Trump’s coal push may be the disaster insurance the grid doesn’t need

28 Aug 2017

If all hell breaks loose on the U.S. power grid – a terrorist blows up a key natural gas pipeline, say, in the midst of a frigid winter — how will Americans keep the lights on?

The answer is coal, according to a growing collection of the industry’s leaders and lobbyists. Their pitch conveys an image of a nation plunged into darkness as solar farms, wind turbines and plants fuelled by gas fail to make up for the loss of coal-fired generation. Though it’s a view at least partly supported by a Department of Energy study released late Wednesday, the reality isn’t so dire.

Coal companies’ pleas for protection come as President Donald Trump vows to make good on campaign promises to support an industry hit by low-cost renewable energy and abundant gas from shale reservoirs. Energy Secretary Rick Perry called in April for his department to investigate whether rising supplies of wind and solar energy are threatening the grid’s reliability. The resulting report recommends less-stringent environmental rules for coal plants, changes in electricity trading and easier permitting for coal, nuclear and hydropower.

Coal plants “play an important role,” said David Sandalow, inaugural fellow at Columbia University’s Center on Global Energy Policy and a former Energy Department official. “But it would be costly in many ways to get locked into old notions of operating the grid when new technologies are out there.”

Grid operators have already been coping with a decline in power from coal-fired plants – most of which are designed to operate around the clock to meet electricity demand — without any major mishaps. Since 2005, 14 percent of America’s coal-burning capacity has closed, and 5 percent of the remaining 294 gigawatts is scheduled to shut, according to Bloomberg New Energy Finance. In May, coal generated just 29 percent of America’s electricity, about half the share it had when George W. Bush was president.

This week’s solar eclipse in the U.S. was a litmus test for grid operators. Though the California Independent System Operator said 3,400 megawatts of large-scale solar came off the state’s system during the event, that was less than forecast, and there were no significant disruptions to electricity service.

As more wind and solar energy is added to the power mix, new tools including battery storage are helping to smooth the transition. In March, there were 21 states with at least 20 megawatts each of storage projects in service, under construction or proposed, according to GTM Research.

Another approach is “demand response,” in which customers are compensated for altering their power usage at various times to bolster a region’s grid reliability. California, which generated 24 percent of its power from wind and solar in May on a net basis, had no major blackouts last year during the shutdown of the Aliso Canyon gas storage field following a leak.

Improved technology, including more sophisticated weather models that can help grid operators predict how much wind and solar supply will be available, has also aided the growth in renewables. And new gas-fired plants that can be ramped up or down quickly to respond to demand changes are being added to the nation’s electricity network. The result is an emerging fleet of smaller power sources that can actually make the grid more stable by reducing the chance of a single massive plant failing, Sandalow said.

“You’re putting all your eggs in one basket,” Sandalow said of relying on a few big generators.

Coal supporters, meanwhile, say that America’s growing use of gas and renewables is putting the electricity grid in peril. Gas plants can’t store enough of the fuel on site to guarantee power if trouble strikes, while coal-fired plants can stockpile months of supply, they argue. Neil Chatterjee, the new chairman of the Federal Energy Regulatory Commission, which helps monitor the nation’s electricity supply, has said coal and nuclear should be “properly compensated to recognize the value they provide to the system.”

“Where we’re going with natural gas right now and coal retirements is clearly unprecedented,’’ says Paul Bailey, chief executive officer of lobby group American Coalition for Clean Coal Electricity. “Solar and wind, we like them, but they’re not going to help maintain a resilient grid right now.”

Coal isn’t immune to supply snags, however. Stockpiles can freeze together in extreme cold, and rail delays can prevent the fuel from reaching plants at all.

While existing technology may allow renewables to account for as much as 50 percent of U.S. power generation, changes to regulation and policy are still needed to make that happen, said Prajit Ghosh, head of Americas power and renewables research at Wood Mackenzie Ltd in Houston.

Coal lobbyists say it’s impossible to predict when the country will be ready to accommodate that much wind and solar energy and, in the meantime, it’s vital to preserve coal-fired power plants. That’s part of the industry’s push to market coal plants as the energy source of last resort, a grid-scale equivalent to the candles people pull out of their closets when the power fails at home.

“The U.S. ought not to mortgage itself up to the hilt by making rash decisions that could very well harm the economy of the U.S. in 10 years,” said Luke Popovich, spokesman for the National Mining Association.

Still, developments in technology and policy are paving the way for wind and solar to gain a larger share of U.S. power generation in the coming years, Wood Mackenzie’s Ghosh said.

“There should be concerns about reliability, how renewables can impact reliability, but it’s an optimistic concern,” he said. “There are enough solutions which are being currently tested and which in all likelihood could pan out perfectly.”

Source-bloomberg