February 15, 2019 at 5:00 am ET
You have perhaps noticed that with the electricity system, things do not always happen as planned. For example, despite federal subsidies and state mandates requiring the use of renewables, solar and wind combined produce just 8 percent of the nation’s electricity.
In the real world, natural gas, coal and nuclear produce much more electricity than wind and solar.
Instead of putting renewables on the same footing as other competing energy sources, solar and wind are disrupting the power system. There are hidden costs from this that must be addressed — or else consumers could be exposed to punishing volatility in electricity prices and a loss of power at times of high demand.
Solar and wind energy produce power intermittently — when the sun is shining or the wind is blowing — and that requires utilities to have power available from conventional plants to provide backup power when needed.
One example, during the recent polar vortex, temperatures plummeted to below zero in large parts of the Midwest and Northeast. It was coal and nuclear power that delivered additional electricity that prevented serious shortages.
Also, changes in our electricity system have led to the shutdown of hundreds of coal plants and reductions in the U.S. nuclear fleet. In the years ahead, electricity reliability for millions of Americans hinges on correcting these problems, because coal and nuclear power supply 50 percent of the nation’s electricity, and we can ill-afford to lose either one.
There is much debate about what to do, especially in the PJM region, which provides power to 60 million people in all or parts of 13 states and the District of Columbia, extending from the mid-Atlantic to the Midwest. No one-size-fits-all solution exists because different market conditions vary significantly from one state and one region to another. But doing nothing is the worst plan possible.
The United States is quickly becoming over-dependent on one fuel for electricity production — natural gas. That’s problematic, because gas has a history of price volatility. As increasing amounts of natural gas are exported to countries around the world in the form of liquefied natural gas, the cost of natural gas is expected to climb — and that will affect the price of electricity.
If current trends persist, any one of a number of things could go wrong with the electric grid, such as a cyberattack or sudden loss of generation. The need for power as our digital economy grows also poses a challenge.
What is striking is what generally is not discussed: reconfiguring reserve margins to provide prudent insurance against sudden problems in the electricity system while bolstering baseload power capacity. That agenda is anathema to grid operators, particularly the PJM Interconnection.
Recently, senior executives of four large electric utilities in the region summed up the problem in a sharply worded letter to PJM. They chastised PJM for not recognizing the serious stresses that are building below the surface of the electricity system.
Over-estimating the contribution from renewables and natural gas could ramp up power prices, while accelerating the retirement of efficient coal and nuclear plants, they warned. And they criticized PJM for undervaluing coal and nuclear power for their roles in providing fuel security and energy diversity.
Baseload power plants supplying electricity around the clock, day in and day out, are an absolute necessity. But there’s something seriously wrong with the markets in which they’re operating — which do not value baseload capacity when it is needed, do not provide value for fuel diversity and assume that natural gas prices will stay low and stable for the next 40 to 60 years.
PJM has the power to change. Let’s hope it uses that power.
Dr. J. Winston Porter is a national energy and environmental consultant, based in Atlanta and was an assistant administrator of the Environmental Protection Agency in Washington, D.C.
Morning Consult welcomes op-ed submissions on policy, politics and business strategy in our coverage areas. Updated submission guidelines can be found here.