The Energy 202: Perry’s electric grid draft draws some blanks

Source: By Dino Grandoni, Washington Post • Posted: Wednesday, July 19, 2017

Energy Secretary Rick Perry delivers a message to the media in Mexico City in July. (AFP PHOTO / ALFREDO ESTRELLA)

After attending a meeting in April with other energy ministers from Europe, Canada and Japan, Energy Secretary Rick Perry wrote a memo to his department saying there was “notable concern” among his foreign counterparts “about how certain policies are affecting, and potentially putting at risk, energy security and reliability.”

The issue Perry raised was this: Could the recent changes in the way the United States generates electricity —  over the past decade, a spate of coal and nuclear power plants closed as wind, solar and especially natural-gas generation picked up — mean the United States would not have enough power plants capable of running 24/7 and and delivering electricity when consumers demanded it? Is it enough, in short, to make sure the lights reliably turn on?

To answer that question, Perry commissioned a comprehensive study into “protecting the long-term reliability of the electric grid.” Now an early draft of that study has been leaked to the press — first to Bloomberg News and later to other outlets, including The Washington Post.

This is just the draft and not the final version, but what’s notable about this first pass is that it gets only half the job done.

The draft study compiles factors that have hastened the closure of so-called “baseload” power plants, or ones that run continuously. The non-political appointees at the Energy Department that completed this draft found that while a combination of low natural-gas prices, new environmental regulations and growth in wind and solar have all undercut older coal and nuclear plants, it is the gas boom that has fueled most of the decline.

“Costly environmental regulations and subsidized renewable generation have exacerbated and accelerated baseload power plant retirements,” the draft said. “However, those factors played minor roles compared to the long-standing drop in electricity demand relative to previous expectations and years of low electric prices driven by high natural gas availability.”

The recommendations section of the draft, where Perry’s office will be able to make its mark on the study, was left blank.

The leaked report’s language “may make it harder to sell the story that supporting renewables is detrimental to the grid,” said one Energy Department employee who requested to remain anonymous because of the sensitive discussions. “That was the angle they were initially taking.” For example, the study chose to ignore forms of renewable energy actually capable of 24/7 generation, such as geothermal and biomass, because they are “not as prevalent or widespread as gas, coal and nuclear plants.”

But even stranger to experts who reviewed the draft, the study currently does not attempt to answer the second-order question of what effect, if any, fewer big coal and nuclear plants would actually have on electric-grid reliability.

That seemed to be the whole point of the study.

“The striking thing about the findings at the beginning is that there is almost nothing about reliability in there at all,” said David M. Hart, a professor and director of the Center for Science, Technology, and Innovation Policy at George Mason. “It’s all about baseload retirement. My understanding was that the big question was, how does that affect reliability? And there’s almost nothing in this draft that says anything really definitive about that.”

Some environmental groups, including the Natural Resources Defense Council, see the term “baseload” power as outdated due to a pair of recent and unrelated trends — a drop in cost of wind and solar energy and a rise in natural-gas production.

The issue with wind and solar energy — so-called variable renewable energy — is that those sources only generate electricity when the wind is blowing or the sun is shining. But, the thinking goes, natural gas generators can be fired up during such downturns when renewable production is low to meet electricity needs. In contrast, it is more costly and time-consuming to ramp up nuclear and coal plants when needed.

“Availability of baseload power and electricity reliability are not exactly the same thing,” said Trevor Houser, a partner and energy expert at the Rhodium Group, a research consultancy. He co-authored a study on the decline of U.S. coal that was cited in the DOE draft.

This is, of course, a draft, and that analysis may be forthcoming. But the question of whether that combination of gas, wind and solar is enough to make sure the lights reliably turn on was always going to be a difficult one to answer in the tight 60-day window Perry requested, according to Dan Reicher, executive director of the Steyer-Taylor Center for Energy Policy and Finance at Stanford and a former Energy Department official in the Clinton administration.

“To be fair,” he said, “that’s a much more complicated piece of analysis.”

Chris Mooney contributed to this report.