No, resiliency arguments won’t save coal
DOE’s grid study misses the main future threats to system reliability and resiliency, SparkLibrary’s cofounder Alex Gilbert argues
After months of waiting for DOE’s controversial baseload study, with political lobbying and leaked reports galore, the energy world was braced for a groundbreaking study. Clean energy advocates worried that DOE was going to issue an inaccurate study claiming intermittent renewables were killing reliable baseload energy.
From their view, there were several reasons to be concerned:
Secretary Perry’s rhetoric in the memo requesting the study
The industry-bought nature of the current administration
The lack of coordination between the report writers and the actual people that run the grid, like ISOs or NERC or almost any other electric institution
General industry and political rhetoric surrounding the report.
Instead, the study that DOE finally released two weeks ago was…. boring.
Of the eight policy recommendations, five suggested that DOE or other federal entities do what they are already doing. Meanwhile, another two, “energy dominance” and infrastructure development, are largely about emphasizing the administration’s goals rather than providing any reason or pathway to fulfill those goals.
The final one, improved electric-gas coordination is a mixture of both: it suggests FERC and DOE do what they are already doing but also suggests that both agencies approve LNG export and cross-border natural gas pipeline applications to benefit commodity markets. The report does not otherwise discuss natural gas exports in any meaningful way so the latter part of this suggestion is completely unfounded.
These suggestions aside, the analysis of the report is neither new nor ground breaking. Apparently, as part of not knowing what DOE does, Secretary Perry did not read DOE’s masterful Quadrennial Energy Review. [1] Nor does he seem aware of FERC’s excellent primer on US energy markets. [2] Nor NERC’s long term reliability assessment. [3] Nor NAS’ recent study on Electric Sector resiliency. [4]
If he had read any of these, he would not have asked DOE staff to duplicate the work performed in those excellent analyses.
Please excuse my flippant and perhaps harsh tone. The DOE’s study is well written and well-researched. It is an excellent primer on how U.S. energy markets function in both theory and practice. If you have not followed the electric industry before, it is a great place to start. The focus on retirements is a new take, especially with well-selected data and graphics.
Like many reports or studies in energy, the chief problem with this study is not the study itself. Rather, it is the way this study will be used politically in ways that have no founding in its analysis or findings.
In a recent FERC confirmation hearing, a Congressman discussed how the study identified the need for financial support for coal and nuclear plants. [5] Meanwhile, the acting FERC Chairman is likely to tell Congress that FERC is examining new ways of valuing “essential reliability services”, a key term used throughout the DOE study. [6]
Essentially, despite the study finding reliability is not threatened by retirements, politicians and industry are trying to use it to create a reason to support coal financially (and, to a much smaller degree, nuclear).
Given the high-profile nature of DOE’s study, many people have already commented on it:
David Roberts from Vox notes the study finds that renewables do not reflect reliability and that concerns about political interference were largely unrealized (potentially due to the leaked draft); [7]
Stephen Lacey and Julia Piper from Greentech Media argue that every part of the electric industry can find parts of the report that favor their preset positions; [8]
Ray Gifford, a partner at law firm Wilkinson, Barker and Knauer, highlights how the report revealed ongoing tensions between state and federal policies for energy and environmental reasons; [9]
Utility Dive reporter Herman Trabish discusses how the report largely ignores the reliability and resiliency benefits of existing and new transmission, an absurd oversight in a reliability/resiliency study; [10]
Finally, Rocky Mountain Intitute’s Mark Dyson [11] and Tanuj Deora from Smart Electric Power Alliance [12] argue that new energy resources (especially distributed generation) can provide reliability and resiliency services that were largely overlooked in DOE’s study.
Both these and the many other articles on DOE’s report are useful and insightful. However, I want to highlight two interrelated points that I have not seen comprehensively discussed elsewhere.
