Total System Reliability: Navigating the Challenges of Modern Risk and Demand

Today’s electric grid was never designed for this. A surge in AI-driven energy demand, an increase in extreme weather events, and an aging transmission network are converging to create unprecedented reliability challenges. The scale and speed of this transformation are unlike anything the industry has seen.  

At CERAWeek 2025, this issue will be at the forefront of discussions, including on the panel where I’ll be speaking. We can’t afford to wait another decade to address these challenges – action is needed now. Power producers, regulators, utilities, and policymakers all share a collective responsibility.  

Power producers must rethink their approach, learning from the fast-moving technology sector while acknowledging the realities of energy infrastructure challenges. Regulators must update reserve margin requirements and streamline permitting processes. Utilities must invest in validated, dispatchable solutions. And lastly, policymakers must focus on grid resilience by accelerating transmission upgrades and ensuring flexible assets are in place to support a renewable-heavy grid. 

Aligning Energy with Technology’s Rapid Evolution  

The technology sector evolves at breakneck speed, especially evident through the rise of AI. ChatGPT, for example, debuted in late 2022 and by February 2025 had surpassed 400 million weekly active users. The implications of this fast adoption are now impacting the energy sector – a field traditionally marked by decades-long infrastructure planning and construction.  

Unlike the tech industry, utilities must navigate multiyear processes including permitting, interconnection, RFP issuance, and construction before a plant can even generate power. While energy infrastructure isn’t set up to pivot as quickly as tech, there are opportunities to enhance efficiency without sacrificing long-term reliability. By standardizing engineering processes, drawings, and designs across similar projects, energy providers can fast-track project timelines.  

The power producers that can adapt and expedite timelines will gain a competitive advantage, benefiting from the ability to be first in line for gas turbine units to satisfy new loads. 

On the customer side, utilities are increasingly proactive. They’re updating their integrated resource plans (IRPs) more frequently and delivering off-cycle revisions that more accurately reflect surging demand projections. These timely updates reassure public utility commissions (PUCs) that utilities are making smart, cost-effective decisions to ensure a stable power supply. 

The power producers that can adapt and expedite timelines will gain a competitive advantage, benefiting from the ability to be first in line for gas turbine units. For instance, in 2024, Entergy was selected to power Meta’s $10 billion data center in northeast Louisiana. To power this center, Entergy is building three gas turbines and, pending regulatory approval, the new generators are expected to come online between 2028 and 2029. 

Regulators’ Response to Surging Demand 

As power providers adjust to rising demand, regulators are stepping up to ensure energy reliability. Many independent system operators (ISOs) and regional transmission organizations (RTOs) are raising reserve margin requirements.  

These reserve margins vary across region and depend on season. For instance, the New York Independent System Operator, Inc. (NYISO) has approved a statewide installed reserve margin of 22% for the 2024-2025 Capability Year (a 2-percentage-point increase), while Southwest Power Pool plans to implement a 16% summer margin in summer 2026 (a 1-percentage-point increase) and a 36% winter planning reserve margin (up from 15 percent).  

Maintaining an adequate reserve margin is essential to grid stability. With electrical and grid system design, when margins fall below critical thresholds, the grid becomes vulnerable to power outages and blackouts. Moreover, higher reserve margins often drive more demand, prompting customers to request additional generation capacity. These requests ultimately feed into a utility’s IRP, signaling the rise in generation to relevant stakeholders.  

Utilities’ Strategies for Strengthening System Reliability  

To keep pace with rising demand, utilities are choosing validated solutions, flexible generation solutions, and advanced technologies.  

Looking ahead, AI is emerging not only as a disruptor but also as a vital tool for grid management.   

Validation ensures that new technologies work reliably under real-world conditions, which is critical when responding to the growing energy demands of AI and data centers that require 24/7 baseload power. 

For example, Mitsubishi Power’s T-Point 2 is the only commercially operating power plant designed specifically to validate power solutions. It rigorously tests primary equipment, like gas turbines, and auxiliary systems such as pumps and fans. At T-Point 2, the installation of TOMONI – a suite of intelligent solutions – shortens start-up times and automatically optimizes operating parameters.  This commitment to engineering precision and cutting-edge innovation not only accelerates the energy transition but also reinforces grid resilience. 

Beyond validated technologies, utilities are enhancing reliability by investing in flexible, dispatchable power solutions.  

Peaker plants, typically powered by natural gas, offer rapid-response electricity to address short-term gaps when demand surges. Hybrid renewable-gas setups integrate renewables like solar or wind with natural gas turbines, maximizing clean energy use while retaining the flexibility to generate power when renewables are insufficient. In addition, long-duration storage solutions, such as advanced battery systems or hydrogen, enable utilities to store excess energy and deploy it during extended periods of low generation, smoothing out supply fluctuations.  

Looking ahead, AI is emerging not only as a disruptor but also as a vital tool for grid management. In other sectors, like wastewater management, AI-driven technologies are already improving a utility’s ability to leverage analytics and make informed decisions, as well as anticipating climate impacts, helping them prepare and become more resilient. 

AI in the energy sector can analyze load profiles across various time zones and optimize resource allocation. For example, if AI-driven weather models forecast a dip in wind power during peak demand, utilities can proactively shift to gas or battery power, ensuring a more resilient grid.  

Modernizing Transmission to Unlock Capacity 

Addressing generation alone isn’t enough to keep the grid reliable. Transmission constraints remain a major hurdle, and when transmission systems fail to keep pace, the effects are felt by consumers – whether through higher electricity costs, extended blackouts, or stalled economic growth in energy-dependent regions. To meet increased demand, we need transmission network upgrades.  

Despite growing generation needs, transmission infrastructure has not kept pace. The rate of new high-voltage transmission lines has declined over the last decade, creating grid interconnection bottlenecks. According to the Lawrence Berkeley National Lab, by the end of 2023, nearly 2,600 GW of generation and storage capacity across the U.S. was seeking grid connection.  

To address this, transmission technology providers are both developing new infrastructure and upgrading existing lines to increase capacity without requiring full-scale construction. Policy can play a vital role by accelerating transmission projects, streamlining permitting processes, and encouraging investments in grid modernization. For instance, the 2024 Transmission Facility Financing Program announced direct loans for eligible transmission projects located within National Interest Electric Transmission Corridors. Likewise, regulators can support by expediting reviews, as seen in the Federal Energy Regulatory Commission’s (FERC) approval of a fast-track review process for projects under PJM’s Reliability Resource Initiative. 

Powering the Future 

Achieving system reliability requires a complex balance between meeting rising demand and delivering returns to shareholders. With cross-industry integration and smarter planning, power providers are better equipped than ever to adapt. Rather than viewing system reliability as just an immediate necessity, they must recognize it as a long-term strategic imperative. At CERAWeek, industry leaders will deliberate on these challenges – yet the real work begins now to ensure the energy system is ready to power the future.  

Samir Vora, Vice President of Market Intelligence, Strategy, and Pricing at Mitsubishi Power, will be sharing his insights on the challenges of power system reliability. Don't miss his expert-led panel at CERAWeek on Thursday, 3/13. 

For more information on how Mitsubishi Power is shaping the future of energy, explore our exclusive CERAWeek Insights here: Discover More About CERAWeek and Mitsubishi Power's Role in Shaping Future Energy.