As the United States enters an era of upheaval in electricity markets, we are obliged to make the best possible use of energy sources through significant government intervention that will lead to greater electric stability and reliability.
Because they provide baseload power around the clock, economically challenged coal and nuclear plants can continue to remain operational and serve millions of Americans without having to be mothballed or displaced by new natural gas capacity and renewables.
But that will require government action to stop the premature closure of coal and nuclear plants. Policymakers wonder how coal and nuclear plants can be saved. Just in the nick of time, the North American Electric Reliability Corp. has warned that electricity reliability will be at risk this summer in Texas and California.
Previously, the Pittsburgh-based National Energy Technology Laboratory warned about the threat of a continued loss of baseload generation, especially if there is another “bomb cyclone” winter storm. Had it not been for the resilience of many coal plants, a report from the laboratory said, the eastern United States would have suffered “severe electricity shortages, likely leading to widespread blackouts.”
President Trump has directed Energy Secretary Rick Perry to stop the premature closure of coal and nuclear plants. Trump’s order came after Perry outlined a two-year plan to save power plants using emergency powers under the Federal Power Act and the Defense Production Act, which permits the government to nationalize parts of the power sector. The plan calls for direct purchases of electricity from a list of specific coal and nuclear plants as well as the establishment of a new “strategic electric generation reserve,” in the interest of national security.
Even with an abundance of cheap natural gas and growth in the use of subsidized solar and wind power, the nation’s coal and nuclear plants cannot be retired quickly because of the vast scale and huge amounts of capital deployed. Coal and nuclear plants combined account for 50 percent of the nation’s electricity-generating capacity.
History shows that shifts in the energy system are evolutionary — not revolutionary. That means many coal and nuclear plants need to remain operational. The effect will be to slow the decline, not reverse it. The share of renewables will expand at a rate slower than that of coal and nuclear, especially if renewable subsidies end. It can take a decade to bring a new energy source like offshore wind farms or large solar farms into production.
The prudent course is to assume that we are unlikely to see substantial growth in domestic electricity production because of improvements in demand management and energy efficiency. At the same time, we should keep coal and nuclear plants in operation, remembering that maintaining grid stability and reliability is more urgent and more difficult than is generally thought.
See the article here.
- On June 8, 2018