Want to pay more for power to keep coal afloat? You may have to
Secretary of Energy Rick Perry may soon order Americans to pay more for electricity to keep his boss’s promises to coal miners, nuclear power plants and electric companies.
Our former governor asked his agency to review whether the increasing percentage of renewable energy sources on the grid presents a threat to reliability. This is a talking point pushed for years by the owners of coal-fired power plants and nuclear reactors that are no longer competitive with cheap natural gas and renewable energy generators.
In what is clearly a fait accompli, Perry ordered the Energy Department in April to consider “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.”
“The result of this analysis will help the federal government formulate sound policies to protect the nation’s electric grid,” it added. In other words, Perry is looking for an excuse to override competitive electricity
markets and force utilities to buy power from coal and nuclear plants.
He can do that under a little-known law that allows the secretary of energy to declare a national reliability emergency. Perry could force utilities to buy a certain percentage of power at a particular price from coal and nuclear plants, thus guaranteeing work for coal miners and profits for the corporations that own the plants.
Such an order, though, would blow up the wholesale competitive electricity markets that have kept U.S. electricity prices so low and destroy the renewable energy industry in the U.S.
Critics of renewable energy will argue that subsidizing coal and nuclear power would level the playing field with wind and solar energy, which receive federal production and investment tax credits. Perry and former President George W. Bush supported those credits in the 2000s to help those technologies reach maturity.
Today, it is cheaper to generate electricity from wind turbines and solar panels than to build new coal plants, which is why Congress is phasing out renewable energy tax credits by 2020. No one expects Congress to extend them again.
The only gambit for old and expensive coal and nuclear plants is to limit the growth of renewable sources by claiming they threaten reliability. But that’s simply a lie.
Three technical reports from the independent North American Electric Reliability Corp., energy analysis firm Brattle Group and the pro-renewable Advanced Energy Economy Institute all have concluded that wind and solar energy do not endanger the U.S. grid’s resiliency or reliability.
Renewable energy sources have grown from 2 percent of generation in 2005 to more than 10 percent in March, and by every measure, the U.S. electric grids have only improved reliability. The North American Reliability Corp., a nonprofit charged with keeping America’s lights on, found that California has proved that grid managers have the tools and skills to safely rely more on renewable energy.
Texas has more wind power than any other state, and the grid manager ERCOT continues to accept more renewable generation while guaranteeing reliability.
The Brattle Group, which Texas officials use to forecast power needs and advise on ERCOT’s wholesale market, concluded that new grid management technologies and clean energy sources are making baseload nuclear and coal-fired power plants obsolete.
“As some of the coal and nuclear power plants face retirement decisions, focusing on their status as baseload generation is not a useful perspective for ensuring the cost-effective and reliable supply of electricity,” Brattle Group concluded.
Meanwhile, coal-fired power plants are so uneconomical that no generator is considering building a new one. Nuclear power, either from old or new plants, is so expensive that it’s only viable if subsidized by electricity customers. Neither coal nor nuclear can survive a free, competitive market.
President Donald Trump, though, was elected promising to save coal industry jobs and many of his supporters own coal and nuclear plants that are on the verge of closure. That’s why Perry ordered his own review of the grid to reach conclusions that suit the administration.
Until last week, one of the biggest lobbies against propping up coal and nuclear was the one for natural gas producers, who are the real reason electricity prices are so cheap. But the Trump administration threw them a bone by promising to allow more exports of liquefied natural gas, which will drive up prices and reduce the current glut.
All of these measures will ruin decades of work to make electricity generation a competitive market, and consumers will pay higher prices not only on their electricity bills, but on everything that requires energy to manufacture.
Perry is poised justify the higher prices as necessary to make sure the electric grid is reliable and to ensure energy dominance. Don’t believe it.
Trump intends to keep his promises to coal miners and enrich the owners of coal and nuclear power plants. And he’s going to make you and me pay for it.