Neither resilience nor reliability can justify the rescue of outmoded power plants

Posted by Dylan Reed and Arvin Ganesan on Sep 6, 2017 12:35:56 PM
This viewpoint from Arvin Ganesan, vice president for federal policy, and Dylan Reed, senior associate for federal and state policy at AEE, was originally published in full in Utility Dive. This is an excerpt from the full piece.
On Aug. 23, the Department of Energy (DOE) released the highly anticipated Staff Report to the Secretary on Electricity Markets and Reliability, aimed at identifying the causes of coal and nuclear plant closures and the impact of those closures on the reliability of the electric power system. As AEE argued from the beginning, the fundamental premise that Secretary Rick Perry used to initiate this study mischaracterized the primary drivers of our changing resource mix and significantly overstated the impact on grid reliability of today’s diverse and flexible resources. 

Indeed, DOE’s staff report largely confirms what industry experts have been saying all along: Competition from cheap natural gas, not renewable policies, is forcing uneconomic resources to retire, and the trend toward these new resources – both gas and renewables – is being managed by grid operators across the country without loss of reliability. To quote the report directly: “Energy and capacity markets presently provide for adequate levels of reliability.”

Nonetheless, the report managed to find ways to suggest that uncompetitive power plants are in economic trouble because they are undercompensated in the market – and since they are supposedly so essential to the electric power system, a way must be found to put them in the money. If such a way is found, it must logically come at the expense of those resources that are now winning in the marketplace – natural gas, solar, and wind generation; energy efficiency; demand response; and energy storage. Meanwhile, electricity customers should watch their wallets.

Continue reading this post on Utility Dive.