Another Grid Reliability Study Could Support Energy Sec’y Perry On Coal, Nuclear Closures

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Last month, US Energy Secretary Rick Perry proposed a new federal policy aimed at protecting coal and nuclear power plants. The plan was met with a torrent of protest from renewable energy and natural gas stakeholders. The basic issue was the Energy Department’s finding that conventional power plants need to be kept in operation even when cheaper sources are available.

A new grid reliability assessment from the North American Electric Reliability Corporation appears to have provided the Perry critics with more ammunition. However,  a closer look indicates that NERC’s concerns run deeper than the familiar coal vs. renewables debate — and that could be bad news for natural gas.

NERC Likes To Plan Ahead!

Before we get into the weeds, let’s take a quick look at the North American Electric Reliability Corporation. NERC is a not-for-profit corporation overseen by the Federal Energy Regulatory Commission. It is tasked with ensuring the “reliability and security of the bulk power system” serving a population of 334 million in a territory sprawling across the US, Canada, and the northern portion of Baja California, Mexico, which is split among 1,900 bulk power providers and operators.

NERC’s responsibilities break down into four areas:

    • Reliability – to address events and identifiable risks, thereby improving the reliability of the bulk power system.
    • Assurance – to provide assurance to the public, industry, and government for the reliable performance of the bulk power system.
    • Learning – to promote learning and continuous improvement of operations and adapt to lessons learned for improved bulk power system reliability.
    • Risk-based Approach – to focus attention, resources, and actions on issues most important to bulk power system reliability.

Shorter NERC: Planning ahead is super important!

The 2017 Grid Reliability Assessment

NERC released its latest grid reliability study last week under the title, “2017 Long-Term Reliability Assessment. Some energy observers immediately jumped on it as further proof that there is no fact-based justification for Perry’s proposed coal and nuclear power protections.

That’s a pretty accurate assessment, if you only look at the NERC press release announcing the new assessment. Parts of the press release suggest that Perry’s new protections are a ham-handed approach to a problem that can be resolved by engaging in a more “robust” planning scenario. Here’s a sample:

“The accelerating move toward natural gas and renewables means the industry must adopt a more robust approach to planning the bulk power system so that it continues to be reliably operated,” said John Moura, director of Reliability Assessment and System Analysis.

True enough, as far as it goes. However last week CleanTechnica’s Joshua Hill took a close look at the study itself, and noted that it takes a slightly different tack from the press release (for some reason the study is offline as of this writing, go figure).

For example, here’s a line Hill cited from the study’s Executive Summary:

…While related risks and corresponding mitigations are unique to each area, industry stakeholders and policymakers should continue to respond with policies and plans to address fuel availability.

That’s not exactly a death blow against Perry’s proposals. With that in mind, go back to the press release and take a look at some of the recommendations in the new grid reliability assessment. They seem to indicate that NERC actually does support the preservation of conventional power plants where needed:

FERC should consider the reliability attributes of all generation to ensure that the generation resource mix continues to evolve in a manner that ensures the reliability and resilience of the bulk power system.

So, What’s Really Going On Here?

When you dig into the weeds, it looks like NERC’s main concern of the moment is not renewable energy integration. It’s the speed at which natural gas has been pushing into the nation’s power grid. Here’s a couple more recommendations cited in the press release:

When evaluating infrastructure requirements, policy makers should consider NERC and industry studies related to the potential bulk power system impacts of natural gas disruptions.

Transmission planners and operators should identify and report on expected reliability concerns related to interruptible natural gas transportation.

Grid Reliability And Natural Gas

Now, take a look back at a 2016 NERC grid reliability assessment focusing on natural gas, and the picture comes into more focus. Here’s the money quote from an introduction to the report:

An increasing dependence on natural gas for electricity generation could pose reliability risks to the bulk power system due to the reliance on a single, just-in-time fuel source.

Here’s another snippet:

…Natural gas challenges historically have occurred during extreme winter weather conditions and focused primarily on pipeline capacity and availability. However, as the reliance on natural gas increases, these challenges may be experienced more often. Additionally, a recent high-profile event at a natural gas storage facility demonstrates the potential risks to bulk power system reliability by reducing fuel diversity.


Trouble Ahead For Natural Gas

If you caught that thing about “high-profile event at a natural gas storage facility” you’re on to something. That would probably be referring to the Aliso Canyon gas storage facility. The facility apparently sprung a massive leak late in 2015 but was it was not identified until February 2016. Aside from resulting in the largest methane leak on record in the US, Aliso Canyon set off millions of dollars in demand response measures to make up for the shortfall in supply.

That was enough to set off alarm bells at NERC, which explains the tone of the 2016 assessment.

NERC also issued another special assessment for natural gas just last month. This one is especially interesting because it takes note of the dynamic between natural gas and renewable energy as they relate to conventional power plant closures:

The operating realities of renewables and other intermittent generation resources, when combined with ongoing coal and nuclear retirements, create a greater dependence on natural-gas fired generation…In light of the power sector’s rising reliance on natural gas, the loss of gas facilities must be added to the list of potential extreme contingencies used to measure system reliability impacts.

Where NERC sees as a challenge, natural gas stakeholders see opportunities — lots of them. Last spring the American Petroleum Institute issued a detailed rebuttal to a leaked memo indicating that the Energy Department was already on track to propose new protections for coal and nuclear. API made the case that natural gas turbines are a more nimble, flexible fit for renewable energy integration.

As for renewable energy, NERC’s 2015 long range grid reliability assessment took note of the challenges involved in grid integration, but didn’t appear to find insurmountable obstacles:

The assessment’s recommendations include that the increase in renewable resources should be coupled with requirements that ensure an equal level of essential reliability services for the reliable operation of the bulk power system. Planning requirements and interconnection agreements should require sufficient amounts of essential reliability services during and throughout the transformation of the resource mix.

To sum up: in some markets, some coal and nuclear power plants may need to be in operation for  the foreseeable future. I know, right? Shocker!

The big question is whether or not Perry’s new proposals will keep any power plants in operation beyond the point where they are actually needed for grid reliability.

That’s rapidly becoming a moot question in some markets. For example, coal is already all but dead in New England, which is looking at a massive new hydropower transmission line. Pretty much every state along the eastern seaboard is also eyeballing offshore wind energy.

Photo: US Department of Energy.

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Tina Casey

Tina specializes in advanced energy technology, military sustainability, emerging materials, biofuels, ESG and related policy and political matters. Views expressed are her own. Follow her on LinkedIn, Threads, or Bluesky.

Tina Casey has 3324 posts and counting. See all posts by Tina Casey