Our Input to DOE Study: Advanced Energy is the Answer, Not the Problem

As readers of Advanced Energy Perspectives are aware, the Trump Administration may be turning its promises to bring back coal jobs into an attack on advanced energy. Energy Secretary Rick Perry has ordered the Department of Energy to conduct a closed-door study of the electric power system. As designed, the purpose of this study seems to be blaming the growth of solar and wind energy for the declining market share of “baseload resources,” namely coal-fired and existing nuclear power plants, and suggesting that the decline threatens the reliability of electric power service. Though off base from the start, we can only expect that such a study, with its apparently predetermined result, will lead to policy action that will attempt to harm our industry’s continued growth.  Although the Department has not initiated the customary process of seeking public input on this study, when it comes to sharing the extensive evidence in literature and practice that the system is changing, but changing for the better, we are not waiting to be asked.

AEE is working closely with our colleagues at AWEA, SEIA, and ACORE to illuminate the faulty premises of this study, as well as the closed process for developing it. On April 28, our industry groups sent a letter to Secretary Perry calling for an open process of public comment, which is standard agency practice for studies leading to policy recommendations, to gather input from industry, regulators, grid operators, and other experts. To date, we have received no response to this letter. Yesterday, a DOE spokesperson told E&E News that the study was “internal,” but that the Department would be “making it public once it is finished” – something it could hardly avoid doing if it wanted to.

The lack of public input is particularly troubling given the false premises underlying this exercise, as they were laid out in Secretary Perry’s memo ordering the study:

1. That the growth of renewable energy generation is responsible for the declining market position off “baseload resources,” specifically coal and nuclear power, when the actual causes are low-priced natural gas and flat load growth, in that order;
2. That the “erosion” of these baseload resources makes the electric power system less reliable, when no specific energy source is necessary for maintaining reliability as long as sufficient total resources are available to meet demand at all times;
3. That decline in coal and nuclear power means the grid is becoming less diverse in its resources, when in fact it is becoming more diverse; and
4. That federal and state policies supporting renewable energy are giving unfair market advantage to wind and solar power, when some form of policy support is provided to all forms of energy, including coal and nuclear, and renewable energy is increasingly being chosen by utilities and corporate buyers based on price.

These premises deserve to be challenged. On Tuesday, AEE issued a press release and held a joint press conference and webinar with our allied industry organizations to brief the media on four new reports, one from each of our organizations, describing the benefits of renewable energy and, in our case, other advanced energy technologies (such as natural gas generation, demand response, and storage). Together, these technologies are diversifying our energy sources, reducing costs for consumers, and improving the reliability of the modern grid.

In lieu of a formal public comment process, we submitted these documents to DOE as information the agency should know and address in its study. We will hold the Department accountable if it does not. The documents submitted are:

• AEE: Changing the Power Grid for the Better – shows that today’s electric generation mix is more diverse than ever; that low-priced gas is primarily driving change in resources, followed by flat load growth and competition from renewables; and that ERCOT and PJM experience proves that reliable grid management is achievable with high degree of variable renewables and even in extreme conditions.

• ACORE: Energy Fact Check – The Impact of Renewables on Electricity Markets and Reliability – ACORE-produced report covering questions around baseload power and economic impact raised in Secretary Perry’s April 14, 2017 memorandum directing a study to explore critical issues central to protecting the long-term reliability of the electric grid.

• AWEA: Renewable Energy Builds a More Reliable and Resilient Electricity Mix - Grid operators are already reliably integrating large amounts of wind energy, and their studies show they can go much higher. Integrating renewables on the power grid costs less than integrating baseload sources; modern power electronics enable renewables to provide reliability services as well as or better than conventional power plants; and renewables diversify the energy mix, improving economics and resiliency. Renewables are not the primary factor undermining baseload sources – as can be seen by maps of where each is predominately located, cheap natural gas is the primary factor.

• SEIA: Solar & Renewables Benefit Grid & The U.S. Economy – Solar and renewables provide significant advantages to the national grid in terms of reliability, fuel diversity and national security. This SEIA review highlights multiple studies showing that the existing grid can handle high penetrations of renewable energy to the benefit of ratepayers, grid system operators and system performance.

In challenging the notion that the growth of advanced energy is in any way detrimental to the power grid and the economy, AEE and our industry group colleagues are not alone.

Just yesterday, Sen. Chuck Grassley (R-Iowa) sent a letter to Secretary Perry questioning the DOE study as “hastily developed” and “predetermined” to show that variable resources like wind “have undermined grid reliability.” In contrast, Grassley cited Perry’s experience in Texas, where wind energy is responsible for “enormous economic contributions” without compromising the grid. He also made the case that, in Iowa, wind “helps keep electricity costs down,” noting that Iowa utility owner MidAmerican Energy’s rates are ninth lowest nationally. 

We agree with Sen. Grassley, and we would welcome more efforts by members of Congress to stand up for the advanced energy industry. The resources serving the U.S. power grid are changing – for the better. Yes, some of the resources we have counted on in the past to keep the lights on are on the decline, but that is normal – no power plant is expected to last forever. Today – in restructured markets and traditional utilities alike – natural gas generation, renewable energy, and demand-side resources like efficiency, demand response, and energy storage are making our energy resources more diverse than ever, while increasingly sophisticated techniques are making grid management of those resources more dependable than ever – providing reliable power for those who depend on it, individuals and businesses alike. The U.S. electric power system needs more advanced energy, not less.