Message on electricity: Dependability counts
COMPETITION: Energy Department’s study says grid shouldn’t undervalue the need for coal and nuclear plants
The Energy Department issued a long-anticipated report Wednesday that stresses the need to protect the “resilience” of the nation’s power grid by valuing dependable resources such as coal and nuclear more in power markets, according to the head of a coal trade group.
The report, commissioned by Energy Secretary Rick Perry, who warned that policies favoring renewable power may be forcing the shutdown of plants and threatening the grid, highlights how markets should evolve to ensure that the U.S. has enough electricity to keep the lights on during extreme events, said Paul Bailey, chief executive officer of American Coalition for Clean Coal Electricity. The study also details how market and policy forces have contributed to plant retirements, Bailey said.
The agency’s study comes at a critical time for nuclear and coal power producers fighting for government help to stay afloat as weak demand and competition from natu-
ral gas, as well as solar and wind energy, squeeze their profits. These generators have been counting on the findings to help make their case for aid. Perry ordered the report in April, warning that subsidies and policies enacted before President Donald Trump took office may be forcing the shutdown of plants such as nuclear and coal generators.
Federal regulators are “going to have to value these resilience attributes” of dependable resources, especially coal plants that can store enough fuel on-site to last months, Bailey said.
“Coal stacks up really well. Natural gas does OK. Nuclear does pretty well. Renewables don’t do well in some respects and do OK in others.”
John Shelk, president of the Washington-based Electric Power Supply Association, said ensuring the resilience of the U.S. grid doesn’t simply mean handing out subsidies for coal and nuclear plants.
“Coal and nuclear want resilience to be a code word to subsidize them when they can’t compete,” said Shelk, whose group represents power generators such as NRG Energy and Dynegy. “That’s a warped view of resilience. All fuels, technologies and attributes should be considered together.”
An early draft of the agency’s study concluded that the grid was more reliable than ever, but suggested that the Federal Energy Regulatory Commission — which oversees the nation’s electricity markets — could play a role in preserving so-called baseload plants that supply around-the-clock power. The report was written by the department’s staff and didn’t undergo a rewrite at the political level, a person familiar with the final version said, asking not to be identified.
Bailey’s comments echo those recently made by Neil Chatterjee, who was tapped by Trump to temporarily lead the Federal Energy Regulatory Commission. Chatterjee said last week that coal-fired plants are a crucial part of America’s energy mix that needed to be “properly compensated to recognize the value they provide.”