The energy reliability crisis that wasn’t
The Northeast is facing one of the coldest weather systems to reach our shores in years. Snow is piling up, as Americans from Maine to Georgia crank up their thermostats in response.
This is exactly what coal and nuclear industry executives warned us about in these pages yesterday: A severe weather system that they claim will bring our “fragile” energy grid crashing to the ground. They claimed that without subsidies for “reliable” coal and nuclear plants storing months of fuel on site, the eastern seaboard would be plunged into cold darkness.
No coal plants have had to be brought out of retirement, natural gas has met record-setting levels of demand admirably, and technologies like wind and demand response have further lightened the load on the power grid.
In fact, the only major threat to the grid has come from a supposedly reliable nuclear plant in eastern Massachusetts where a power line failure knocked the plant out of service. Thankfully, natural gas and hydropower easily filled the gap and not a single home has lost power, with a grid reserve triple what was needed to make up the loss.
All of which throws a frozen wrench into the Department of Energy’s wildly unpopular proposal to keep aging and uneconomic coal and nuclear plants alive through subsidies funded by American ratepayers.
A big part of the reason that the grid is performing well is that operators across the eastern U.S. — PJM and the Independent System Operators of New England and New York — have taken the lessons of the 2014 Polar Vortex to heart and built a strong and reliable system, no subsidies needed.
In particular they have enhanced system reliability over the last three years, by increasing the number of “dual fuel” plants that can switch between sources, hardening and burying transmission infrastructure, and requiring generators to guarantee reserve capacity. PJM, which supplies power to a region stretching from Illinois to New Jersey, is actually maintaining 40 percent excess generation capacity despite facing their highest demand levels since 2015.
Faced by this looming credibility gap, coal executives have begun pointing to dual fuel plants switching to oil, as a sign that the grid is under stress. Except that’s exactly what they’re designed to do, not out of desperation, but just to take advantage of temporary differences in fuel prices.
And while it is true that natural gas spot prices have temporarily spiked throughout the region, those price increases are short in duration with little impact on households and businesses energy bills, while subsidizing more expensive and uneconomic resources like coal and nuclear throughout entire the year is hardly a more cost-effective solution.
A better idea would be to expand and improve New York and New England’s outdated gas infrastructure to ensure that Pennsylvania shale gas can reach northern consumers cheaply and easily.
Unfortunately, the Energy Department’s proposal, which the Federal Energy Regulatory Commission is expected to respond to on Wednesday, fails to even mention that idea.
It’s an anticompetitive and politicized solution for a system that Department of Energy’s own analysis has concluded is reliable and improving.
Indeed studies of the Polar Vortex and hurricane impacts on Puerto Rico have found that in severe weather it is overwhelmingly power lines that are vulnerable, not gas supplies.
That’s one reason why virtually every regional transmission operator like PJM has reminded the Department of Energy that the Commission’s job is not to pick winners and losers based on politics. It’s to provide the lowest cost to consumers, by providing a stable and robust marketplace and encouraging innovation.
Coal and nuclear operators have a long track record of exploiting severe weather events to justify their favorite argument — never mind the nuclear plants forced offline by Hurricane Irma’s winds, the flooded coal piles during Harvey, and the coal plants knocked out by the Polar Vortex. This time is no exception.
Hopefully, the Federal Energy Regulatory Commission’s leaders will recognize the grid’s robust performance and reject this unnecessary and expensive solution to a problem that’s already been solved.
Dena E. Wiggins is president and CEO of the Natural Gas Supply Association, representing major integrated and independent natural gas producers in the United States.