The Next Winter Reliability Crisis is Almost Here

It may have been a balmy 80 degrees in the nation’s capital this week but make no mistake, winter is coming and with it ever-greater concern about the perilous state of the nation’s electricity grid.

For all the white knuckling from grid operators during summer months, when heat waves and record demand stressed power supply across the country, it’s the winter that is beginning to pose the even larger reliability challenge in much of the country. The rapid loss of dispatchable fuel diversity, ever-greater reliance on variable power and the increasingly shaky performance of the natural gas system during biting cold has grid operators and utilities increasingly nervous.

The near-grid collapse in Texas during winter storm Uri in 2021 was no anomaly. Blackouts – or the alarming threat of them – are becoming unnervingly common and there’s no cavalry racing to the rescue. Indeed, a deeply worrying situation shows every sign of fully unraveling with misguided – even dangerous – state and federal regulatory policy shouldering much of the blame.

While warnings over the threat posed by the loss of dispatchable sources of generation – namely fuel-secure coal power – aren’t new, concern has reached a fever pitch over the past few months. Grid operators, utilities, co-ops and even the nation’s federal energy regulators have made it abundantly clear we are teetering on the edge of catastrophe.

Too Fast

The refrain is the same: the closure of essential generating capacity – notably coal capacity – is happening too fast with reliable replacement capacity and enabling infrastructure not materializing at nearly the speed needed.

Jim Robb, president and CEO of the North American Electric Reliability Corporation (NERC), told Congress earlier this year that “the pace of change is overtaking the reliability needs of the system.”

The Federal Energy Regulatory Commission’s (FERC) Mark Christie told the Senate Energy and Natural Resources Committee, “the United States is heading for a reliability crisis. I do not use the term ‘crisis’ for melodrama, but because it is an accurate description of what we are facing.” He added, “the core problem is this: dispatchable generating resources are retiring far too quickly and in quantities that threaten our ability to keep the lights on.”

FERC Commissioner James Danly added, “we know that there is a looming resource adequacy crisis. Our market operators have been explicitly telling us as much for years.”

Even FERC Chairman Willie Phillips, President Biden’s pick, said, “I am extremely concerned about the pace of retirements we are seeing of generators which are needed for reliability on our system. NERC and the grid operators have warned us about this.”

Just last Christmas, much of the country narrowly averted catastrophe.

Winter storm Elliot forced rolling blackouts in several states and pushed several regional grids into emergency conditions. A stunning 90.5 GW, or 13%, of the generating capacity in the Eastern Interconnection — the grid system covering two-thirds of the U.S. — failed to run or operated at reduced capacity during the storm.

Gas-fired capacity accounted for 63% of the outages.

The gas system is an Achilles’ heel for grid reliability during bitter cold but little has been done to address it while the importance of gas infrastructure to keeping the lights on and homes warm only grows as more and more coal capacity is forced off the grid. We’re in effect putting ever more eggs in the natural gas basket when it’s the one place where federal regulators have the least authority to guarantee performance. Unlike the electric grid and power plants, there are essentially no mandatory federal reliability standards for the entire natural gas system.

The reliability of the nation’s power supply increasingly seems to rest on the hope that when renewable sources of power are unavailable during inclement weather and bitter cold drives surging gas demand, the gas system doesn’t buckle. Hope is hardly a strategy.

Instead of hand-wringing and bulk shopping for rabbits’ feet, it’s far past time to recognize the critical importance of the fuel security and dispatchable fuel diversity provided by the coal fleet. More than ever, we need the resiliency provided by winterized coal plants with months of fuel on site. Embracing their importance, pushing back on an irresponsible regulatory agenda and ensuring markets have the mechanisms to properly value the attributes coal capacity brings to our energy systems is essential. Doing so is a reliability strategy we can’t wait another winter to pursue.