New Study Underscores Threat to the Nation’s Grid Reliability
The latest iteration of a headline-grabbing study, “The Coal Cost Crossover” – which claims the entirety of the existing coal fleet is less economic than new renewable projects – is exactly the type of academic clickbait driving the nation’s reckless approach to the energy transition.
Like previous versions, this iteration of the report once again tries to make an apples-to-apples comparison for energy sources that provide wildly different services to the grid while downplaying the challenges of siting new renewable projects and enabling infrastructure, ignoring the value of direct and indirect coal jobs, and discounting the urgent reliability warnings made by the nation’s foremost grid experts and regulators. For those who choose to read the report, despite its detachment from on-the-ground reality, some issues to consider follow.
Cost. This study is an important benchmark for falling wind and solar power costs and the ever-expanding subsidies, tax credits and mandates that are supercharging deployment. What the report is not is a fair comparison of the cost of electricity from new renewable sources of power compared to the existing coal fleet.
The coal fleet remains foundational to the reliable supply of power, ramping up generation during periods of peak demand – particularly during bitter cold – and provides essential dispatchable fuel diversity to shield consumers from resurgent natural gas price volatility.
While the coal fleet provides stability to U.S. energy prices – particularly during periods of peak demand – renewable sources of power often operate in unhelpful feast or famine conditions. They provide excess power in periods of low demand, necessitating curtailment, while also going missing during periods when demand surges. For example, Bloomberg’s commodity editor recently observed that during one windless stretch in the U.K. in November, the collapse of wind generation saw the grid go from 16.4 GW of wind power to just 0.4 in 40 hours. These windless – or sunless – stretches necessitate huge investments to ensure renewable capacity additions are supported by backup power. In fact, these periods of uncooperative weather can last as long as two weeks. Research from the Energy Futures Initiative, a think-tank led by former Energy Secretary Ernie Moniz, found that in 2017 California went 90 days with little or no wind generation. This included several gaps when wind generation wasn’t available for multiple days.
Calculating wind and solar costs must also include the systems costs of integrating it, the backup needed to support it, the infrastructure needed to connect it and an honest accounting of the challenges – not benefits – that come when more and more intermittent energy is added to the grid.
Grid Reliability. The 800-pound gorilla in the room. U.S. grid reliability is in crisis. It’s a crisis grid operators and reliability regulators have been warning about for years and one dictated by the pace of the energy transition and the loss of fuel-secure coal power capacity. The North American Electric Reliability Corporation (NERC) continues to sound the alarm over the nation’s eroding grid reliability and the critical need to better value the nation’s existing energy sources. John Moura, NERC’s director of reliability assessment and performance analysis, recently told reporters, “Just to say it for the fourth or fifth time: Managing the pace of our generation retirements and our resource changes to ensure we have enough energy and essential services is an absolute necessity.”
What “The Coal Cost Crossover” authors are proposing is simply not a realistic alternative to provide the services and reliability underpinned by the coal fleet. The authors amusingly conclude that, “the economics of replacing coal with renewables are so favorable that they could fund a massive battery storage buildout to add reliability value along with emissions reductions.” The battery storage buildout they reference is the addition of four-hour batteries that would provide just a fraction of the on-demand power provided by coal generation. The authors, however, point out that “it is important to remember reliability is a system attribute—replacement renewable portfolios need not bear sole responsibility for replacing the reliability services of individual coal plants.” In their view, “the system” – which is of course underpinned by coal capacity – will fill reliability gulfs the wind, solar and battery additions they propose cannot. It’s precisely this type of thinking that has the nation’s supply of power now on the ropes.
The authors even go so far as to dismiss the concerns of NERC and reliability regulators in charge of keeping the lights on to endorse the conclusions of academics relying on lab-generated modeling, writing, “A recent NERC assessment highlighted the need to build new generation before retiring old generation when reliability risks are present. But recent studies such as the 2030 Report, which found an 80 percent clean, coal-free electricity system to be both reliable and affordable, confirm we can maintain a dependable electricity system without coal.” The 2030 study they reference is from a lab at the University of California Berkley. With the reliable supply of the nation’s electricity on the line, that study – and others like it – are the fantasy football rosters of energy policy making.
On-the-Ground Reality. The on-ground-reality for the coal to renewables switch proposed in the report couldn’t be more different than lab calculations. Towering siting and permitting hurdles continue to stand in the way of connecting the nation’s best and wind and solar resources to demand centers. Siting wind and solar projects near retiring coal plants – as the report argues for as an alternative – is also much easier said than done. Even the authors of the report admit as much, writing, “Absent regulators stepping in, retiring a plant is much easier than building a new renewable project. Price signals may induce coal retirements before new renewable projects can be approved and built to take their place.”
The land use and visual impacts of wind and solar capacity are a far different equation than centralized coal plants. The industrialization of rural areas for the great wind and solar buildout is facing steep resistance in even some of the most climate-focused corners of the country.
“I’m really worried about how difficult we’ve made it in New England to build anything,” Cheryl LaFleur, a former member of the Federal Energy Regulatory Commission toldThe Boston Globe. “If we’re going to use more renewables, we actually have to site them and build them….”
Consider Senator Bernie Sanders’ Vermont. Opposition to utility-scale renewable projects is so strong the pipeline of potential projects has completely dried up. An article for the Sierra Club’s in-house magazine observed that, in 2012, Vermont had at least a dozen wind projects in development. Today, there are none. No industrial-scale wind or solar projects are underway anywhere in the state. As the magazine summed up, the wind turbines, solar panels and transmission lines of a renewable future must go somewhere, “but many communities—including those full of avowed liberals and environmentalists—are working hard to make sure they go somewhere else.”
According to reporting from Bloomberg, as many as 40 planned coal plant retirements have been postponed or scrapped due to supply chain issues or siting challenges for renewable projects, or acute grid reliability challenges where utilities and grid operators have made it clear closing coal plants would be reckless. That’s the reality the report’s authors conveniently choose to ignore.
Jobs and Economic Impact. Finally, it’s important to acknowledge that not all energy jobs are created equal. Coal generation employs tens of thousands of workers from mine, through transport all the way to the power plant – and has done so for generations – while wind and solar offer largely temporary construction jobs to build the capacity at much lower salaries. While this report tries to drive a narrative that replacing coal plants with local wind and solar production can be an economic win for coal communities, the math tells a startlingly different story.
Wind and solar jobs don’t compare to mining jobs or the pipefitting jobs so essential to existing power plants. “When you’re talking about the transition to the new green economy, the first question has got to be how are people going to make a horizontal economic move,” Sean McGarvey, the president of North America’s Building Trades Unions, told The New York Times. “I can tell you that in the onshore wind and solar industry, for my members we’re talking in some cases a 75% pay cut and they’re losing benefits.”
The Energy Futures Initiative found that workers employed by solar and wind power companies earn significantly less than those who mine coal or drill for natural gas. In fact, according to the U.S. Bureau of Labor Statistics, the average salary of a coal miner is $89,000 per year. Coal jobs aren’t just good jobs, they’re community-supporting jobs. Coal mining continues to provide more than 400,000 direct and indirect jobs across the country. By contrast, jobs in energy-specific construction, like wind and solar installers, pay about $25.53 per hour, or just above $53,000 for the year. In West Virginia alone, in 2019, the coal mining industry spent more than $2.1 billion on wages and generated about $9.1 billion in economic activity according to the West Virginia University Bureau for Business and Economic Research. When coal electricity generation is factored in, the economic impact in 2019 totaled nearly $14 billion, supporting nearly 33,000 jobs, or about 17 percent of the state’s total economic output.
Subsidizing the dismantling of the U.S. coal industry and the economic impact it continues to have in coal states for vague promises of something to fill its place is a terrible deal for coal communities and a reality a study like this one shouldn’t gloss over.
Unfortunately, this study is painting a picture that the energy transition is easy, cheap and can be done without drawbacks. The reality couldn’t be more different. The coal fleet remains essential and is critically important to reliably and affordably getting the country to its energy future.
- On February 1, 2023