NERC Warns Deployable Grid Reserves Are Shrinking as Forced Outages Rise at Coal and Gas Plants

The North American power grid is built on a fundamental assumption: when electricity demand spikes, grid operators can call on a deep bench of backup power plants to keep the lights on.

But that bench is getting thinner. According to the North American Electric Reliability Corporation (NERC), the deployable reserves that grid operators rely on to balance the system are steadily shrinking.[1]

The primary culprit is not just the planned retirement of older power plants, but a sharp increase in unexpected breakdowns—known as forced outages—at the coal and natural gas facilities that remain online.

NERC’s 2026 State of Reliability report reveals the scale of the shortfall. Between 2024 and 2025, forced outages reduced coal generation availability by 39.8 terawatt-hours (TWh) and natural gas availability by 19.1 TWh.[1]

To understand why this matters, it is necessary to look at how grid reserves function. Grid operators must maintain a continuous, second-by-second balance between the electricity being generated and the electricity being consumed. When a heat wave drives up air conditioning use, operators dispatch reserve power plants to meet the surge.

Historically, coal and combined-cycle natural gas plants were considered highly dispatchable resources. They were expected to be available on demand, with forced outage rates rarely exceeding 8 percent.

However, the NERC data shows that the annual weighted equivalent forced outage rate across the bulk power system spiked to 9.2 percent in 2025, driven primarily by failures at these legacy thermal plants.

The evidence points to a combination of aging infrastructure and extreme weather vulnerability. As plants operate past their original design lifespans, mechanical failures become more frequent.[1]

Furthermore, the Union of Concerned Scientists has documented that during severe winter storms, natural gas infrastructure frequently freezes, cutting off fuel supplies to power plants exactly when heating demand peaks. During recent extreme weather events, gas-fired capacity accounted for the majority of offline generation.

Conversely, fossil fuel industry groups argue that the grid's vulnerability stems from retiring these plants too quickly. Organizations like America's Power maintain that coal facilities, which store weeks of fuel on-site, are essential during prolonged heat waves or extreme cold when renewable output drops.

This debate over supply reliability is colliding with an unprecedented surge in electricity demand.

NERC projects massive load growth over the next decade, driven by the electrification of heating and transportation, alongside the rapid expansion of artificial intelligence data centers.

The sheer scale of these new loads introduces novel operational challenges. In February 2025, a transmission fault in the Eastern Interconnection triggered a 1.8-gigawatt load reduction initiated by data center customers—a stark demonstration of how large, concentrated loads can impact grid stability during disturbances.

Yet, some analysts urge caution regarding these demand forecasts. Grid Strategies suggests that NERC's projections for data center growth may be overstated, noting that supply chain shortages for power transformers and cooling equipment could naturally throttle the pace of new construction.

To bridge the gap between shrinking thermal reserves and growing demand, grid operators are accelerating the deployment of alternative backup systems.[1]

Battery energy storage systems are scaling rapidly. In 2025, battery additions matched the growth rate of solar power, providing operators with a new tool to absorb excess midday solar generation and discharge it during the critical evening hours when solar output fades.

Additionally, Virtual Power Plants (VPPs) are emerging as a decentralized reserve. By aggregating distributed energy resources—such as residential smart thermostats, electric vehicle chargers, and home batteries—VPPs can shift demand away from peak hours, effectively creating capacity that serves the same function as a traditional power plant.[1]

The transition period remains precarious. As the grid shifts from a centralized, fossil-heavy architecture to a decentralized, weather-dependent one, operators must manage the physical realities of both systems simultaneously.

The data from NERC serves as an early warning rather than a prediction of inevitable failure. The challenge for policymakers and utilities is to scale up storage, transmission, and demand flexibility faster than the legacy thermal fleet degrades.