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Grid Reliability: The Department of Energy Throws down Red Flags on Unreliable Wind and Solar

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Grid Reliability: The Department of Energy Throws down Red Flags on Unreliable Wind and Solar

Forbes August 28, 2017
Energy & EnvironmentRegulationsTechnology / Infrastructure

Last week the Department of Energy released “Electricity Markets and Reliability,” a 154-page magnum opus on the state of America’s electricity system. It’s the perfect government report: a tutorial chock full of useful data, along with observations that provide something interpretable for everyone. Let the spinning begin.

DOE treads carefully in its new report using obfuscatory language, but nonetheless points out the obvious: a future grid based on far greater use of unreliable sources could be, well, far less reliable

One reporter observed “the final report does not reflect the type of hostility to renewable power that President Trump and others in his administration have voiced.” Meanwhile, one advocacy organization headlined the report: “US Department of Energy Officially Declares War On Renewable Energy.”

These kinds of observations, and others in the same vein, miss the point. What’s notable about the report is the absence of a monomaniacal advocacy for renewables, combined with a sober description of grid engineering and physics. That tone, by itself, is a sea change.

Regarding the politically charged question as to whether there has been premature retirement for coal-fired power plants, DOE artfully provides nine definitions for “premature retirement.” Then, rather than answer the question, DOE opts to assess “the various factors that contribute to power plant retirement trends.” [emphasis in original] Call this a dodge if you must, but it’s really just a return to more of an advisory rather than advocacy role for DOE. Another sea change.

Political color aside, the substance of the report can be distilled to three conclusions:

  • The shale gas revolution had a bigger impact on coal’s decline than did federal favoritism for renewables.
  • The grid today is in good shape in terms of reliability despite eight years of adding many gigawatts of (subsidized) wind and solar capacity.
  • And for discerning policymakers, the key takeaway from the report amounts to a go-slow for those eager to rapidly force far more VRE on the grid – VRE, variable renewable energy, is DOE’s euphemism for solar and wind.

Herein a few brief observations on each.

First, it’s indisputable that the flood of shale gas changed the landscape for electricity markets – and made it easier for utilities to bend to political pressure to retire older, less efficient coal units. Since 2007, the increase in electricity supplied by natural gas equaled 90% of that lost by coal.

But this doesn’t tell the whole “anti-coal” story. The Obama Administration’s unrealized Clean Power Plan (CPP) is an indisputable broadside against those coal plants still producing one-third of the nation’s kilowatt-hours. Although the CPP has been neutered temporarily by the courts, no one knows what comes next. That regulatory Damocles’ Sword may still motivate preemptive action by risk-averse utilities. As for the broader issue of coal jobs, the fact is regulatory hostility has caused U.S. coal miners to lose opportunities to capture a bigger share of global markets where coal demand is rising rapidly.

The second take away, that grid reliability is today in good shape without regard to the recent rise of so much inherently unreliable wind and solar capacity … is unremarkable given a basic fact. There just isn’t enough unreliable solar and wind on the grid yet to make a big difference. Tinkering with 7% of America’s electricity supply is deeply unlikely to have a deleterious effect on overall operations: last year wind didn’t reach a 6% share of U.S. electric supply, and solar was below 1%. (For more on the incredibly weird physics of grid reliability, see my earlier Forbes column.) The critical question is about the future.

So what does DOE recommend going forward? Here the report is unequivocal, if often elliptically worded. For those eager to rapidly force far more solar and wind onto the grid: go slow.

The report very ably describes the features and technical challenges of ensuring a stable and reliable grid and then offers repeated cautions, in numerous if somewhat obfuscatory ways, regarding the uncertainties associated with greater use of VRE sources.

So what does DOE recommend going forward? Here the report is unequivocal, if often elliptically worded. For those eager to rapidly force far more solar and wind onto the grid: go slow.

Among the many red-flag statements: “[M]ore work is needed to understand what can be done to maintain resilience in a variety of conditions as the grid changes over the coming years.” Of course “changes” means more VRE.

And DOE notes that the “need to accommodate VRE” will require “increased flexible operation of … other grid resources. … [that] were not intended to operate flexibly.” Engineers know what that means in terms of higher costs and lower reliability for the “other,” i.e., conventional power resources. Left unsaid is who pays for that.

We also find DOE saying that when it comes to future grid stability, “there has not yet been much analysis” and that there “are substantive engineering questions that merit further study, particularly in a future with increasing VRE levels.”

Several recent events tell us something instructive about what a future grid with higher VRE use will mean. California, with 10-fold greater solar power per capita than the nation at large, was able to comfortably ride out a sudden loss of sunlight from the August eclipse by calling upon natural gas generation and importing power from neighboring states. But if all of America chases the California green dream, and beyond, there won’t be any neighbors with 24x7 power to borrow from, and if green extremists have their way, there won’t be any gas-fired capacity as standby. So far, America has not suffered any systemic reliability failures like those seen recently, for example, on the South Australia grid where wind turbines supply 40% of electricity.

And when it comes to reliability, cybersecurity is the elephant in the room that is no longer hidden. The technologies around VRE increase cyber vulnerabilities. These challenges are deliberately excluded from this new DOE report’s purvey. (For more on the realities of green-grid cyber realities, see my earlier Manhattan Institute report.)

DOE has no authority over electricity markets. But policymakers might want to heed the advice contained in the many critical observations in this newest DOE report, perhaps most notably: “Society places value on attributes of electricity provision beyond those compensated by the current design of the wholesale market.” There is no attribute more important in a modern digital society than keeping the grid energized 24x7.

This piece originally appeared on Forbes.com

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Mark P. Mills is a senior fellow at the Manhattan Institute and a faculty fellow at Northwestern University’s McCormick School of Engineering. Follow him on Twitter here.

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