GridLab Analysis: Department of Energy Resource Adequacy Report

Overview:

This memo provides a high-level overview of the recently released Department of Energy (DOE) Resource Adequacy Report, released on July 7, 2025. This report is a result of the Executive Order from the Trump Administration on Strengthening the Reliability and Security of the Grid, which directed the agency to develop and publish a methodology for “analyzing current and anticipated reserve margins for all regions of the bulk power system regulated by the Federal Energy Regulatory Commission and shall utilize this methodology to identify current and anticipated regions with reserve margins below acceptable thresholds as identified by the Secretary of Energy.”

The Executive Order also directs the DOE to prevent generation sources exceeding 50 MW from retiring or converting fuel sources if it would reduce generating capacity in at-risk regions, based on the new methodology. The DOE has so far issued two emergency orders under section 202(c) of the Federal Power Act. These orders directed plant owners and grid operators to delay by 90 days the retirement of the Campbell coal plant in Michigan owned by Consumers Energy and the Eddystone gas and oil plant in Pennsylvania, owned by Constellation. The EO and its methodology report did not include a mechanism for public input.

Bottomline of the DOE report:

The report warns of a 100X increased risk of outages if the forecasted retirements by 2030 take place. The report blames the lack of “firm” generation replacement in the planned supply.

Bottomline of GridLab analysis:

The report’s conclusions are problematic since the report undercounts the resources that are likely to be added to the grid, and overstates the retirements expected. Utilities and markets already have plans to meet increased load growth, yet the DOE report assumes they are doing nothing after 2026.

DOE Report Analysis – Key Takeaways:

• The report is based on three key assumptions: (1) the amount of load that will be added to the grid over the next five years, (2) the number of plants assumed to retire, and (3) the amount of new capacity added to the grid. The study used aggressive assumptions regarding load growth and retirements, but conservative assumptions about how much new generation capacity will be added, even assuming no new resources after 2026.
  • Load Growth: The report assumes 50 GW of data center load and allocates it regionally. It does not address flexibility of this load, however, which was recently demonstrated in a report from Duke University to allow for 100 GW of large load additions today with minimal grid impact. The DOE report then adds 51 GW of non-data center load, which means overall load growth by 2030 is 101 GW or 15%. For comparison, EIA assumed 6% growth in their Annual Energy Outlook 2025 high growth case. This is very aggressive load growth, although not necessarily unreasonable, as it is collected from each of the RTOs and utilities.
  • Retirements: The report assumed 104 GW of retirements by 2030, with 3/4 of this coal and 1/4 gas. But the most recent data from the U.S. Energy Information Administration released in June (the EIA 860) has just half of this capacity retiring. In the report, the DOE assumed these 50 GW of likely retirements, but included another 50 GW of announced retirements, inconsistent with their assumption around capacity additions. Most likely many plants will choose not to retire due to the changing regulatory and economic landscape, driven by the administration’s policies.
  • Capacity Additions: The report assumes just 22 GW of new “firm” capacity (narrowly defined as gas) is added which is based on NERC LTRA “Tier 1” – projects with a very high likelihood of success. The report assumes no projects are built post 2026, which is not realistic for a report forecasting to 2030. A more reasonable assumption for capacity additions is the EIA 860 released in June, which has 35 GW of gas additions, and another 53 GW of batteries – 88 GW of firm additions by 2030.
• The study ignores both utility plans for meeting increased load growth and how markets will respond. In fact, markets and utilities have already responded with plans to add new capacity and fast track new resources. These include PJM’s Reliability Resource Initiative, which plans on adding 11 GW of new firm resources by 2030. SPP and MISO both have proposals at FERC (called ERAS) that will likely add another 30 GW of firm resources. Those three regional efforts alone would add roughly twice what the DOE assumed for the entire nation.
• This national report attempts to address what is primarily a regional issue with regional solutions. A handful of regions face pressure due to rising load growth, and those regions have already enacted plans to address this growth. For example, MISO, SPP and PJM have all instituted “fast track” processes to get firm generation online (gas and batteries), which is expected to install 43 GW of new resources by 2030. The DOE report, however, shows just 13.5 GW of new firm resources in those three regions.

DOE Report Assumptions vs. U.S. Energy Information Administration Data:

Conclusion:

If the DOE report had used more consistent assumptions, it would have likely come to very different conclusions. Utilities and RTOs have planning processes and market mechanisms in place to build new resources in response to higher load growth and the retirement of older, uneconomic plants. The DOE’s solution to keep older units online past retirement dates is a crude and expensive approach. The DOE should defer to state planning processes and regional markets to meet the challenge.