Trump’s coal pro­posal is po­lit­i­cal, not eco­nomic

Houston Chronicle - - OUTLOOK - By David Spence Spence is a pro­fes­sor of en­erg y law and reg­u­la­tion at The Univer­sity of Texas at Austin.

The De­part­ment of En­ergy and Fed­eral En­ergy Reg­u­la­tory Com­mis­sion are cur­rently de­bat­ing a rule de­signed, in part, to sub­si­dize coal-fired power plants that have strug­gled to com­pete with less ex­pen­sive gas-fired, wind and so­lar gen­er­a­tors in elec­tric­ity mar­kets.

The Trump ad­min­is­tra­tion says the sub­si­dies are nec­es­sary to en­sure sys­tem re­li­a­bil­ity. They are not.

In­stead, this pro­posal is a sym­bolic po­lit­i­cal ges­ture, only un­der­stand­able as a sop to coal com­pa­nies and a swipe at en­vi­ron­men­tal­ists and the Obama ad­min­is­tra­tion.

Which is not to sug­gest we shouldn’t worry about the re­li­a­bil­ity of the elec­tric sys­tem. There are le­git­i­mate ques­tions to be asked about how com­pet­i­tive mar­kets will en­sure a re­li­able elec­tric sup­ply since, un­like tra­di­tional pub­lic util­ity reg­u­la­tion, com­pet­i­tive mar­kets do not of­fer power plant own­ers pre­dictable streams of rev­enue that make them want to build a plant in the first place. Plus, as in­ter­mit­tent re­sources such as wind and so­lar com­mand a larger share of the gen­er­a­tion mix, the sys­tem will un­doubt­edly need more re­li­able backup sup­plies.

That said, grid op­er­a­tors un­der­stand this risk and are man­ag­ing it well all over the coun­try. From Cal­i­for­nia to Texas to Min­nesota, they have been able to in­te­grate much larger amounts of re­new­able power into the grid than any­one thought pos­si­ble, with­out jeop­ar­diz­ing re­li­a­bil­ity. And they are plan­ning for the fu­ture too — al­beit dif­fer­ently in dif­fer­ent places.

In some parts of the coun­try mar­ket man­agers hold auc­tions for the ex­cess ca­pac­ity they might need in an emer­gency. Some re­gions en­cour­age de­mand­side mea­sures, re­ward­ing cus­tomers who con­serve, or who are will­ing to shift their elec­tric­ity con­sump­tion from peak to off-peak pe­ri­ods. Oth­ers are en­cour­ag­ing “be­hind the me­ter” (cus­tomerowned) gen­er­a­tion such as rooftop so­lar pan­els, while still oth­ers are in­stalling bat­ter­ies and other forms of elec­tric­ity stor­age to im­prove sys­tem re­li­a­bil­ity. And, some states are sub­si­diz­ing old nu­clear power sta­tions to en­sure they don’t leave the sys­tem.

Why sub­si­dize nu­clear and not coal? Be­cause nu­clear does not kill tens of thou­sands of Amer­i­cans pre­ma­turely each year. Coal does.

Coal com­pa­nies and their pa­trons in the Trump ad­min­is­tra­tion sug­gest coal­fired power plants are more re­li­able be­cause they main­tain a fuel sup­ply on site, while nat­u­ral-gas-fired power plants ob­tain their fuel in real time through the pipe­line sys­tem. But this too is a red her­ring: Ship­ments of coal by rail are as in­ter­rupt­ible as ship­ments of nat­u­ral gas by pipe­line. For ex­am­ple, Hur­ri­cane Har­vey forced one Texas coal plant to switch to gas when its coal pile be­came sat­u­rated and un­us­able.

The truth is that we do not need coal­fired power to en­sure sys­tem re­li­a­bil­ity, a re­al­ity that is widely ac­cepted by ex­perts across the po­lit­i­cal spec­trum. The grid of the fu­ture will value flex­i­bil­ity — the abil­ity to re­act quickly to sud­den changes in de­mand or sup­ply. Coal-fired power plants can’t do that.

Bat­ter­ies, nat­u­ral-gas-fired gen­er­a­tion, pumped-stor­age hy­dro­elec­tric power and de­mand re­sponse are nim­ble and flex­i­ble. And, by the way, a lot cleaner than coal. Those sources are all go­ing to be far more valu­able in the fu­ture than old coal-fired power plants, as vir­tu­ally every grid op­er­a­tor in the coun­try knows.

Sec­re­tary of En­ergy Rick Perry un­der­stands this too. He was the gover­nor when Texas devel­oped the coun­try’s most com­pet­i­tive elec­tric­ity mar­ket, one in which reg­u­la­tors do less to sub­si­dize re­li­able gen­er­a­tors than any other mar­ket.

So why would fed­eral reg­u­la­tors now want to force cus­tomers to forgo cheaper sources of elec­tric­ity from nat­u­ral gas and the sun and the wind in fa­vor of dirt­ier, dead­lier coal-fired power? From a pol­icy per­spec­tive, this pro­posal makes very lit­tle sense. It makes much more sense as an ex­pres­sion of op­po­si­tion to the left.

If you want to un­der­stand this pro­posal, start by look­ing up the phrase “rolling coal.” You’ll see that this rule is noth­ing more than a point­less, cathar­tic ges­ture, merely a way for the ad­min­is­tra­tion to act out the elite equiv­a­lent of rolling coal. If en­acted, this rule would not only waste time and money, it would need­lessly pol­lute the air and pre­ma­turely kill thou­sands of Amer­i­cans in the process.

Wil­liam Luther / San An­to­nio Ex­press-News

Coal plants’ sup­plies are vul­ner­a­ble to ship­ment in­ter­rup­tions and weather dam­age.

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