AEE Statement in Reaction to DOE Report on Electricity Markets and Reliability 

The U.S. Dept. of Energy report on Electricity Markets and Reliability is expected to be released tonight at 10 p.m. Eastern. Advanced Energy Economy (AEE) issued the following statement:  

“We are glad to see that DOE recognizes that changes in the grid are primarily the result of low-cost natural gas, not policies supporting renewable energy. But this report seriously overstates the challenges associated with new energy resources. It also implies that certain power plants now losing out in the marketplace make an irreplaceable contribution to reliability and resilience, which is not the case,” said Graham Richard, CEO of Advanced Energy Economy, a national business group.

“Our nation’s grid operators themselves have said they are facing no difficulty in managing an increasingly diverse set of resources, and that they will have no difficulty maintaining reliability as uncompetitive power plants inevitably retire. Distributed energy resources, energy storage, advanced grid technologies, demand response, and other advanced energy technologies are helping to make the electric power system more flexible, reliable, and resilient. When coal piles froze and coal plants failed in the Polar Vortex, it was wind power and demand response that kept the lights on.

“What is happening in our power grid is a natural process of technology progress and market competition,” said Richard. “That process should be allowed to continue, not be distorted by this Administration’s preference for ‘baseload’ resources over the flexible resources that are modernizing the electric power system. Advanced energy is a $200 billion industry in this country, supporting more than 3 million U.S. jobs. We look forward to working with FERC and grid operators around the country to ensure that all advanced energy technologies have a chance to compete in our electricity markets. But if this report’s findings are used as the basis for federal policies that undermine the ability of advanced energy resources to compete in energy markets or interfere with states’ rights to determine their energy mix, AEE will oppose them vigorously.”

Background
In a memo dated April 14, Secretary Perry directed the Department of Energy (DOE) to conduct a study that would “explore critical issues central to protecting the long-term reliability of the electric grid,” and to analyze “market-distorting effects of federal subsidies that boost one form of energy at the expense of others,” and to report back in 60 days. 

The Perry memo explicitly stated that “baseload power is necessary to a well-functioning electric grid.” AEE, and other trade associations, quickly recognized this as an attempt to single out advanced energy technologies as a threat to grid reliability. Ultimately, we will have to see the final report to form a final opinion on its conclusions, but based on the explicit language of the memo, as well as public comments from DOE Secretary Perry, EPA Administrator Pruitt, and President Trump, we are concerned that this report may present a distorted picture of the role advanced energy is playing in the electric power system, and may lay the groundwork for policies that would seriously disadvantage advanced energy technologies and services.

• For 5 Findings from Leaked Draft to Watch for in the study, read here.
• For an overview of AEE engagement and commentary, see blog posts here, here, and here.
• April 28: In response to the memo and our conversations, AEE, AWEA, and SEIA sent a joint letter to Sec. Perry asking for DOE to “initiate a public process” open to all stakeholders, as is customary for agencies developing reports that provide policy recommendations.
• May 16: AEE, AWEA, SEIA, and ACORE held a joint press briefing on documents each submitted to DOE to inform its study of the electric power system and reliability. AEE’s report – Changing the Power Grid for the Better – shows that today’s electric generation mix is more diverse than ever; low-priced gas is primarily driving the change in resources, followed by flat load growth and competition from renewables; ERCOT and PJM experience shows reliable grid management with high degree of variable renewables even in extreme conditions. Read more about the collection of reports here.
• June 20: Analysis Group released a report (commissioned by AEE Institute and AWEA) finding market forces – primarily low-cost natural gas and flat demand for electricity – are causing coal and nuclear power plants to retire, not state and federal policies supporting renewable energy development. The report finds that the changing resource mix poses no threat to reliability of the nation’s power system. 
• July 26: Grid operators for all regions testified before a House energy subcommittee Powering America hearing about grid reliability, the evolving energy mix they have adapted to, and noted cybersecurity concerns.

About Advanced Energy Economy
Advanced Energy Economy is a national association of businesses that are making the energy we use secure, clean, and affordable. Advanced energy encompasses a broad range of products and services that constitute the best available technologies for meeting energy needs today and tomorrow. AEE’s mission is to transform public policy to enable rapid growth of advanced energy businesses. AEE and its State and Regional Partner organizations are active in 27 states across the country, representing more than 1,000 companies and organizations in the advanced energy industry. Visit AEE online at www.aee.net.

Media Contact:
Monique Hanis, mhanis@aee.net, 202-391-0884