Trump Power Study Riles Trade Groups Before It’s Released

Source: By Patrick Martin, Bloomberg • Posted: Wednesday, June 21, 2017

Critics aren’t waiting for opening night to pan a Trump administration study on the U.S. power grid they believe will demonize renewable energy while promoting coal and nuclear generation.

The report, ordered up by Energy Secretary Rick Perry and expected this month, will examine whether policies that favor wind and solar energy are accelerating the retirement of coal and nuclear plants needed to ensure reliable power supplies, according to an April 14 memo obtained by Bloomberg News. Two trade groups released a report in support of renewables Tuesday.

Since taking office, President Donald Trump has reversed policies enacted by Barack Obama that helped solar and wind developers, even as a glut of cheap natural gas from shale continues to pressure coal-fired power generators out of business. Critics fear Perry’s report will take on the talking points of fossil fuel producers and muffle science-backed programs that endorse renewable power.

“A report that comes out that supports the conclusion that baseload generation is needed for a reliable grid and that renewables and certain policies are leading toward deterioration of reliability is problematic for a number of reasons,” said Arvin Ganesan, vice president of federal policy at Advanced Energy Economy, a group that promotes clean energy.

Perry’s study on electricity markets and reliability will cover power markets and “critical issues central to protecting the long-term reliability of the electric grid,” according to the April memo.

In a preemptive strike, Advanced Energy Economy and the American Wind Energy Association released a separate study Tuesday showing that market forces such as new technologies and the emergence of shale gas are behind coal and nuclear plant retirements, not policies supporting renewable energy.

“All we have to go on is the public comments,” Ganesan said in an interview. “We’re putting this out in advance of a report coming out to try and inform the conclusions the report might make.”

Tom Pyle, who led Trump’s Energy Department transition team, called the backlash over Perry’s report overblown.

For more on the long-term global outlook for renewable energy, click here

“I think it’s perfectly fitting for an incoming secretary to want to get a perspective on these issues in hopes there is a role for the department to ensure we don’t have trouble keeping the lights on,” Pyle, president of the American Energy Alliance, a conservative, fossil fuel-oriented advocacy group, said in an interview. “It feels like a coordinated attack on a study that was largely designed to be instructive.”

Clean energy may capture a bigger share of the U.S. power market, regardless of Trump’s energy policy. By 2040, renewable resources such as wind and solar power will supply just as much of America’s electricity demand as gas, according to a Bloomberg New Energy Finance outlook. Globally, the cost of renewable power is dropping so quickly that gas will never become the dominant fuel, the report showed.

Affordable Energy

And while the report could recommend changes to the Federal Power Act, which directs how generators are dispatched during emergencies, major changes to energy legislation are unlikely, said Jeff Navin, acting chief of staff for Ernest Moniz, Obama’s energy secretary.

“Using that law to “to favor one source of generation over another would certainly be unprecedented, and it certainly won’t hold up in court,” Navin said, in an interview.

Charles E. Jones, chief executive officer of coal and nuclear operator First Energy Corp., told analysts on an April earnings call that the Akron, Ohio-based company may delay a bankruptcy filing for one of its units until the study is released.

Fossil Fuels

“I am pleased the Trump Administration and Secretary Perry recognize the importance of fuel diversity in maintaining clean, reliable and affordable supplies of electricity,” Jones said in a statement provided to Bloomberg.

Howard Crystal, a senior attorney Center for Biological Diversity, said that assumptions in the April memo may translate into recommendations that support fossil fuel generation. The memo notes that coal and nuclear baseload generation are in decline, a trend that may create reliability issues.

“This grid study is a veiled attempt by the Trump administration to keep dirty and dying power plants on life support by demonizing renewable energy,” Crystal said in a June 14 statement. “It’s very possible that big polluters had a direct hand in developing the study.”

The American Wind Energy Association co-funded the study from the Analysis Group, a consultant with expertise in energy that serves clients including energy producers, suppliers, consumers and tribal governments.