Published on January 8th, 2018 | by Tina Casey0
Northeast Cold Snap An Acid Test For Renewable Energy … Or Not
January 8th, 2018 by Tina Casey
With the “cyclone bomb” winter storm and Mars-like cold temperatures battering the US northeast, some energy stakeholders are seizing the opportunity to claim that conventional fuels beat renewable energy when it comes to coping with severe weather. It’s too early to render a final verdict, but so far it looks like the conventional approach to energy supply is not a clear winner, if at all.
Point 1: Price Volatility
Price stability is a key advantage of renewables over fossil fuels, and the cold snap is a case in point.
Reuters provides a detailed rundown that’s well worth a read in full, but for those of you on the go here’s a snippet summing up what can happen to prices when fossil fuels meet extreme weather:
A severe winter storm in the U.S. Northeast brought plunging temperatures on Friday, driving regional natural gas prices to all-time highs, disrupting refinery operations and causing electrical outages.
Heating oil prices are also affected:
The average U.S. home heating oil price rose 5.4 percent to $3.078 a gallon in the seven days through Jan. 1 from a week earlier, according to data from the U.S. Energy Information Administration. On the East Coast, the price increased 5.4 percent to $3.085.
The price spike is an especially cruel cut for struggling businesses and low income households. When the cold snap first began taking hold in late December, Associated Press weighed in with this observation:
Plunging temperatures across half the country on Thursday underscored a stark reality for low-income Americans who rely on heating aid: Their dollars aren’t going to go as far this winter because of rising energy costs.
AP also notes that last spring President Trump proposed eliminating LIHEAP, a federal program that helps low-income households offset their heating bills. Funding was eventually retained at the same level as last year, but the price spike means those dollars won’t go as far.
Point 2: Supply Chain
Reuters also underscores the vulnerability of the petroleum supply chain:
Refiners in the Philadelphia region were battling severe cold that as slowed crude deliveries and forced the largest plant on the U.S. Coast to significantly cut production.
In a reversal of normal trade routes, tankers from Europe have already set out to replenish dwindling supplies of refined products in the US. However, Reuters notes that delays are expected until ice is cleared at ports in Boston, New York and Philadelphia.
Point 3: Baseload Vulnerabilities
Coal and nuclear energy stakeholders are committed to defending a 20th century grid model that leans heavily on large “baseload” power plants.
As far as generation reliability goes, this model actually does well. The unplanned failure of a generating unit is rarely the cause of power loss.
However, there are other problems with the centralized model. During the 2014 polar vortex, for example, gas power plants were affected by supply issues, and coal power plants were impacted by storage problems when onsite stockpiles froze.
This week’s weather demonstrated another key issue, transmission. Though central power plants may continue operating in severe weather, their transmission lines may not. The Pilgrim Nuclear Power Station was knocked offline due to a transmission problem, potentially depriving Massachusetts of 10% of its electricity supply in one blow.
Grid improvements in recent years enabled regional operators to compensate for the loss, though localized storm-related power outages have continued to wreak havoc this week.
The vulnerabilities of the baseload model have been in the spotlight this year, because Energy Secretary Rick Perry has been pushing for a new rate structure designed to protect aging coal and nuclear power plants, even if more expensive alternatives are available.
However, Perry has also been a staunch supporter of his agency’s renewable energy and grid resiliency initiatives, which favor a 21st century grid model leveraging distributed energy resources like wind and solar.
Interestingly, natural gas stakeholders have come down firmly on the side of renewable energy. That’s because natural gas power plants can respond quickly to supply and demand fluctuations that occur in grids with wind and solar.
In terms of this week’s weather, our friends over at The Hill provide a good rundown of the issue. They provide plenty of space for coal and nuclear advocates, but among the final observations is this one from the American Petroleum Institute (API represents both oil and gas interests):
We’re not really seeing any concerns surrounding grid resiliency or reliability, which is exactly why we said that there’s no need for this [notice of proposed rulemaking] to go forward…We’re getting the outcomes that virtually everyone wants anyway, which is safe, reliable and affordable power being delivered to everyone who needs it.
The Acid Test For Renewable Energy … Eventually
Against this background, it’s important to note that the New England region has lost almost all of its coal power generation capacity over the years. As our friends over at Utility Dive explain, much of the electricity in the region is provided by gas-oil plants. When cold weather diverts more gas to home heating, the plants burn more oil.
The dual-fuel strategy is just one element in a broader grid resiliency plan, based on lessons learned from the 2014 polar vortex episode. Although oil supplies are dwindling as the cold continues, the regional grid has been holding steady.
With the Pilgrim plant as well as New York’s Indian Point nuclear plant set for retirement, the region could be looking at an increase in both oil and gas dependency.
To complicate matters, energy planners in the region are already concerned about over-reliance on natural gas for power generation, while reliance on petroleum comes with a plague of environmental issues.
Considering the cold-related spike in oil and gas costs, there could be some wiggle room for “clean coal” advocates to argue for a coal revival in New England.
But, that’s not likely to happen.
The picture will come into sharper focus when the dust clears from the Arctic blast and the damage to energy infrastructure is toted up, but for now this extreme weather episode says more about the vulnerabilities of conventional power than the shortcomings of renewable energy.
Meanwhile, Secretary Perry just fast-tracked a major new hydropower transmission project for New England, the region is just beginning to tap into its considerable offshore wind resources, and new storage technology is propelling growth in onshore wind and solar.
There was no acid test for renewable energy this time around, but in a few years it could be a different story.
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Photo: Block Island Wind Farm via Deepwater Wind