Advanced Energy Perspectives

Image courtesy of Chrishna and used under a Creative Commons license.

Severe weather events – whether hurricanes, wildfires, cold snaps, or heat waves – increasingly play a role in the lives of Americans. While extreme weather creates all sorts of problems, high on the list is the stress they put on the electric grid. Prior to this year, the 2014 Polar Vortex has been pointed to by those concerned about the ability of the electric grid to withstand severe weather events, and we’ve noted how wind and demand response helped keep the lights on during that cold snap. But in 2018, it was an expected heat wave in Texas that loomed as a potential threat to the grid. Would the Electric Reliability Council of Texas (ERCOT), the grid operator that relies more on market principles than any other in the country, be able to keep on the lights? The answer turned out to be yes – with lessons that could prove instructive to the 116th Congress when it convenes in January.  

PJM, the nation’s largest regional grid operator and the largest wholesale electricity market in the world, is at a crossroads: Can it run its markets while accommodating the ability of states to enact clean energy policies, or will it adopt new market rules that put the continuation of those policies at risk? With zero-emission credits (ZECs) supporting existing nuclear power plants in states like Illinois and New Jersey adding to the 29 states across the country already having renewable portfolio standards (RPS) that provide support in the form of renewable energy certificates (RECs) – and many of those states continuing to ratchet up RPS requirements – certain power plant operators have voiced concerns about what they see as “distortions” of the wholesale market. FERC is listening and making big moves. AEE is fully engaged in FERC’s proceedings, working to make sure that advanced energy resources are not disadvantaged in response.

What is the price of political cronyism? High, when it comes to paying power plants that are not needed to keep the lights on, just to exist. But that is what the Trump Administration is apparently getting ready to do. Or at least trying to do – an earlier attempt to do so was rejected by regulators, most of them appointees of President Trump. Not taking no for an answer, the Administration has decided to go bigger, with a bigger price tag. How much bigger? That’s what we wanted to find out.

In what feels like a never-ending showing of the movie Groundhog Day, the Trump Administration is yet again trying to bail out uneconomic power plants that are slated for retirement. This time, it looks like the Administration is using a national security approach to justify its attempt to help major campaign donor Bob Murray’s failing coal business. But once again, within the broader energy industry, the reaction against this latest scheme has been strong, with AEE fully engaged. 

Last Thursday, the Federal Energy Regulatory Commission (FERC) released a long-awaited final order on its storage and distributed energy resource (DER) docket. This is a big step toward opening up the wholesale electricity markets under FERC jurisdiction to advanced energy technologies that have not been allowed to compete. Energy storage gets an immediate boost, as regional grid operators will now have to implement market rules to let energy storage participate. Aggregated DERs, which FERC considered in this proceeding at the urging of AEE, will be on a slower path, starting with a technical conference, but are also headed toward market participation. AEE and our member companies will stay engaged until these markets are truly open to all advanced energy technologies.