For years some have expressed concern that the variability of solar power and wind power could impact the reliability of the US electric grid. But a new report out from the Analysis Group finds that there’s no evidence that changing the US’s power mix is impacting the grid’s reliability, even as Energy Secretary Rick Perry has questioned whether renewables are impacting the grid in a negative way.
“Recently, some have raised concerns that current electric market conditions may be undermining the financial viability of certain conventional power plant technologies (like existing coal and nuclear units) and thus jeopardizing electric system reliability,” the report stated. “In addition, some point to federal and state policies supporting renewable energy as a primary cause of such impacts. The evidence does not support this view,” it concluded.
The report, Electricity Markets, Reliability, and the Evolving U.S. Power System, is finds that market forces are the primary drivers for causing coal and nuclear power plants to retire—sometimes years, if not decades earlier than originally expected. The report also finds that state and federal policies supporting renewable energy aren’t to be blamed. However, the low cost of natural gas and flat demand for electricity are the major culprits for the early retirements.
The report suggested that the term “Baseload” should also be retired. It found that the variety of resources including wind and solar is providing reliable electric generation and working with gas-fired resources to provide both around-the-clock power. It also allows the electric grid more flexibility to cycle and ramp as needed to meet and sustain bulk power system reliability objectives in the least expensive manner possible.
“The transformation now under way in the electric power system is driven primarily by market forces,” said Susan Tierney, senior advisor, Analysis Group, and one of the authors of the report, along with Analysis Group Principal Paul Hibbard. “Low natural gas prices, technology changes, and flat demand for electricity have been putting financial pressure on and leading to the retirement of older, less economic power plants. This is a natural consequence of market competition. The result is a more diverse set of energy resources on the grid that is being capably managed in a way that provides reliable electric power.”
“Like DOE, we wholeheartedly agree that reliable and affordable electricity is essential. Analysis Group’s report finds that wind and other advanced energy resources, driven by markets and technological advances, are improving electric reliability and reducing costs,” said Tom Kiernan, CEO of AWEA. “Past dependence on a few fuel sources has given way to a more diverse grid, which is more robust and resilient. We think this analysis will be useful for DOE’s study, and we look forward to working with state and federal policymakers to implement market-based policies that will provide consumers with even more reliable electricity at lower cost.”
The report was commissioned by Advanced Energy Economy (AEE) and American Wind Energy Association (AWEA) as Perry issued a 60-day review of “critical issues” to the grid on April 14. The report is aimed at answering the questions Perry asked about the nation’s electric grid and was submitted to the U.S. Department of Energy to inform its review. They and other renewable energy organizations and supporters requested that the process be open and public, but thus far Perry has not responded to their requests.
“The electricity system in the United States is stronger than it's ever been,” said Graham Richard, CEO of AEE. “Thanks to innovation and smart policy, we have a more diverse fuel mix, a more reliable grid, and lower electricity costs. The Analysis Group report highlights how advanced energy technologies are helping to modernize the grid and how grid operators are well equipped to manage this market change. As DOE finalizes its report on reliability, we hope the Department will incorporate these key findings, which reflect the true state of the grid.”
The report found that highly efficient new gas-fired electric generators that have come online since 2000 are the main reason older, merchant generating assets like coal-fired power plants are shuttering earlier than anticipated. At the same time these new plants are producing savings for consumers. To a lesser extent the report found that advanced energy technologies and state policies are reducing the profitability of less economic assets like coal-fired power plants.
The report builds on a growing body of evidence showing that renewable energy is a benefit to the US energy industry. Previous reports have come from AWEA, AEE, the Solar Energy Industries Association and the American Council on Renewable Energy, that show the positive impact on renewables and natural gas on the grid.Tweet