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How the Installed Reserve Margin Supports Reliability in New York

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How the Installed Reserve Margin Supports Reliability in New York

March 30, 2022

State and federal regulators recently accepted the new Installed Reserve Margin (IRM) for New York’s power grid. The annually established IRM is an essential element of New York’s reliability rules that require a percentage of supply resources to be available to the grid in addition to forecasted peak demand. 

To find out what the IRM is and why it’s a vital figure for maintaining reliability on the grid, read on.

The IRM is a percentage of available supply, including demand response and energy storage. When issues occur such as a generator shutting down or a transmission line going out of service, we need sufficient resources available to keep the lights on across New York. 

Consumers may also need more power than we expected, like on a hot summer day when air conditioners are turned up, so ready supplies need to be available to meet their needs. This margin is essential to support reliability.

The IRM is set annually by the New York State Reliability Council (NYSRC), based on reliability rules, annual peak demand projections, grid constraints, and the makeup of the supply mix anticipated to meet demand. 

For the next capability year, which begins May 1, the council recommended an IRM percentage of 19.6%. That percentage means that the system needs to have on hand enough resources to meet consumers’ expected peak demand on the hottest summer day, plus 19.6% more in case demand goes higher or a generator or transmission line trips off.

Developing the IRM is an extensive study process that unfolds over much of the year. The IRM is based on updated load, resource, and transmission models. It is derived by engineers, meteorologists, and economists, using strict reliability rules, engagement with industry stakeholders, and oversight from regulators. Input includes information from NYISO planning, which evaluates changes in forecasted demand, supply performance capabilities, and transmission system constraints. 

All these inputs are fed into a computer model of the entire electric system that looks at the probabilities of higher demand and facilities going off-line. The NYSRC evaluates these estimates and submits its determination to both the New York Public Service Commission and the Federal Energy Regulatory Commission for acceptance.

The whole process is one of the key planning elements that contributes to New York operating the grid to the most stringent reliability criteria in the nation.

How do we use the IRM? For the 19.6% IRM, we projected a peak demand (the highest demand load, generally on a hot day in summer) of 31,767 megawatts (MW). To meet this demand and to comply with regional reliability rules, we’ll need to have 19.6% more than that available in our Installed Capacity Market, or a total of about 37,993 MW. Through this market, resources are essentially paid to be available when needed, and that availability is critical to keep the grid operating.

In years past, most energy on the grid came from dispatchable resources capable of operating “on-demand” with a high capacity factor. These include nuclear, hydropower, and gas turbines, which you can generally count on to be available when the system needs them.

However, with the state moving to a grid increasingly reliant on clean energy, the IRM will also change (while remaining critical to system reliability). Solar and wind are intermittent resources that don’t respond on demand. Solar power is affected by season, as well as by cloudy weather, and, of course, won’t operate at night. Wind power is also dependent on seasonal and daily weather changes. As a result, these resources have lower capacity factors.

While energy storage, like batteries and pumped hydro, help meet unexpected demands for power, current technologies can only run for a limited number of hours. Due to the intermittent nature of renewables, we will need new “on-demand” resources to supplement wind, solar and storage. As we move to increased renewable resources under the Climate Leadership and Community Protection Act, we will need these fast-ramping, on-demand resources to respond to requests from grid operators.

The NYISO’s job is to see this need coming and prepare for it. We are already studying what the energy grid of the future will look like, and how to maintain system reliability for all New Yorkers when that time comes.


For more about how we are addressing a zero-emissions grid, visit the 2040 Power Grid webpage

We are an independent, not-for-profit corporation responsible for operating the state’s bulk electricity grid, administering New York’s competitive wholesale electricity markets, conducting comprehensive long-term planning for the state’s electric power system, and advancing the technological infrastructure of the electric system serving the Empire State.

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