power Plan’s resource strategy recommends that between 750 and 1,000 average MW of cost-effective energy efficiency, at least 3,500 MW of renewable resources, and 720 MW of low-cost and frequently deployable demand response be acquired, as well as increasing balancing up reserve requirements to 6,000 MW to respond to growing short-term uncertainty in variable energy resources (primarily wind and solar) by 2027.

The report acknowledges other changes to the regional power system that are important to consider since the 2027 assessment, including announced thermal retirement changes of coal-to-gas conversion, expanded transmission capacity, and hydro changes from the Resilient Columbia Basin Agreement to the Lower Snake and Lower Columbia projects.