Utilities must evolve their resource adequacy approach – here’s how

Just a few short years ago, utility planners didn’t need to worry much about load growth. The U.S. Energy Information Administration’s (EIA) 2015 Annual Energy Outlook forecasted annual load growth of less than 1% through 2040.

Demand for electricity looks completely different today. A report released at the end of 2024 by the consulting firm Grid Strategies forecasts electricity demand growth of 16%, or 128 gigawatts, by 2029.

The data center building boom is driving that growth, fueled by the emergence and rapid uptake of artificial intelligence across sectors. An analysis by the U.S. Department of Energy’s Lawrence Berkeley National Laboratory found that data center load growth tripled between 2014 and 2024. It’s expected to double or triple again by 2028.

Rapid load growth challenges the work of utility resource adequacy planners, whose job is to ensure the power grid has sufficient electricity to always meet customer demand, including during periods of peak demand (like a scorching hot summer day). Resource adequacy planners must also contend with growing volumes of distributed energy resources (DERs) and intermittent generation, like solar and wind. The EIA expects wind, solar, and battery storage to account for 93% of all new generating capacity in 2025.

A challenge today, not the distant future

The combination of accelerating load growth and a growing proportion of renewables is an immediate reliability concern. The North American Electric Reliability Corporation’s (NERC) 2025 Summer Reliability Assessment concluded that extreme heat may result in supply shortfalls this summer. What’s more, the report explained, the presence of inverter-based resources like solar, wind, and batteries increases reliability risks because they sometimes trip offline during grid disturbances.

Rob Homer, a senior product manager at Energy Exemplar, a leading energy modeling and simulation platform provider, quotes the Federal Energy Regulatory Commission (FERC) when he describes the daunting question that resource adequacy planners must answer.

“Rapidly increasing electricity demand driven by hyperscale customers like data centers, combined with the alarming rate of baseload generation retirements and a lack of new dispatchable generation, is not sustainable and must be addressed,” Homer said. “Even if load growth was flat, it would still be a challenge to confidently meet demand with so many non-dispatchable resources.”

Moving toward all-of-the-above resource adequacy planning

This complex mix of factors, taken together with the United States’ shift in energy priorities, means utility planners must increasingly embrace an “all of the above” approach to resource adequacy. With this approach, reliability demands tapping and orchestrating all available resources — from dispatchable resources like coal, natural gas, and nuclear power plants, to variable utility-scale wind and solar plants, demand response, and DERs.

Traditional models — many built in the 1970s and ’80s — struggle to capture the unique characteristics of today’s grid. “Legacy tools were never built to model long-duration energy storage or highly variable resources like renewables,” Homer said. “They look at the system in hourly increments, which doesn't work for battery storage or seasonal dynamics.”

Modern planning requires the ability to co-optimize across resource types and timeframes. That includes understanding not only what a utility plans to build, but also what other players in the market are doing. The interconnection queue, which tracks projects seeking to connect to the grid, has become a vital data source.

“In the past, you didn’t care what others were building,” Homer said. “Now, if another resource goes online in the same area, it can affect your ability to dispatch power, create congestion, or impact your return on investment. You need to plan with visibility into what else is being built and where.”

That insight is especially critical in states without capacity markets, where prices are often too low to justify new generation. “If everything is renewable and free during the day, and you have negative pricing, there’s no commercial advantage to building assets,” he said. “So, who owns reliability? The ISO? The utility? That’s an open question.”

A model that considers all resources

Utilities need solutions built for a complex landscape. PLEXOS^®, Energy Exemplar’s energy analytics and decision platform, is designed to model mixed resource portfolios with precision. Unlike legacy production cost models, PLEXOS^® can simulate multiple timeframes simultaneously and account for emerging technologies like hydrogen, carbon capture, and long-duration storage.

“PLEXOS^® was built to handle seasonal gas storage,” Homer said. “That means it can model long-duration storage natively, which is ideal for battery and renewable planning. You can layer in four-hour, eight-hour, or even compressed air and hydrogen storage, and see how they perform together to meet reliability targets.”

It’s not just about generation. Utilities must also incorporate granular demand forecasts, account for policy uncertainty, and evaluate new business models, such as data centers building on-site generation to “self-power” and potentially avoiding grid reliance altogether.

One of the biggest challenges remains: the load forecast itself. “That’s the question everyone is asking,” Homer said. “Everything we do depends on your demand projection. If you get that wrong, your whole resource adequacy plan is off.”

To hedge against that uncertainty, planners must run multiple scenarios and stress-test their systems. “The generation mix and the assumptions around it must be solid,” he said. “If your load forecast is a question mark, then everything else — your storage needs, grid congestion risk, dispatch assumptions — must be as close to perfect as possible.”

In this high-stakes environment, resource adequacy planning is mission-critical and requires better solutions, better data, and a new mindset.

“We’re in the middle of an all-you-can-eat energy buffet,” Homer said. “The challenge now is figuring out how to serve it all — reliably, affordably, and fast.”

To learn how PLEXOS^® can help you keep up with energy demand, schedule a demo with one of Energy Exemplar’s experts.