Administration wants to study how wind and solar shaking up the grid

Those subsidies create acute and chronic problems for maintaining adequate baseload generation and have impacted reliable generators of all types. Rick Perry, Energy Secretary

Energy Secretary Rick Perry has directed his department to conduct a wide-ranging study of the US electric grid, with a particular emphasis on recent coal and nuclear plant closures and whether environmental policies may be driving them.

In a Friday memo, Perry asked his chief of staff to undertake a 60 day inquiry into “the extent to which continued regulatory burdens, as well as mandates and tax and subsidy policies, are responsible for forcing the premature retirement of baseload power plants,” such as those fuelled by coal or nuclear energy, among other grid related questions. The memo was first reported by Bloomberg News.

Yet even this seemingly dull inquiry has stirred controversy in a Trump administration in which nearly all moves that touch on energy and the environment are matters of contention. While framed as an inquiry into policies that will ensure the resilience of the electricity grid, Perry’s focus on so- called “baseload” generation - power plants that produce a steady, controlled stream of electricity - appears to create an opposition with fast- growing wind and solar. These sources by definition are variable or “intermittent,” providing energy only when the sun is shining or the wind is blowing.

Many states have adopted policies to advance renewable energy, and federal tax incentives also further support wind energy production and solar energy investment. California, in particular, has embraced extremely ambitious clean energy policies, even as nuclear energy in the state is set to be phased out entirely.

Other states have not been so direct, but nonetheless, coal plants have been shutting down in droves even as multiple nuclear plants have also opted to wind down operations in the past five years, citing difficult market structures and competition from low-priced natural gas.

The causes of these changes are complex, but the Perry memo seems to imply that clean energy “subsidies” own part of the blame. “Analysts have thoroughly documented the market- distorting effects of federal subsidies that boost one form of energy at the expense of others,” Perry’s memo notes. “Those subsidies create acute and chronic problems for maintaining adequate baseload generation and have impacted reliable generators of all types.”

But renewable energy supporters argue back that that’s an unfair focus.

“There is no power source that doesn’t benefit from federal and state incentives, so it’s highly unlikely that coal and nuclear are becoming uncompetitive due to incentives for renewable energy,” said Abigail Ross Hopper, the president and chief executive of the Solar Energy Industries Association. “The reason they are becoming less competitive is that they cost more to build and operate.”

“Most independent studies show that low natural gas prices are overwhelmingly responsible for the market challenges facing coal and nuclear plants,” added Tom Kiernan, chief executive of the American Wind Energy Association.

“This is confirmed by data from electricity market monitors, SEC disclosures by coal and nuclear plant owners, and the simple fact that the vast majority of coal and nuclear retirements are occurring in regions with the least wind generation.”

Hopper also argued that when it comes to the grid, the change has just begun.— WPBloomberg