Department of Energy Coal Bailout Rejected: Told to Get the Facts First

The Trump Administration got a punch in the nose trying to overthrow energy markets and deprive consumers of the savings created by lower cost, competitive energy supplies. All five Federal Energy Regulatory Commissioners, four of them appointed by Donald Trump, rejected an open-ended bailout proposed by Energy Secretary Rick Perry.

Not the end, a beginning

The unanimous Commission decision starts a fresh look at what can threaten the power grid, and what is already being done, this time within the legal system that applies to energy markets. Going forward, FERC will look for a common understanding of resilience, and will ask the organizations that operate the power pools through independent wholesale markets, not monopolies.

The Commission asks over 25 questions to the independent grid operators that serve two thirds of the US population (New England; New York; the PJM region from Northern Illinois across the Ohio Valley to the Mid-Atlantic states; as well as the California ISO, the Midcontinent ISO and the Southwest Power Pool that have operated with very high levels of renewable energy).  Not included in this inquiry are the power pools in the Pacific Northwest, Texas, or the mountain states and southeast region of the U.S., areas where grid operators have not formed an independent system operator subject to Commission market rules.

Time for questions and answers

The Commission poses questions about existing practices, and market-based services that already support resilience. There are questions about how the grid operators assess the resilience of the grids they operate. The Commission asks if there have been studies about resilience in the face of threats, what sorts of threats have been studied, and how these kinds of events are selected. The grid operators are asked to explain their criteria for events, the basic methods for understanding threatening events, and useful preparations or practices for withstanding such events.

This assignment for the grid operators continues, asking what attributes of the power system contribute to resilience, and what design standards are in place, as well as how different generation types perform in drought and other extreme weather, physical attack, or cyber threat. Then the public and UCS can comment on the grid operators’ answers.

What will we say?

First, FERC is right to start with the power pool operators, as these were set up to make the electricity supply better, cheaper, faster.  Grid reliability can be improved, coal plants can be retired. Let’s gather up-to-date information. Unlike the proposal from the Trump Administration to rush a multi-billion dollar cronyism scheme, this is something worth discussing. We depend on electricity, the grid has weaknesses and signs of aging, and the threats to reliability are real. So yes, let’s consider how we can improve what we have built.  Better to look for needs first, and then ask what is available to fill these needs.

Wind and Solar Offer Resilience

Grid support from offshore wind is real in New England. We will urge the grid operators to look West, and to the Plains, where higher levels of wind and solar have provided new ways to make the grid resilient.

Using renewable energy brings the opportunity to forecast the impacts of weather, in more complex and subtle ways. The California ISO was first to implement wind forecasting, beginning in 2004.  The regional grid operators of Texas, New York ISO, and the Midcontinent ISO implemented wind forecasting in 2008 and PJM did so in 2009.

Look now at the Southwest Power Pool, (serving western Plains from North Dakota to northern Texas) where wind has reached 50% of the energy supply in some hours. There, grid operators have learned to adjust the voltage controls when wind is forecasted to be a major supply on the wires. In Colorado, Xcel has learned that there are some predictable aspects to the variability of wind, and operations can be improved by using some simple logic to reduce the costs. California ISO  recently learned it can use solar farms for reliability services. The technology is already in place to meet the need, but the contracts need to be written to gain access to the flexibility.

Water can be a vulnerability

We will urge the Commission to look to the state regulators’ body (NARUC) which resolved to support water-smart energy choices.  UCS has emphasized the impacts of drought on conventional power plants. Knowing fossil and nuclear plants depend on cooling water to run in hot weather, UCS quantified the water withdrawal needed for older generators, and technologies that need little or no water. Renewable energy and energy efficiency came out at the top of that analysis.

Wires are the backbone of the Grid

Transmission lines are key to the reliability of the grid. Most power outages are traced to transmission for large areas, and local outages are due to problems with wires on the street level. Storms can cause large-spread outages, but so can the frailty of transmission.  Transmission is burdened by the expense of including redundancy for reliability. Look to the role of energy storage to free up more of what is already built, part of a “smart” or modern grid that can diagnose and respond to disturbances.

To be continued

FERC Commissioner Rich Glick wrote in a concurring opinion how more work is needed to clarify resilience issues, and the role of new supply technologies:

“The Department’s own staff Grid Study concluded that changes in the generation mix, including the retirement of coal and nuclear generators, have not diminished the grid’s reliability or otherwise posed a significant and immediate threat to the resilience of the electric grid. To the contrary, the addition of a diverse array of generation resources, including natural gas, solar, wind, and geothermal, as well as maturing technologies, such as energy storage, distributed generation, and demand response, have in many respects contributed to the resilience of the bulk power system.”