Utility Chooses Wrong: Save Energy vs. Burn Fuel

August 10, 2016 | 9:53 am
Mike Jacobs
Senior Energy Analyst

When it’s hot, it’s hot. Do our plans for increasingly hot summers make sense, or are we going backwards on our energy policies?

Consider these two simplified strategies: close the windows and shades to keep the house cool, or burn more fossil fuels and dump heat and CO2 into the environment. Which is better for consumers? Which is better for reducing future climate change?

Energy paths

One path, investing in efficiency to get more cool homes, shady porches and quieter air conditioners, would lower energy use and the expenses and climate-changing pollution that come with energy use. The other path is to build more fuel-burning power plants, which require on-going fuel bills and increased haze and the carbon build-up that causes global warming.


This post is part of a series on Planning Failures: The Costly Risks of Ignoring Climate Change.

The choice of fuel-burning and pollution with more power plants is not a good one given our need to adapt to the reality of climate change. Burning the fuel creates more carbon in the atmosphere, heating the planet and increasing the risks of extreme heat events. The hotter weather makes power plants run less efficiently and produce less electricity, so we get less and less while making the problem worse and worse.

This is a false choice

Fortunately, there are fuel-free power plants to provide energy at attractive prices. The US is building wind farms and solar energy at an accelerating pace, attracting the same kind of investors as fossil-fuel plants, plus investments by regular folks.

Both solar and wind are driven by the same force that creates hot weather, the sun. More precisely, the solar provides energy during the day when the sun is making everything hot, and wind is the result of heated air moving and cool air following to take the place of the heated air. So wind in summer is stronger late in the day and into the night after the energy of the sunshine has been absorbed.

But are grid officials doing the right thing?

Learning that efficiency is easier than producing more at a DOE lab. Courtesy U.S. Department of Energy

Learning that efficiency is easier than producing more energy at a DOE lab. Photo: Courtesy US Department of Energy

In the engineering world, electricity supply is made more cheaply and reliably when a variety of power supplies are connected in a “power pool” or regional grid. The individual plants’ strengths and weaknesses are well known, and the mix of plants is run to provide the lowest cost electricity. When wind or solar is added to a pool, the zero-cost fuel is an attractive strength. (The zero carbon pollution is harder for the grid operators to consider. A carbon tax or carbon allowances would make this much easier.)

There’s a debate now about how the grid operators and their sophisticated markets are able to rely on, and pay, wind and solar energy when policies and prices allow renewables to displace fossil-fuel burning plants. The economists in the East are certain that every power plant has to be just like every other. (From where I’m writing in Cambridge, Mass., I can see the towers of Harvard University.) In New England and the Mid-Atlantic power pools, wind and solar are maybe 5% of the energy supply on a good day, but the arguments and biases from the economists and engineers are unrelenting.

In stunning contrast, the grid operators in the Great Plains, where states like Iowa, Kansas, Oklahoma, and Texas just keep building renewable generation, are managing times when wind is over 25% of the electricity supply. It seems, the practical folks in the Plains are building wind farms, selling the energy, making a future for their families and communities and the grid operators are learning to deal with it.

How far off track is PJM

The grid operator PJM, (serving Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, and the District of Columbia) has created obstacles for efficiency, demand response, and solar that are strong in summer and wind for winter with new market rules requiring each of these provide service year-round.

In doing this, PJM rejects a hundred years of good engineering practices that pooled the generators together to achieve higher reliability at lower cost. PJM has given in to the economic purists.

This decision to require the equivalent of one size fits all, or perhaps more applicable, one coat to be worn in both summer and winter, ignores the use of solar and air conditioning management in summer, as well as the stronger winds of winter.

UCS has argued that PJM is acting to disregard state Renewable Energy Standards with this approach to a single performance requirement, thereby denying both the laws of man and the laws of physics. PJM counters that its market rules are better.

Rejecting a summer strategy combined with a winter strategy for keeping the lights on and the computers humming, PJM insists that each plant or resource must do just as well in winter as in summer. As the grid operator that manages changing demand every day and night, and distinctly less electricity use in winter than in summer, PJM has demonstrated that it can integrate the power pool, balance diverse needs for energy and differing contributions from different power plants. Why the economists are rejecting this role now in pursuit of an idealized perfect market is up for debate.

Unfortunately, the choice made by PJM is particularly maladaptive for addressing the problem of climate change. The non-carbon options are also the ones better able to deliver in extreme conditions.