The past eight years have seen Washington’s regulators knocking America’s coal industry to the ground. Now, however, the Trump administration is setting policies to help coal get back on its feet. And though this has led to a boost for one of America’s most reliable sources of power generation, President Trump’s critics are crying foul.
What exactly is causing this hysteria among the president’s detractors? Simply that the administration is trying to steer domestic energy policy back toward a sensible middle course.
Recently, Energy Secretary Rick PerryRick PerryRepublicans are the 21st-century Know-Nothing Party College football move rocks Texas legislature Trump tries to spin failed Texas endorsement: 'This was a win' MORE requested that the Federal Energy Regulatory Commission (FERC) issue a rule directing markets to acknowledge the “reliability” and “resilience” of baseload power plants. Typically, the lowest-cost energy option gets priority access to power transmission. Perry is urging a new pricing mechanism that would capture the neglected value that coal and nuclear plants offer to the nation’s electric grid.
These plants maintain on-site fuel supplies that enable them to remain operational despite disruptive events like extreme weather and other logistical challenges. While no energy infrastructure is failsafe, coal plants are less vulnerable to weather-related disruptions, and their fuel is more easily protected.
The overall issue is strengthening the reliability of the nation’s power grid. Notably, America has experienced an unprecedented decline in baseload power generation since 2010. More than 60 gigawatts of coal capacity has been lost — enough electricity to power 40 million homes. By 2020, that total is projected to reach estimated 80 gigawatts.
Experts at IHS Markit warn that America’s power grid is becoming “less cost-effective, less reliable and less resilient.” And the North American Electric Reliability Corp. observed in May that “premature retirements of fuel-secure baseload generating stations reduces resilience to fuel supply disruptions.”
Perry’s proposal addresses this problem by recognizing the full value that baseload power plants offer for safeguarding our electricity system. But detractors dismiss it as a subsidy to coal and nuclear — and an unnecessary intervention in the energy market. They question if there is a “reliability crisis” to justify such action.
These objections are hollow. The wind and solar industries receive production tax credits courtesy of U.S. taxpayers, plus a guaranteed market share thanks to the 29 states that mandate renewable fuel standards imposed on utility companies.
Thus, the criticisms of skeptics appear shortsighted. There may not be a grid crisis now, but one may come along unless prompt steps are taken to prevent it.
Renewable energy advocates should understand why such precautions are necessary. They argue that, while climate change may not present a crisis today, it will tomorrow unless costly measures are taken to curb carbon dioxide emissions. The same preparatory logic should also hold for measures to ensure grid reliability.
Perry’s proposal to bolster baseload generation is little different than an insurance policy for one’s home or auto. It’s a modest cost to insure against lower probability but high-impact events such as power shortages and blackouts.
There’s a precedent here, since weather events that merely threatened the grid in recent years could severely damage it in the future. Consider the troubling lesson of the “Polar Vortex” in the harsh winter of 2014. Fewer than a dozen coal plants ran full-tilt and non-stop to prevent parts of the Eastern U.S. from going dark and losing home heating. Worryingly, every one of these plants was slated for eventual retirement under Obama administration regulations.
Perry appropriately asks if we are prepared for the next Polar Vortex. His proposal simply addresses such scenarios.
As Washington grapples with the complexities of the climate debate, it’s worth noting that U.S. greenhouse gas emissions are already falling sharply. So, if further reductions are required, it’s far better to reduce them with high-efficiency, low-emission technologies. Deploying these advanced systems in the nation’s power plants, and encouraging their deployment in the developing world, could bring substantial improvements in power generation and emissions reductions for relatively little cost.
In contrast, taking baseload power offline could mean a cascading series of problems for America. And so, maintaining grid reliability deserves pragmatic solutions. Thankfully, the new administration is taking it seriously.
Terry M. Jarrett is an energy attorney and consultant who has served on both the National Association of Regulatory Utility Commissioners and the Missouri Public Service Commission.