Monday, March 16, 2015

The Clean Power Plan and Grid Reliability: Fostering the Transition to a Modernized Transmission System

By Amelia Schlusser, Staff Attorney

The debate over the potential impacts of EPA’s proposed Clean Power Plan on grid reliability is gaining steam. Critics contend that the proposed rule calls for hasty and drastic changes to the nation’s electricity resource mix, which will result in widespread retirements of coal-fired power plants and increased deployment of renewable resources. The reliability debate centers around the fact that baseload resources, such as coal plants, provide stable and predictable electricity, while renewable resources, such as wind and solar power, provide variable and intermittent power. Therefore, the argument goes, replacing coal plants with variable renewable resources may jeopardize the reliability of the electrical grid.

The reliability debate first made headlines following the release of the National Energy Reliability Corporation’s (NERC) Initial Reliability Review of the Clean Power Plan, which voiced concerns that the rule could compromise the reliability of the power grid. NERC’s report recently made headlines for a different reason. According to Greenwire, the Energy and Policy Institute recently criticized NERC for failing to disclose that Energy Ventures Analysis, a contractor that worked on the NERC report, had ties to a coal technology company. However, there is little evidence that this potential conflict of interest actually influenced NERC’s findings regarding reliability impacts.

Meanwhile, politicians, regulators, and industry representatives are becoming increasingly vocal on the potential reliability impacts of the Clean Power Plan. On March 11, regulators from Wisconsin, Wyoming, and Indiana told the U.S. Senate Environment and Public Works Committee that the proposed rule would threaten grid reliability in their states. According to Greenwire’s coverage of the committee meeting, the commissioner of the Indiana Department of Environmental Management, Thomas Easterly, noted that he was very concerned “that we will see some catastrophic results somewhere in the implementation of this plan.” Senator Jim Inhofe (R-Okla.) also argued that the rule would threaten the reliability of the grid. Jeff Burleson, Vice President of System Planning at Southern Company, recently issued a statement asserting that the Clean Power Plan will jeopardize grid reliability.  Burleson claimed that the rule would “potentially put serious reliability and operational pressures on the grid,” and that “it does so under the guise of ‘environmental compliance’.”

NRDC’s John Moore argues that the reliability argument is a bluff intended to reduce utility compliance obligations under the Clean Power Plan. Moore’s blog specifically focuses on Southern Company’s claim that the rule will jeopardize grid reliability, which is not the first time the utility has made this argument in response to new environmental regulations. Moore points out that in 2011 Southern Company argued that EPA’s mercury and air toxics standards would cause “numerous rolling blackouts” starting in 2015. In 2014, however, the company stated that it was 98% in compliance with the standards, and as of 2015, the rolling blackouts have failed to materialize. 

It’s unclear whether the Clean Power Plan’s critics are intentionally crying wolf by asserting that the rule is incompatible with the reliable delivery of electricity. However, it is clear that these reliability challengers are failing to fully consider available technologies and strategies that utilities and grid operators have successfully implemented to maintain reliability under high penetrations of renewable generation.

The reliability challengers are also overlooking the energy sector’s ability to develop innovative solutions to respond to grid reliability constraints. Utilities are investing in smart grid improvements and other technologies to facilitate integrating renewable energy onto their systems. For example, one of my previous posts discussed how Idaho Power Company developed and implemented a new forecasting tool that has improved the utility’s ability to integrate wind energy onto the grid at a cost savings of approximately $100,000 a month.

Grid operators throughout the nation are also developing strategies to integrate increasing amounts of renewable energy onto the grid without impacting reliability. For example, Columbia Grid and Northern Tier Transmission Group initiated a Wind Integration Study Team, which in turn created a Dynamic Transfer Capability Task Force to assess the potential impacts of increasing dynamic transfers of electricity between balancing areas to integrate variable renewables and maintain grid reliability. And a recent report by Navigant Research estimated that utilities would spend $107 billion through 2023 on “synchophasors and wider-area situational awareness systems” which enable grid operators to collect and transmit data and rapidly identify grid disturbances before outages occur. These innovative grid improvements help maintain reliability and functionality, and according to the North American Synchophasor Initiative, these technologies provide significant benefits for integrating intermittent renewable resources.

These examples describe only a few of the countless efforts to improve and modernize our national grid systems to accommodate the evolving U.S. energy mix. These efforts help to demonstrate the electricity sector’s ability to proactively address emerging system constraints and develop innovative strategies to maintain grid reliability. Once finalized, the Clean Power Plan will shift the composition of the electricity generating mix in the country. However, this shift will be supported by the deployment of advanced grid technologies and innovative operational strategies that will ultimately improve the functionality of the grid and help facilitate the transition to a clean, sustainable energy system.  

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