The dependability of our energy supply is essential to our way of life. Many, especially those who lived through the energy crisis of the 1970s, understand this well when it comes to vehicle fuels like gasoline.
But the public often doesn’t think about the reliability of our nation’s electrical supply, even though that reliability is just as critical to our nation’s economy.
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Fortunately, there are those who are focused on keeping the American electric supply reliable. As a former commissioner of the Federal Energy Regulatory Commission, a key part of my job was to regulate our nation’s wholesale electricity markets and protect the reliability of our interstate electric grid.
Recently, U.S. Department of Energy Secretary Rick Perry called for a report on the reliability of our power grid. In doing so, he indicated he wanted to ensure the nation’s electric grid continues to provide the reliable power Americans have come to expect. It’s a timely topic, and like many people, I’m looking forward to the final report. Our nation’s electric grid is undergoing some of the most profound changes since its inception, so it’s natural that the secretary would ask for an assessment of the electric system and recommendations to head-off any potential problems.
In recent years, there has been a dramatic shift in how the nation generates its electricity. Thanks to America’s shale gas revolution, a plentiful supply of affordable natural gas has changed the economics of electricity generation. Generation from natural gas fired plants has displaced other plants like coal and nuclear units. Intermittent resources like wind and solar power, supported by tax incentives, have become a more significant part of the electric system as well. In sum, we are asking our grid to be more flexible and resilient during a time when the generation mix is changing rapidly.
The Polar Vortex of 2014 is a good example of why Perry’s requested report is important. For many Americans, the polar vortex was a nuisance; a blast of artic air that reminded us how cold North American winters can be. For those of us who were involved with the operation and regulation of the nation’s electric utilities, it was more noteworthy.
My former agency, FERC, along with the nation’s grid operators, conducted a hindsight analysis of the Polar Vortex, and what we found was concerning. Generators that the system expected to be available when electricity demand was highest too often were not available. Much of the generation fleet that saved the day during periods of high demand were the traditional “dispatchable” generation units, like coal and nuclear. These resources have made up the backbone of the electric grid for decades, but are being marginalized in the evolving resource mix.
We were fortunate not to have had major reliability problems during the Polar Vortex. The grid and consumers dodged a bullet, but it was a red flag reminder to not take electricity for granted. And while we have not had a repeat of the Polar Vortex, merely hoping for mild winters is not a realistic long-term strategy for securing the grid.
More light will be shed on these issues when the DOE releases its report. However, some truths are already known, such as the fact that a fair number of the traditional units that were critical resources during the Polar Vortex may not be around for the next harsh weather event. While new resources have come into the mix in the interim, every resource brings with it its own unique operating characteristics, and we cannot simply assume the grid will work as it always has when we encounter our next “stress test.”
The only way to gain the necessary knowledge about our emerging grid’s resiliency is to ask questions. I am glad Perry is exercising leadership so that we can thoughtfully address potential problems before we have a blackout, rather than waiting to ask those questions after it is too late.
Tony Clark is a Senior Advisor at Wilkinson Barker Knauer, LLP. From 2012 to 2016, he served as a Commissioner of the Federal Energy Regulatory Commission.
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