FERC says no to Energy Department plan to subsidize coal, nuclear plants –
By Patricia Beech –
Will the Polar Vortex of 2018 force utility companies to reconsider dumping coal in favor of natural gas and green energy?
Bloomberg News last week reported that the nation’s power grid was “showing signs of fatigue” as power plants struggled to cope with the increased energy demands brought on by the arctic blast that swept across the country from Nebraska to New England.
In the Midwest, a shortage of supplies caused outages and increased use of fuel oil. In the Northeast, oil burning power plants also ran short on fuel. In contrast, areas of the country with ample coal capacity were able to churn out sufficient power to meet the skyrocketing demands.
PJM Interconnection – a wholesale electricity market serving more than 65 million people in Ohio, Indiana, Illinois, Pennsylvania, Kentucky, Michigan, West Virginia, Virginia, Delaware, Maryland, New Jersey, North Carolina, Tennessee, and the District of Columbia – reported that coal produced 47,000 megawatts of electricity last weekend, compared to 21,000 megawatts for natural gas. The nation’s 99 nuclear reactors also outperformed gas, delivering approximately 35,000 megawatts, while wind turbines produced only 3,000 megawatts.
Despite those numbers, PJM reported no fuel supply issues, and at least two power generators said they had successfully overcome challenges posed by the frigid weather.
American Electric Power Co. spokesperson, Melissa McHenry, said the utility company has “been able to respond to demand as needed” and David Byford, spokesperson for Dynegy Inc. said “with few exceptions, our plants are running well.”
According to the U.S. Energy Information Administration, the trend toward green energy in recent years has produced a 60 gigawatts reduction in America’s coal capacity, and is expected to reach 80 gigawatts by 2020.
Additionally, the energy.gov website reports that “last year, for the first time in history, natural gas replaced coal as the leading source of electricity generation, and in 2015, a record-high amount of generating capacity was retired.”
This latest round of frigid weather has many questioning the reliability of a power grid not anchored by the sturdy baseload power generation that coal and nuclear plants provide.
Energy Secretary Rick Perry noted in an April 2016 memorandum that, “the stakes are high around these issues because electricity is crucial to modern society and economic activity, and because of the physical and financial magnitude of the industry.”
According to Perry’s memo, the United States has around 7,700 operating power plants that generate electricity from a variety of primary energy sources; 707,000 miles of high-voltage transmission lines; more than one million rooftop solar installations; 55,800 substations; 6.5 million miles of local distribution lines; and 3,354 distribution utilities delivering electricity to 148.6 million customers. The total amount of money paid by end users for electricity in 2015 was about $400 billion. This drives an $18.6 trillion U.S. gross domestic product and significantly influences global economic activity totaling roughly $80 trillion.”
According to countoncoal.org, 70 percent of voters favor a diverse mix of fuel sources to maintain grid reliability and affordable power.
Secretary Perry advocated an “all of the above” mix for the nation’s power sector. He asked the Federal Energy Regulatory Commission give added weight to baseload coal and nuclear plants that maintain on-site fuel supplies, thus allowing them to run independently to shoulder the weight of a heavily taxed power grid. However, his plan failed to win support from natural gas producers and grid operators who said it would undermine competition in the power markets.
In an order issued by the FERC on Monday, Perry’s plan to subsidize coal and nuclear plants was rejected, and the commission requested that grid operators work to make the current system more resilient.
“We appreciate the Secretary reinforcing the resilience of the bulk power system as an important issue that warrants further attention,” the agency said in the order. All five commissioners were appointed by President Trump; three are Republicans.
Perry remained undaunted by the commission’s decision.
“As intended, my proposal initiated a national debate on the resiliency of our electric system,” he said. “What is not debatable is that a diverse fuel supply, especially with on site fuel capability, plays an essential role in providing Americans with reliable, resilient and affordable electricity.”
The decision is a harsh setback for coal-reliant communities like Adams County that lack the basic infrastructure required to rebuild their coal-based economies.