On December 9, the Federal Energy Regulatory Commission
(FERC) announced that it will convene a series of technical conferences early
next year to discuss whether EPA’s Clean Power Plan, as proposed, will threaten
the reliability of the electricity grid. According
to Energywire, FERC’s announcement was in response to electric industry
stakeholder concerns that the proposed 111(d) rule will negatively impact grid
reliability and wholesale electricity markets.
In November, the North American Electric Reliability
Corporation (NERC) released
a report addressing potential reliability implications associated with the
proposed rule’s implementation. The report, which did not represent a “final
and conclusive reliability assessment” of the proposed rule, called for a
thorough analysis of the rule’s potential impacts on grid reliability. Unsurprisingly,
NERC’s report triggered extensive outcry from industry groups and conservative
lawmakers, opposing the rule’s implementation. The U.S. House of
Representative’s Energy and Commerce Committee website claimed that NERC’s
report “warned
that the Obama administration’s power plant proposal would threaten the
nation’s electric reliability.”
FERC subsequently decided to get involved to help ensure
that state implementation of the Clean Power Plan’s requirements maintain grid
reliability. FERC Chairman Cheryl LaFleur promoted the opportunity these
technical conferences will provide to bring diverse stakeholders together, stating,
“[FERC]
clearly has a role to play in ensuring that the nation’s energy markets and
infrastructure adapt to support compliance with the proposed Clean Power Plan.”
The concerns over the Clean Power Plan’s implications on
grid reliability are both real and justified. The rule’s potential reliability
impacts, however, are entirely surmountable. While the final rule will almost
certainly encourage extensive retirements of inefficient coal-fired power
plants, these retirements need not result in the “reliability
crisis” many of the rule’s critics anticipate. Coal-fired power is not an
essential component of a reliable electricity system. NREL’s Renewable Electricity Futures study concluded that we can
feasibly integrate high levels of renewable energy onto the grid and could
obtain 80% or more of our electricity from renewable sources by 2050. By
investing in transmission system upgrades and optimizing grid flexibility, we
can build a reliable, sustainable energy system devoid of coal-fired
generation.
EPA’s proposed Clean Power Plan provides states with
sufficient flexibility to upgrade their electricity systems without
compromising grid reliability. The proposed rule encourages states to replace
aging coal generation with renewable energy resources. While renewable energy
sources such as wind or solar are variable, and thus not ideal baseload energy
resources, states can implement a number of programs and policies to integrate
this energy onto the grid without compromising reliability. For example, states
can implement robust energy efficiency, energy storage, and demand response
programs to offset electricity demand and alleviate reliability constraints.
States can also improve grid operations by implementing intra-hour transmission
scheduling and enabling dynamic transfers of variable generation between
balancing areas. These practices enable states to obtain renewable energy from
a broader geographic area and mitigate the impacts from localized weather
events. For example, if a state confines all of its solar energy resources into
one area, cloud cover in that area could threaten grid reliability. If the
state instead develops solar energy resources in a variety of areas, cloud
cover in one area would have minimal impact on the grid. The proposed Clean
Power Plan’s flexible approach thus enables states to replace coal-fired power
with renewable energy without compromising grid reliability.
Unfortunately, a number of states are independently limiting
the flexibility the proposed rule would provide. According to
ClimateWire, six states have already passed laws limiting regulators from
implementing the final 111(d) rule “beyond the fence line” of their coal-fired
power plants. In other words, these states can now only achieve compliance with
their final 111(d) requirements by improving efficiency and decreasing
emissions at their existing coal plants. These laws reflect the states’
opposition to the Clean Power Plan, but they also constrain their ability to
implement the final rule without threatening grid reliability. Ultimately, if
EPA finalizes a rule that sets emissions standards based on the
beyond-the-fence-line approach and these states refuse to revise their new
laws, these states may find themselves operating pursuant to a federal
implementation plan that gives them even less flexibility.
The Clean Power Plan represents an important step in
transitioning our national electricity system away from polluting fossil fuels.
The proposed rule gives states flexibility to reduce emissions without
compromising the reliability of the grid, and states should take full advantage
of the flexibility the final rule may provide.
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