Energy Secretary Rick Perry’s long-awaited grid study is finally out. But while Trump officials clearly tried to rewrite the previously leaked staff draft to give the impression that renewable energy sources are a threat to baseload power and grid resilience, they mostly botched the job.
Back in April, Perry ordered a study to back up his claims that solar and wind power were undermining the U.S. electric grid’s reliability and forcing the premature retirement of baseload nuclear and coal plants. In July, Bloomberg obtained the draft report, written by Department of Energy staff, and revealed that they found essentially the opposite, as we reported.
As far as retirement of baseload plants, the draft report report found that factors like environmental regulations and renewable energy subsidies “played minor roles compared to the long-standing drop in electricity demand relative to previous expectation and years of low electric prices driven by high natural gas availability.”
A second bombshell conclusion in the draft report was that “the power system is more reliable today due to better planning, market discipline, and better operating rules and standards.”
Both of those bombshells are nowhere to be found in the final version released late Wednesday. So what caused the baseload retirements? The final report concedes that “the biggest contributor… has been the advantaged economics of natural gas-fired generation,” and that “another factor… is low growth in electricity demand.”
But in place of the finding that subsidies for variable renewable energy (VRE) — basically wind and solar — had a minor role in shutting down baseload plants, is the conclusion that “dispatch of VRE has negatively impacted the economics of baseload plants.” And on a related note, the final version of the report states that “participants on a panel of economists at a May 2017 FERC technical conference cited state-level RPS and Federal tax credits for VRE as examples of wholesale market impacts and distortions.”
But buried deeper in the 187-page report is a finding that completely contradicts the stated conclusion of the rewritten report: “To date, however, the data do not show a widespread relationship between VRE penetration and baseload retirements, as shown in Figure 3.28.”
Figure 3.28 clearly shows that coal and nuclear retirements (brown dots) have no correlation with variable renewable energy penetration.
Nonetheless, in his letter accompanying the report, Perry asserts that “It is apparent that in today’s competitive markets certain regulations and subsidies are having a large impact on the functioning of markets, and thereby challenging our power generation mix.”
Not only were renewables not a major factor in coal and nuclear retirements, but the final DOE study also concludes that the grid is more reliable than ever. It’s just not as blunt about it as the draft was.
You have to read to page 63 to find this about the crucial metric of Bulk Power System (BPS) reliability:
BPS reliability is adequate today despite the retirement of 11 percent of the generating capacity available in 2002, as significant additions from natural gas, wind, and solar have come online since then. Overall, at the end of 2016, the system had more dispatchable capacity capable of operating at high utilization rates than it did in 2002.
So, after integrating all of that wind and solar while shutting down all that baseload power (mostly coal), the grid actually has more flexibility than it did a decade and a half ago.
But Perry mentions nothing about that in his letter, and the political team who wrote the findings can’t bring themselves to say any more than “to date, wholesale markets have withstood a number of stresses.” But then they quickly seek to raise doubts about the future, warning that “market designs may be inadequate given potential future challenges. VRE—with near-zero marginal costs and if at high penetrations—will lower wholesale energy prices independent of effects of the current low natural gas prices.”
Pretty scary, unless you stop to realize that if the Trump administration wasn’t committed to diminishing renewable energy sources and boosting coal at every opportunity, they would actually be bragging about lower wholesale energy prices in the future.
And again, buried on page 123 of the report is that statement: “Increasingly, VRE also performs a price stabilizing role—wind, solar PV, hydropower, and geothermal generation offer near zero-marginal-cost electricity. To the degree that VRE and nuclear can stabilize the short run cost of bulk power, those resources could also improve the month-to-month manageability of customer bills.”
In other words, renewable energy helps stabilize prices and make Americans’ electricity bills more manageable. And, as we’ve learned from this study, renewables weren’t a major player in the shutdown of baseload coal and nuclear, and the grid is more reliable than ever.
Seems like the Perry report proves we need more renewables.
Andrew5329 on August 24th, 2017 at 16:32 UTC »
Huh? I read the summary section and everything they said made common sense.
Even the line they allegedly removed from the draft shouldn't be controversial either, load management should be more reliable than the past with growing integration of computerized management. That doesn't damn or vindicate renewables.
FrankDrakman on August 24th, 2017 at 16:06 UTC »
I don't know what has happened in any individual US state, but here in Ontario, Canada, our Liberal government embarked on a "green" energy plan, starting just after 2001. They offered 20-year fixed price contracts for wind at C$.80/kWh, when consumers were paying about C$.05/kWh (provided mostly by nuclear and hydro, but also some coal and gas fired plants). Solar was .40/kWh, I believe. My home rates have more than tripled from what they were, and the province of Ontario loses millions of dollars daily as wind and solar power that must be taken but can't be used is sold at a loss to NY state.
The situation has gotten so bad that the current Premier is borrowing money - note that Ontario is one of the most highly indebted jurisdictions in North America - to provide relief on monthly electricity bils. So, from my point of view and that of millions of my fellow Ontarians, it has done nothing to make my electricity or my provincial tax bill "more manageable", or to "stabilize" prices.
Again, don't know what's happened in the US, but I saw the headline, and had to contribute some contrary evidence.
OliverSparrow on August 24th, 2017 at 14:40 UTC »
So here is the actual report. I suggest that people actually read this, and not secondary sources with their own ideological flags to fly.
The summary starting on page 10 is solid and professional. It recognises that gas, and VRE, are both having a negative effect on traditional baseload plant, and that to retain current levels of reliability, policy action is needed. (VRE = Variable Renewable Energy).
Section 3 is about the changing portfolio of capacity. Fig 3 suggests that the retiral peak is behind us, dating to 2015. (Fig 3.8 shows 'peak coal' plant building, around 1975. These are old, old plant that have now gone.) Fig 3.19 gives the extraordinary story of US gas in a single chart.
Section 3.7 (p 47) gives developments in VREs, this subReddit's baby. Fig 3.25 gives the percentage of US electricity generated from these sources. A stable 8% comes from hydro and biomass. Newer renewables, mostly wind, take that up to 15%. So 7% of the total comes from these.
Section 3.7.1 explores the drivers for VRE expansion. These are complex - a list of headings goes on for five lines - but are primarily economic. Table 3.5 looks at subsidies offered to all power sources in 2013. Coal 6%, Gas 4%, Nuclear 10%, Renewables 72% of the total offered. However, they note that this year, like most others in recent history, was subject to specific and unique events. "There is no complete multi-year assessment available that describes and analyzes the Federal subsidies and support provided to different generation technologies over time."
Section 4 looks at reliability and resilience. The text notes that subsidising the introduction of VREs will, inevitably, impact on baseload provision. Policy measures are needed to ensure stable supply. Their three findings are that (1) diversity of supply is intrinsically useful in promoting resilience. (2) One of the greatest challenges to integrating VRE lies in managing its effects (variability, uncertainty, location specificity, non-synchronous generation, and low capacity factor) on grid operations and planning. (3) There are tradeoffs between multiple desirable attributes for the electric grid. A more reliable and resilient system may be more costly than the least-cost system. [...] Infrastructure hardening and grid recovery and restoration strategies require advanced planning and investment. Table 4.1 assesses the various storage options. Flow batteries win out.
Fig 4.9 discusses various ways to integrate VREs, by cost, subdivided by various aspects of power supply, such as market efficiency, flexibility, storage. Fig 4.11 gives the famous "Duck" curve. Fig 4.13 maps reliability against various supply options. Sun and wind don't do well.
There are other sections and a huge mass more. I hope that this excerpt is helpful.
If there is a pro-coal strategy, it is embedded in the perfectly reasonable desire to keep the system reliable. Indeed, reliability and diversity are stressed throughout. Government regulators have to balance a number of variables: reliability, low cost, emissions, geographical spread and labour continuity. If doing this doesn't come up with the result that you want, then you have to argue for a different balance.