Changing Power Demand Dynamics in the U.S.: Electrification Risks, Vulnerabilities, Preparation, and Fixes

 

     Electrification, particularly of heating and transportation, is often touted as necessary and sometimes as the main solution for lowering carbon emissions. While electrification is occurring, it has yet to replace much of traditional natural gas heating and the internal combustion engine for transport. Natural gas heating in the U.S. is more or less steady and flat. There has been no growth or reduction. Theat may change in the future. It should also be pointed out that natural gas also powers more of electricity than any other energy source. Thus, electrifying heat will not lower natural gas demand and consumption in the near term. Another near-term observation for EV transport is that due to the current inadequacy of charging infrastructure and EV ranges, most EV owners either also own an ICE vehicle or just travel less miles in their EV. That means that in terms of miles traveled, EVs are not replacing ICE vehicles as fast as purchasing data might suggest.

     With more electrification hitting U.S. power grids we are already seeing some power utilities report record power use during cold and hot weather events. Natural gas use on the grid has also had some record high use during these events. For instance, on January 16, 2024, the Tennessee Valley Authority (TVA) reported record power use, eclipsing their previous record in August 2007. Like ERCOT, PJM, and  many other power utilities and regional power authorities, they put out requests to customers for reduced power use during certain times. Luckily TVA, ERCOT, PJM, and the others had little, or no blackouts reported. However, they do acknowledge that they were close, and if more resources had tripped offline and/or if the weather and temperatures had been worse, there may have been significant blackouts. The main issue to point out is that power reliability is not as good as it could be. There are several reasons for this: more intermittent variable generation on grids, less baseload power on grids, less reserve capacity available in some regions, and insufficient grid upgrades to facilitate power importing/exporting between regions. The highest power demand day in the U.S. was in the hot summer of 2023. While summer demand can increase power demand to the highest levels, winter demand can often happen quickly and with extenuating factors like freeze-offs that can create more reliability problems.  

     Electric heat pump usage is increasing globally, with Asia, the U.S., and the E.U. leading the pack. IEA reports that in 2022, heat pump purchases exceeded fossil fuel heating system purchase for the first time with heat pumps making up 53% of new heating systems. Globally, heat pumps grew by 11% in 2022. In Europe, heat pump adoption grew strongly by 40% in 2022, with much of that due to high natural gas costs as a result of Russia invading Ukraine. Global EV sales grew by 25% in 2022 and by 55% in the U.S.

 

     Investments in heat pumps and EVs are considered to be investments in energy efficiency since electric motors are more efficient than ICE motors and heat pumps are more efficient than natural gas furnaces (although in the case of natural gas that is just for end use as life cycle efficiency for natural gas getting to those furnaces is more efficient than the electricity getting to those heat pumps).  The IEA reported that investments in energy efficiency were expected to reach $624 billion in 2023, rising from $600 billion in 2022, but they also cautioned that due to the increased cost of capital, those investments will not go as far as previously. Investments such as smart energy controls and building energy management systems are also included in energy efficiency investments associated with electrification.

 

     Groups like the North American Electric Reliability Corporation (NERC) are tasked with predicting reliability across different regions. They often sound alarms about vulnerabilities and suggest potential fixes. They note that in some cases where winter cold extends over much of the U.S., as much as 20% of power generation can go offline.

     It is good that there are now heat pumps that can function more efficiently in colder weather as I wrote about earlier this year. For those of us with older heat pumps, we are still vulnerable to very cold weather and must supplement. Sometimes, natural gas and propane furnaces and unvented heaters can run without electricity which is nice if you experience frequent blackouts. In those cases, electrification of heat is a much higher vulnerability than gas heat.

     In different regions of the U.S. there are much different power dynamics for home heating. In the south and southeast most homes are heated with electricity and in the north, most are heated with natural gas. That means there is more vulnerability in the south as we saw during the devastating winter storm Uri in February 2021. Grid operators like New England ISO are predicting steadily rising winter demand peaks into the next decade, partially due to increased electrification.

     While electrification advocates often point out that smart power management can smooth out and offset some of those peaks, I would not suggest relying on this along with requests to reduce usage. It is not a very thorough or solid reliability plan, but rather more of a supplemental help plan. Grid-scale batteries, home batteries, home insulation, virtual power plants, and the like can also help, but only when deployed at high levels and adequately pre-charged for extreme weather events. Relying on them now is more tenuous.

 

 

References:

Your home’s cleaner, better heating system comes with one major cost. Umair Irfan. Vox. January 23, 2024. Your home’s cleaner, better heating system comes with one major cost (msn.com)

TVA hits peak, record-setting demand, no blackouts reported. Dallas Payeton. Local 3 News. January 17, 2024. TVA hits peak, record-setting demand, no blackouts reported | Local News | local3news.com

Global heat pump sales continue double-digit growth. Yannick Monschauer. Chiara Delmastro. Rafael Martinez-Gordon. Commentary — 31 March 2023. International Energy Agency. Global heat pump sales continue double-digit growth – Analysis - IEA

US residential heat pump sales pass gas furnaces for first time as interest in efficiency tech surges: IEA. June 7, 2023. Robert Walton. Utility Dive. US residential heat pump sales pass gas furnaces for first time as interest in efficiency tech surges: IEA | Utility Dive