Southwestern U.S. eyeing a 5,000MW deficit by 2025, could grow exponentially over the next decade.

A cocktail of complications are heading for the American southwest over the next 3 years, as climate change, extended drought, new migrations and the timing of a massive energy system transition are mixing together to create what some might call a crisis. 

Over the next few years, the maximum load demand is expected to increase by 2.4% annually. As this is happening, utilities in the Southwest are planning to retire about 1,200MW of coal capacity and 1,300MW of natural gas capacity. Migrations to the southwest and dropping fossil fuels may sound great in theory for a region, however, climate change is expected to extend droughts, also hurting the capacity of hydropower, and the region is still very much in the midst of a renewable transition. All of this combined means the southwest could be looking at a deficit o 5,000MW by 2025, according to a new report by a collective of Southwestern utilities, “Resource Adequacy in the Desert Southwest.” 

“Maintaining a regional reliability [in a time of such rapid transition between energy resources]  will hinge on whether utilities can add new resources quickly enough to meet this growing need and will require a pace of development unprecedented in the region,” the report reads. 

The report notes that long term need is expected to be carried by solar and battery storage, but nuclear and natural gas will be needed to firm up the system’s reliability. However, the transition period over the next 10 years is what experts are worried most about. 

Current projects under development in the solar, wind, storage and natural gas realm will be able to subsidize only about 1,000MW of that deficit. The ability of the region to fend off Texas and California-style blackouts will be to bring resources online fast enough to address the shortfall. Looking 10 years out, the Southwest region could see demand grow to more than 31,000MW, above its current approximate demand of 24,000MW. Coal and natural gas retirements will reach about 6,400MW by 2033. 

“Due to this combination of changes, the amount of new effective capacity needed within the region would grow to 13,000MW,” the report reads. With only a little more than 1,000MW expected to be added by 2025, the Southwest has their work cut out for them in navigating this unprecedented change and population growth.