New Grid Study Aims To Boost Coal, But Energy Dept. Bets On Natural Gas

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Last April, the Energy Department embarked on a new grid study that seemed pre-wired to support the coal industry, but the process has gone through more twists and turns than the Coney Island Cyclone and it just keeps getting more…interesting. In the latest development, the US Department of Energy has announced a $20 million funding opportunity for next-generation technology aimed at accelerating the trend away from coal-fired power plants.

Adding to the hurt, the beneficiary of all this taxpayer support will be coal’s arch rival, the natural gas industry.

 

The New Grid Study

For those of you new to the topic, Energy Secretary Rick Perry ordered the new grid study in a memo obtained by Bloomberg, which was loaded with language like this:

“We are blessed as a nation to have an abundance of domestic energy resources, such as coal, natural gas, nuclear and hydroelectric, all of which provide affordable baseload power and contribute to a stable, reliable and resilient grid…”

And, here’s a snippet of economic analysis from the memo that seems crafted by some lobbying organization or another:

Still others have highlighted the diminishing diversity of our nation’s electric generation mix, and what that could mean for baseload power and grid resilience. This has resulted in part from regulatory burdens introduced by previous administrations that were designed to decrease coal-fired power generation. Such policies have destroyed jobs and economic growth, and they threaten to undercut the performance of the grid well into the future.

Ouch! It sure looks like somebody does not want to encourage growth in the field of distributed renewable energy.

However, in a case of actions speaking louder than memos, Perry has been a consistent and vigorous promoter of Obama era policies that support renewable energy and distributed generation.

The Energy Department has also been forging ahead with its ongoing work on grid modernization, undermining the pro-coal message in the process.

Coal Twisting In The Wind

It’s also worth noting that although Perry’s grid study memo mentions nuclear and hydro along with coal for baseload generation, there is little the federal government can do to support growth in those two sectors.

Nuclear is practically toast in the US, as demonstrated by the South Carolina debacle. The technology may be a good fit in other countries, but the US has ample renewable resources, providing electricity consumers with less expensive, lower risk alternatives at hand.

New hydro construction is also not a particularly good bet for the future. The US is exploring ways to tap more juice from its existing hydroelectric dams and ambient currents or tides, but these are generally not utility-scale, baseload projects.

That leaves coal. The memo cites “regulatory burdens introduced by previous administrations” as the driving force behind coal power plant retirements, but the industry consensus is that although renewables are beginning to have an impact, the shale gas boom is the primary driver.

With that in mind, consider that the US oil and gas industry is a powerful foe. Its lobbying arm, the  American Petroleum Institute, pushed back against the leaked memo with a study of its own, aimed at demonstrating that natural gas is a better fit for a grid mix that includes distributed renewable energy. As cited by The Houston Chronicle earlier this summer, API’s chief economist made that clear:

“Baseload is kind of a historical term. It’s not really relevant to how electricity is produced today…What you need is dispatchability… and [coal and nuclear] are far slower when you compare them to a lot of the technology natural gas plants have.”

$20 Million For Distributed [Natural Gas] Energy

So, the agency charged with the new grid study is engaged in numerous programs that undercut the purported coal-friendly aim of its own study, and coal’s main competition — natural gas — has the advantage when it comes to integrating with renewable energy in the modern grid of the future.

That brings us to the new $20 million funding opportunity in support of natural gas, which was announced on July 26. It comes under the Energy Department’s ARPA-E office for supporting next-generation technology, with this mission:

ARPA-E today announced up to $20 million in funding for a new program to reduce the cost and increase the energy efficiency associated with providing electric power to commercial and industrial end users.

The new program has a catchy acronym, INTEGRATE for Natural-gas Technologies for Efficiency Gain in Reliable and Affordable Thermochemical Electricity-generation.

The aim is to increase the conversion efficiency of distributed (there’s the d-word again!) electric generation systems fueled by natural gas.

The goalpost is a conversion efficiency of 70%, which according to the Energy Department is about twice the average of the nation’s existing fleet of utility scale fossil power plants:

The INTEGRATE program seeks to achieve this unprecedented efficiency level at an attractive cost by developing fuel cell and engine hybrid system concepts and enabling technologies. These systems would ultimately be used by both commercial and industrial end users—including hospitals, hotels, office buildings, factories, and others.

So, here’s where it gets interesting. Despite all the flowery language in Perry’s memo, the funding announcement had this to say about the baseload power (emphasis mine):

The U.S. electric system is dominated by large, central power plants and an extensive transmission and distribution system commonly referred to as the “grid.” While this system is one of the greatest technical achievements of the 20th Century, the centralized power model remains highly energy inefficient, losing approximately two-thirds of the primary energy potential of the supplied fuel (e.g. coal or natural gas) during generation and transmission.

Oh, snap!

If you have any ideas about submitting a funding proposal, keep in mind that ARPA-E is looking for hybrid systems that “integrate a fuel cell with a heat or reactive engine for ultra-high efficiency at competitive costs.”

You should be prepared to demonstrate that your cutting edge technology will yield “unprecedented efficiency and lower emissions than today’s fossil-fuel generated electricity.”

Also, think big: winning proposals will have broad application that includes the transportation sector as well as buildings and facilities.

Full details on the application process are available from ARPA-E eXCHANGE, and get your Concept Paper over to ARPA-E by 5:00 p.m. Eastern Standard Time on September 11, 2017.

Meanwhile, that new grid study is about six weeks late and counting. What are they waiting for?

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Photo (cropped): via US Department of Energy National Transmission Congestion Study.