Risk 6:
Material and Equipment Unavailability
HIGH RISK
Risk Overview
Description:
Rising demand to replace aging infrastructure and build new generation and transmission has strained global supply chains beyond historical norms. Additionally, utilities are facing unprecedented competition for electrical equipment and expert labor, primarily driven by the rapid expansion of large-scale data centers. Significant lead times (in some cases 7+ years) for critical components like power transformers and circuit breakers, limits utilities’ ability to quickly replace failed assets or address security vulnerabilities.
Key Drivers and Trends:
- High global demand for electrical equipment to replace aging infrastructure and support the buildout of transmission and generation projects.
- Limited global production capability, especially of specialized equipment like large substation transformers.
- Ability to ramp production to meet increasing demand is limited as utilization rates are maxed out.
- Lead times for large substation transformers increased from one to two years before 2020 to more than five years in 2024.
Actions to Reduce Risk:
The following mandatory NERC Reliability Standards exist, or are under development, to help mitigate this risk:
|
NERC Reliability Standard(s) |
Mitigating Activities |
|---|---|
|
TPL-001-5.1 (Transmission System Planning Performance Requirements) |
Requires utility companies to have a plan in place for outages related to long equipment lead-times, which might include relying on shared spare equipment inventories. The standard requires an assessment of expected equipment lead times greater than one year, but does not require a firm solution to be in place to address the risk, limiting the standard’s effectiveness. |
|
CIP-003-9 (Security Management Controls) CIP-014-3 (Physical Security) |
Sets recovery plans and resiliency measures for cyber equipment protecting operational control systems. However, the standards are limited to equipment classified as a Bulk Electric System cyber systems and do not apply to all devices that are used in system operations, including transmission lines and substation transformers. |
Other recommended actions include:
- Participate in spare equipment sharing programs to address unexpected failures of critical equipment.
- Develop and maintain good relationships with vendors of critical equipment to improve visibility and collaboration to address material and equipment shortages as they occur.
- Where possible, maintain higher levels of equipment inventory or have a well-established pipeline for equipment that may become in short supply or is needed due to unexpected failures.
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