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What are the Anticipated Reserve Margins for this Summer?

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There are sufficient resources to meet this summer's projected peak electricity demand. 

That's according to a recent analysis released by the North American Electric Reliability Corporation (NERC). In its 2017 Summer Reliability Assessment, NERC calculates the total amount of available resources in select NERC regions and finds there are enough to meet this summer's peak demand. 

The anticipated reserve margin — which is simply the amount of expected unused electric generating capacity at the time of peak demand — ranges depending on U.S. region. The EIA map below highlights reference margins and anticipated reserve margins throughout the United States. 

Source: U.S. Energy Information Administration, based on NERC's 2017 Summer Reliability Assessment

As the map indicates, this summer's anticipated reserve margins are highest in the New York Independent System Operator (NYISO) and PJM Interconnection, where reserve margins are above 28 percent. 

On the opposite end of the spectrum is the Independent System Operator for New England (ISO-NE), where the anticipated reserve margin is 14.9 percent and is below its reference margin of 15.1 percent. However, EIA reports that 315 megawatts (MW) of additional resources are expected to come online later this summer and are not currently included in NERC's calculation. These prospective resources would bring ISO-NE’s reserve margin to 16.1 percent.

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What helps ensure sufficient reserve margins? Increasingly, Demand Response is playing a major role in ensuring reliability and helping large businesses earn income. Demand Response is a load management program that pays participants to reduce electricity usage during periods of peak demand across the system. With the Direct Energy Business Demand Response program, large businesses can earn potential monthly income by curtailing their electricity usage during specific times of significant stress on the grid. 

Looking to keep up with electricity and natural gas news? We regularly track and report on the latest market trends here. Our most recent Energy Market Update video discusses the results from PJM Interconnection's capacity auction for the 2020/2021 time period: 

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Posted: June 09, 2017