TODD SNITCHLER, PRESIDENT AND CEO, EPSA, FOR THE HILL
Most of the United States could experience blackouts if we see above-normal summer conditions, according to the North American Reliability Corporation (NERC). The fast-paced retirement of firm power generation and flat growth in anticipated resources are major contributors to the threat of increasing grid instability, which could result in electricity shortages. Poor policy choices have prevented the marketplace from keeping a balanced energy portfolio that is able to supply the energy needed for increasing demand no matter the weather. And somehow, despite NERC’s assessment being the latest in a string of warnings about resource inadequacy, the EPA recently proposed a rule that would force additional retirement of generation or require fuel switching paired with carbon capture. If finalized, this rule would put additional strain on the power grid and increase costs in the midst of an already challenging energy transition.
Warnings of mounting reliability challenges have been issued with every peak demand season over the last two years. It’s normal to see the demand curve spike during the winter and summer seasons, but the supply curve hasn’t kept pace, due in large part to federal and state policy interventions designed to accelerate the energy transition. Competitive energy markets are being flooded with renewable generating capacity stuck in interconnection queues that are supported by those policy incentives, which are also prematurely retiring the continued operation of conventional resources that keep the grid functioning.
FERC Commissioner Mark Christie described this problem to the Senate Energy and Natural Resources Committee early this month, noting “one nameplate megawatt of wind or solar is simply not equal to one nameplate megawatt of gas, coal or nuclear.” And his colleague Commissioner James Danly testified that “as the wholesale markets’ prices are distorted by subsidies, the generation assets with the attributes required for system stability will retire and system stability will be imperiled.” He concludes that if the math in interconnected markets can’t naturally course correct through proper market forces that accurately reflect costs and value to the system, we will have more of the same reliability issues.
The EPA’s proposed rule would exacerbate the problem by making a historically expensive and largely untested technology mandatory, and making it likely that many natural gas and virtually all coal plants will be forced to shut down without any clear plan to replace the electricity they generate or the flexibility they provide in a reasonable time frame. And at a time of dwindling reliability and early retirements, it could mean that the reliability crisis arrives as soon as the rule goes into effect . . .
Read more at TheHill.com.
