EPSA President and CEO Todd Snitchler recently spoke at the winter meeting of the National Association of Regulatory Utility Commissioners (NARUC), where he discussed the need for a variety of energy resources to contribute to America’s grid, including both renewables and low-emission natural gas, and how competitive energy markets promote both reliability and low prices.
Reliability remains a key concern for energy consumers, and Snitchler said a mix of generation resources can help meet these needs as the grid becomes greener.
“While our members own assets using every type of resource and are eager to build more competitive renewable and zero-carbon generation technology, they could not do the most important job – providing reliable electricity – without our nation’s critical supply of natural gas,” said Snitchler, who went on to explain that in competitive electricity markets, companies must focus on the least cost reliable options.
“Today, that means a mixture of natural gas and competitive renewable resources,” he said.
Power generating companies across the U.S.—including EPSA members—have been investing in renewable generation technology to make the grid greener. But because many renewable resources like wind and solar only provide intermittent generation, natural gas generation will be needed to ensure a reliable power system.
According to a study EPSA commissioned in 2020 from Energy + Environmental Economics, 50-90 GW of firm, flexible natural gas generation will be needed to maintain system reliability in the PJM Interconnection footprint through 2045 – even under deep decarbonization scenarios.
Competitive Markets Deploy Innovative, Cost-Effective and Reliable Energy Solutions
In his remarks, Snitchler stressed that competitive markets are the best way to encourage the development of cost-effective and reliable generation resources.
“Ultimately, we believe that energy solutions should put consumers first, finding the most cost-effective path to reduce emissions without sacrificing reliability. In addition to its reliability benefits, natural gas is also part of a least cost transition,” he said.
To demonstrate how competition is encouraging innovation, Snitchler highlighted the Fairview Energy Center, a new project by Competitive Power Ventures, which uses advanced turbine technology and digital software from GE to more efficiently manage operations. It is the first and only facility of its scale to blend ethane with natural gas – deploying technologies that are more than twice as efficient as older plants.
Policymakers Should Prioritize Reliability and Competitive Approaches
This investment is another example of how competitive markets have led to significant emissions reductions over the past two decades. As policymakers consider how to decarbonize the U.S. grid, they should look to policies that have already been effective in encouraging the transition to lower-carbon and lower-cost electricity.
“Allowing all resources to compete to reduce emissions while serving reliability needs will best ensure that we can meet the growing demand for electricity while managing costs and keeping the lights on,” said Snitchler.
This is something for regulators at RTOs and markets across the country to consider as they address changes to capacity market design, he explained. A sustainable energy future should not only reduce emissions, but also avoid undue energy cost increases or threaten reliability.
That goal will require pairing environmental sustainability efforts with existing reliable natural gas technologies to ensure that reliability is not sacrificed. Though America’s electricity generation sources and uses are transitioning, this process is not happening all at once. In the meantime, regulators and industry must work together to ensure that all Americans have the reliable and affordable power they need.
“The energy landscape is changing, but not on a dime. The pace of the transition must be in lockstep with reality and what is needed to protect reliable electric service and public health and safety,” Snitchler emphasized.