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Presentation to the Legislative Energy Horizons Institute on grid reliability and renewable integration, including resource adequacy, flexibility, and distributed energy resource considerations.
Capacity markets provide important incentives for resource adequacy in electricity markets and may become more important for providing sufficient revenue and generation capacity with changes to energy market prices driven by increasing levels of zero marginal cost resources. However, current capacity market designs also have important shortfalls that may limit the benefits they can provide to the future grid. Current capacity markets are primarily designed for participation from conventional thermal generators, but markets are evolving with increasing levels of variable renewable energy resources. However, further reforms may be necessary to enable more participation from DERs and demand-side resources. To understand the benefits and shortfalls of current capacity market design, we review the historical reasons electricity markets have needed capacity markets or capacity payments for resource adequacy, and how current capacity market designs may create challenges for incorporating increasing levels of DERs and demand-side resources. We then consider how transactive systems, which allow the coordination of bids and offers for DERs and demand-side resources through a market interaction approach, administered by a Distribution System Operator (DSO), can address traditional resource adequacy problems due to inelastic consumer demand. We also consider the need for a DSO-level capacity market in helping to meet resource adequacy, reliability, and other electricity market objectives. We find that because the missing money in electricity markets is largely driven by incentives to meet resource adequacy goals, and the bulk grid would always supply power to the DSO, that resource adequacy is unlikely to be a determining factor in the need for a DSO-level capacity market. Many current reliability problems could also be addressed by the incorporation of more flexible demand enabled with transactive energy systems. However, other DSO objectives, including resilience, reactive power, voltage control, environmental policies, and energy equity could lead to specific challenges that could be aided by a DSO-level capacity market. We consider the possibility of a DSO-level capacity market in addressing these challenges as well as its potential role in coordinating with the Independent System Operator (ISO) who operates the wholesale market. We conclude with suggestions for future research, including the need to develop analytical models of DSO-level capacity market designs to address these potential objectives and examine their implications for DSOs and consumers.
Given these challenges and current modeling gaps on Long Duration Energy Storage (LDES), enhancing the structure and design of existing planning, operations, and organized wholesale markets can better characterize the value of LDES to the power system. To more thoroughly assess the gaps and barriers to LDES investment and readiness for integration into a future grid, we conducted stakeholder outreach through an online survey, interviews with individual independent system operators/regional transmission organizations, and a literature review. Based on this assessment, we identified a set of opportunities for LDES focused development, including a framework to quantify the contributions of LDES on resource adequacy, reliability, and resiliency. Specifically, we identify the potential demand for and benefits of an open-source, LDES-centric evaluation framework that can guide future planning, operations, market design, and policy reforms.
The Electric Power Transformation: 2023 MEGA Symposium has a focus on the transition of the energy generation industry to cleaner and climate resilient electric power that can remain cost-effective and reliable. Electric power energy issues abound as the world and the industry address environmental policy challenges—climate change, air quality, waste and water policy, environmental justice, and Environmental Social Governance —and various technology issues related to energy production and delivery, including the latest cutting-edge options. This presentation discusses reliability and decarbonization of the power sector with a focus on resource adequacy and resilience.
Transmission can play an important role in ensuring systems are resource adequate, yet in many cases quantifying that value can be difficult. This presentation explores different ways to understand transmission resource adequacy value, and in particular highlights how transmission can impact the tradeoff between reliability and cost.
This literature review catalogs more than 90 publications focused on large loads, and groups the documents and resources thematically into 12 categories, (listed below). The 2026 Large Load Literature Review and Data Sources summary reports are available here: https://emp.lbl.gov/publications/2026-large-load-literature-review -Load forecasting -Data sources -Reliability and resource adequacy -Large load interconnection -Demand flexibility -Generation -Co-location -Data center location/infrastructure -Large load tariffs -Policy options -Maps and tools -Design and operations
Today's rapidly increasing levels of wind, solar, storage, and load flexibility require the industry to rethink reliability planning and resource adequacy methods for modern power systems. Periods with a risk of shortfall often no longer coincide with peak demand - reliability risks are less about peak load and more about the daily setting of the sun, extended cloud cover, wind speeds, cold snaps, and heat waves. In addition, demand is increasingly flexible. Key resources are time-sensitive, as batteries need time to recharge and electricity customers can only be asked to provide demand response for just so long. And reliability failures are often correlated - with one another and with the weather. Two driving factors require the industry to reconsider its analytical approach for resource adequacy: (1) Chronological grid operations: The increasing importance of variable renewable resources (such as wind and solar) and of energy-limited resources (storage and demand response) make it essential to understand the full year of chronological operation of the grid. Specific attention must be paid to hourly, seasonal, and inter-annual resource variability. The sequence of the variability is key, as energy-limited resources such as batteries or demand response require either a preceding period or subsequent period of high production to be useful for grid reliability. (2) Correlated events: Historically, resource adequacy analysis focused on shortfalls caused by random, discrete mechanical failures of large generating units. In contrast, shortfalls today are often caused by multiple, correlated events caused by common weather patterns. Resource adequacy analysis must increasingly shift its focus to these correlated events. The redesign of resource adequacy methods will benefit from a set of guiding principles to better allow for sharing of insights and best practices, interregional resource coordination, and a smoother regulatory process for resource procurement. The objective of this report is to move this redesign forward. It provides an overview of key drivers changing the way resource adequacy needs to be evaluated, identifies shortcomings of conventional approaches, and outlines first principles for practitioners to consider as they adapt their approaches. The central message is: what got us here won't get us there.
Climate change has prompted many communities to set targets for carbon-free power supplies, but they often lack data-driven strategies to achieve them. We present a comprehensive analysis of an entirely renewable electric power system that can maintain operating reliability and resource adequacy using detailed models of the city of Los Angeles power grid. In consultation with the operating utility, the Los Angeles Department of Water and Power (LADWP), and the local community, we develop four supply scenarios across three demand projections to analyze which types of infrastructure and operational changes would achieve reliable electricity at least cost. We find that a reliable, 100%-renewable power system yielding more than $1 billion annually in health and climate co-benefits is achievable. Solar can supply most future energy needs, while combustion turbines that use renewable, storable carbon-neutral fuels are key to maintaining reliability. This study provides a replicable methodology that other jurisdictions globally can follow.
Traditional Resource Adequacy (RA) frameworks in the U.S. undervalue the contributions of inter-regional transmission to resource adequacy during stress periods, focusing on the availability of nameplate capacity instead. However, availability of nameplate capacity does not always translate into electricity delivery, especially during tail events. Moreover, the rapid deployment of energy-limited resources and increasing electricity demand challenge existing resource adequacy frameworks and couple regional electricity demand and availability of supply via transmission. We propose a two-stage framework that goes beyond the existing capacity-centered approaches to reveal the RA contributions of transmission. In the first stage we introduce a multi-objective optimization framework to quantify the merits of transmission expansion via Pareto Frontiers under alternative futures of no transmission investment, primary energy resources availability and demand growth. The second stage focuses on tail events and leverages the results of the first stage to characterize the risk profile of regional consumers across the U.S. under the alternative energy futures. We find that no new transmission can lead to a more expensive and less reliable national grid across scenarios, however, the impact on regional RA can vary. The probabilistic analysis reveals that transmission investments can alleviate the tail risk of consumers, however, the availability of fuel resources does not always alleviate regional tail risks. Our findings inform policymakers and utilities on the prioritization of transmission investments to mitigate the risk of widespread outages, also for tail events, and ensure reliable and affordable electricity delivery to all.
Resource adequacy analysis quantifies the likelihood of capacity shortfall on a power system in a probabilistic manner. Using a combination of statistical techniques and power system fundamentals, the analysis typically evaluates hundreds or thousands of stochastic random samples (replications) of varying load, generator outages, variable renewable energy availability, and other aspects of power system uncertainty. In this range of uncertainty, there are - at times - periods where the power system's available resources are insufficient to meet system demand, referred to as a shortfall event. Today's power systems' rapidly evolving generation mix is changing the types of data needed by system planners and regulators, which can often render traditional resource adequacy metrics insufficient for ensuring resource adequacy for tomorrow's grid. In this paper we provide a critical assessment of traditional measures of shortfall risk in power systems, discussing their shortcomings and how they compare to metrics used in other domains. From this analysis we propose four steps forward for improving power system resource adequacy risk metrics in the future.
The transition toward a cleaner and more weather-dependent power system brings with it unprecedented challenges and opportunities for maintaining resource adequacy—namely, a future that includes rapid load growth, plant retirements, and a shift toward variable and energy-limited resources. Resource adequacy analyses, capacity accreditation, and the resource adequacy planning criteria are becoming increasingly important for power system planning and investment decisions. While previous ESIG reports evaluated the changing resource adequacy risks and planning practices created by the energy transition, none specifically examined potential changes to the resource adequacy criterion used for planning. The resource adequacy criterion sets the level of supply- and demand-side resources that are required for a given power system to meet reliability objectives. It is a pivotal standard that influences billions of dollars of investment decisions.
ReEDS-India is an open-access tool for mid- and long-term capacity expansion modeling that finds the mix of generation, transmission, and storage technologies that meet the anticipated requirements of the electric sector at least cost.
This webinar covers and introduction to power system resource adequacy, examining definitions, metrics, an overview of probabilistic methods, incentives and capacity credits, storage modeling, and evolving practices.
The Probabilistic Resource Adequacy Suite, or PRAS, is a software package for studying power system resource adequacy. It allows the user to simulate power system operations under a wide range of operating conditions, in order to study the system’s risk of failing to meet demand due to a resource shortfall, and identify the time periods and regions in which that risk occurs. This reports documents version 0.6 of the tool.
Traditional methods for assessing the resource adequacy (RA) of a power system are becoming obsolete due to emerging trends such as the increasing deployment of variable renewable energy and storage. Consequently, analysts are recommending that RA be assessed using a Monte Carlo simulation approach that models chronological power system operations over many instances of possible operating conditions. However, this approach is necessarily more complex and computationally demanding, which is an obstacle to real-world implementation. Here, in this study, we investigate which operational details of power systems are important to capture in order to accurately evaluate a system's RA, versus details that add complexity but do not meaningfully affect RA results. To do so, we develop a probabilistic RA assessment framework by adapting an existing production cost model and apply it to a case study based on the IEEE Reliability Test System. Our results indicate that multi-year data, storage dispatch, and transmission limits are key details to incorporate. Accurate RA results can be obtained using non-economic dispatch strategies as long as they are coordinated with detailed operational strategies. We also demonstrate how popular expectation-based RA metrics can mask important differences in the characteristics of loss of load events.
The Probabilistic Resource Adequacy Suite, or PRAS, is a software package for studying power system resource adequacy. It allows the user to simulate power system operations under a wide range of operating conditions, in order to study the system's risk of failing to meet demand due to a resource shortfall, and identify the time periods and regions in which that risk occurs. This reports documents version 0.8 of the tool.
The Interconnections Seam Study examines the potential economic value of increasing electricity transfer between the Eastern and Western Interconnections using high-voltage direct-current (HVDC) transmission and cost-optimizing both generation and transmission resources across the United States, proposing, assessing, justifying, and illustrating a major infrastructure change involving two of the worlds largest power grids. The study conducted a multi-model analysis that used co-optimized generation and transmission expansion planning and production cost modeling. Four transmission designs under eight scenarios were developed and studied to estimate costs and potential benefits. The results show benefit-to-cost ratios that reach as high as 2.5, indicating significant value to increasing the transmission capacity between the interconnections under the cases considered, realized through sharing generation resources and flexibility across regions.
Context: This webinar was hosted by the MultiSector Dynamics Community of Practice (MSD CoP; https://multisectordynamics.org). Abstract: Projections of the need for new data centers to support Artificial Intelligence (AI) are large but highly uncertain. Recent projections indicate up to a 15% annual growth rate in data center electricity demand within the next 5-10 years. Given that most electric utilities are required to have a reserve margin of roughly the same magnitude as the projected growth in demand, these new data center loads could soon threaten resource adequacy and reliability unless data centers build their own generation, interruptible loads are negotiated, commensurate new capacity and/or transmission is built, or some combination of these options. Similarly, depending on the cooling technology and geographic location of new data centers, they could threaten water adequacy in water scarce regions. This webinar will provide an overview of the interactions between energy and AI and highlight two MSD projects exploring the grid and water implications of new data centers to support AI. Presenters : Dr. Casey Burleyson (Pacific Northwest National Laboratory); Dr. Stephanie Morris (Pacific Northwest National Laboratory); Kendall Mongird (Pacific Northwest National Laboratory) Moderator: Patrick M. Reed (MSD CoP Facilitation Team) This webinar was held on: June 16th, 2025 from 1-2 PM EST.