Trust Us, We’ve Got This

June 6, 2018

What emergency? That’s the message we keep hearing from critics of the Trump administration’s plan to boost the reliability and resiliency of the nation’s grid. Sure, these critics admit, we’ve lost half the nation’s coal fleet since 2010 and dozens more coal plants are teetering on the edge of premature retirement. And yes, half of the nuclear fleet is in jeopardy of early retirement but trust us, we’ve got this under control.

Do you?

It’s a question Secretary Perry and President Trump are rightfully uninterested in leaving to the whims of an electricity marketplace that simply doesn’t appropriately value reliability and resilience. The loss of the nation’s baseload generation – at unprecedented speed – should be concerning. Something is very wrong and modelling and opining from experts aside, it doesn’t take a Ph.D. to see the value in pumping the breaks and exercising caution. Change isn’t necessarily cause for concern but the speed at which we are moving raises more questions than anyone should claim to have answers.

Perhaps the grid and grid operators can successfully integrate increasing amounts of intermittent renewable sources of energy. And perhaps we can increasingly put our eggs in the natural gas basket without threatening reliability, but the evidence – plain for all to see – suggests otherwise.

Just last week, RTO Insider reported that the North American Electric Reliability Corporation (NERC) warned that ERCOT and CAISO will face operational challenges and reliability concerns this summer due to the Texas grid’s loss of baseload generation and California’s lack of fuel assurance. Texas is going to face a generation shortfall because of the loss of 4,500 MW of coal capacity and California was an early gatherer of eggs for the aforementioned natural gas basket. The warning signs are everywhere if you’re willing to read them and connect the dots.

And recall the “bomb cyclone” that wreaked havoc on the Northeast this past winter. The U.S. Department of Energy’s National Energy Technology Laboratory (NETL) examined the performance of the grid during the storm and came to an inescapable conclusion:

“U.S. electricity marketplace experience demonstrated that without the resilience of coal plants — its ability to add 24-hour baseload capacity — the eastern United States would have suffered severe electricity shortages, likely leading to widespread blackouts.”

Extreme weather has a funny way of magnifying the weaknesses in our power grid. And while the wheels didn’t come off during the “bomb cyclone,” the cavalry that came to the rescue – the coal fleet – won’t be around for much longer unless we act.

NETL’s analysis found that as temperatures dropped and demand for power soared, coal provided 55 percent of the incremental daily generation needed. Much of that lifeline capacity could be lost this year. Another 13,500 MW of coal capacity is slated for retirement unless something gives and give it must.

Still many claim there is no problem. The day after PJM Interconnection – one of the most vocal critics of intervention – posted a blog lauding how “free-enterprise competition” was securing “historically low wholesale electricity prices,” PJM’s capacity price jumped 83 percent at its annual auction.

Far too much attention is being given to how the administration plans to tackle reliability as opposed to focusing on why it’s acting. Must we wait for a blackout or an economy-crippling crisis before we act? The arrogance and self-assurance of critics who keep telling us there is no crisis, just yet, is nauseating when time and again we slam into the fallibility of human engineering.

The administration is right to act. The reliability and resilience of the nation’s electric grid can’t be left to chance. That there’s much debate about that fact is concerning in itself.