Grid Operator Study Shows Trump Bailout of Coal and Nuclear Plants is Unnecessary

The largest regional electric grid operator in the nation sees “no imminent threat” to the reliability of its system, despite the closure of several coal and nuclear plants in the mid-Atlantic and Midwest regions.

PJM Interconnection LLC released a fuel security study Thursday that said there are “no issues” with powering the grid network, even as it loses more than 15,000 megawatts of generating capacity through mostly coal and nuclear plant retirements.

The study was prepared in response to a grid resilience proceeding launched by federal regulators in January. It throws cold water on the Trump administration’s efforts to justify a nationwide coal and nuclear plant bailout due to an impending threat.

Global Nuclear Power Industry 2018

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Fuel supply could become an issue in the PJM territory during extreme circumstances in the future — such as a prolonged cold spell combined with a loss of natural gas supplies — but the issue could be resolved without government interference, the grid operator concluded.

PJM has made statements in the past about its opposition to a coal and nuclear power bailout and now has an extensive study to support its stance, the Union of Concerned Scientists noted.

“PJM took 320 scenarios to stress test the ability to handle extreme cold,” Mike Jacobs, senior energy analyst at the Union of Concerned Scientists, said Thursday in a statement. “They found a large amount of retirements in coming years are not a threat because the electric system is built as a network for reliability, and reserve margins are kept year after year to ensure reliability.”

President Donald Trump’s Department of Energy (DOE) had cited national security concerns as a reason for allowing Trump to require regional grid operators or electric utilities to purchase enough power from coal and nuclear plants to prevent them from closing.

The study found that PJM’s system, which serves 65 million people in 13 states and the District of Columbia, is reliable and can withstand extended periods of highly stressed conditions.

“Even in an extreme scenario, such as an extended period of severe weather combined with high customer demand and a fuel supply disruption, the PJM system would still remain reliable,” the grid operator said, effectively dismissing the administration’s argument for why coal should be saved.

In early June, Trump officially ordered DOE to look into ways to save coal and nuclear plants from retirement. The Trump administration has long argued that coal and nuclear power plant retirements pose a threat to the stability of the U.S. electric grid; plants have been retiring in record numbers over the past few years.

But a report commissioned by Energy Secretary Rick Perry last year found that these retirements were the result of a decline in electricity demand and cheaper natural gas. It also found that coal and nuclear power plants closing down did not pose a threat to the stability of the grid. These findings were echoed in this week’s report.

Andy Ott, president and CEO of PJM, on Thursday reiterated his opposition to Trump’s plan for a federal bailout of coal and nuclear plants. “Government intervention is unnecessary,” Ott told reporters.

In the stress test on its grid, PJM found that even accounting for all the announced retirements of coal-fired and nuclear plants over the next five years, the system would remain reliable even if the region was hit with extreme winter weather combined with disruptions of natural gas pipeline supply.

“PJM’s stress test study is further evidence that the Trump administration’s efforts to force taxpayers and electricity customers to pay tens of billions of dollars to bail out old, uneconomic coal plants are nothing more than political graft for billionaire coal plant executives who helped elect him,” Mary Anne Hitt, senior director of Sierra Club’s Beyond Coal campaign, said Thursday in a statement.

Since Trump was elected president in 2016, more than 40 coal plants have retired, according to the Sierra Club. Not one of them caused any major electricity disruptions, the group emphasized.

“The Trump administration’s talk of reliability issues with coal plant retirements has nothing to do with keeping the market economic and resilient, and everything to do with pay-to-play politics,” Hitt said.

The United States is on track this year to “easily exceed” a previous annual record of 14.7 gigawatts in coal retirements, losing 15.4 gigawatts of capacity, according to a recent report from the Institute for Energy Economics and Financial Analysis (IEEFA). The research organization expects this retirement trend to continue in coming years.

The current U.S. coal fleet still sits at about 246 gigawatts of capacity. But retirements forecasted at 36.7 gigawatts from the beginning of 2018 through 2024 will reduce that capacity by 15 percent.

The Trump administration’s plan to subsidize the coal industry has nothing to do with grid resiliency or energy security, according to IEEFA. The White House is simply picking a favorite in the battle for market share across the U.S. electricity generation sector.

Coal-fired power plants release more greenhouse gases per unit of energy produced than any other electricity source. By phasing out the burning of coal for power generation and making a more rapid switch to renewables, the world would have a better chance at averting catastrophic climate change.

The coal industry, “sensing an existential crisis,” over the past year and a half has waged an intense lobbying campaign for a federal bailout, IEEFA said. The fight has been led by two companies, Murray Energy and FirstEnergy, that have close ties to the administration, according to the group.

Source: Renew Economy
Date: Nov 5, 2018