NEW REPORT: No Evidence That Changing Power Mix Endangers Electric System Reliability
Expert report by Analysis Group finds that low-priced natural gas, not renewable energy policies, is fundamental cause of coal and nuclear plant closures
Expert report by Analysis Group finds that low-priced natural gas, not renewable energy policies, is fundamental cause of coal and nuclear plant closures
WASHINGTON, June 20, 2017 /PRNewswire-USNewswire/ -- A new report by Analysis Group answers questions asked two months ago by Energy Secretary Rick Perry about the reliability and market rules of the U.S. electric power grid.
Analysis Group finds it is market forces – primarily low-cost natural gas and flat demand for electricity – that are causing some coal and nuclear power plants to retire, and not state and federal policies supporting renewable energy development. The report finds that the changing electricity resource mix poses no threat to reliability of the nation's power system.
Perry launched a 60-day review of "critical issues" on the grid on April 14. National business groups Advanced Energy Economy (AEE) and American Wind Energy Association (AWEA) commissioned Analysis Group to answer independently the questions Perry raised. The Analysis Group report has now been submitted to the U.S. Department of Energy to inform its review.
"Recently, some have raised concerns that current electric market conditions may be undermining the financial viability of certain conventional power plant technologies (like existing coal and nuclear units) and thus jeopardizing electric system reliability. In addition, some point to federal and state policies supporting renewable energy as a primary cause of such impacts," states the Analysis Group report. "The evidence does not support this view."
The Analysis Group report, Electricity Markets, Reliability, and the Evolving U.S. Power System, is available for download here.
A press conference webinar featuring authors of the report will be held at 11am ET today, Tuesday, June 20. Credentialed reporters may register for the press conference here.
"The transformation now under way in the electric power system is driven primarily by market forces," said Susan Tierney, senior advisor, Analysis Group, and one of the authors of the report, along with Analysis Group Principal Paul Hibbard. "Low natural gas prices, technology changes, and flat demand for electricity have been putting financial pressure on and leading to the retirement of older, less economic power plants. This is a natural consequence of market competition. The result is a more diverse set of energy resources on the grid that is being capably managed in a way that provides reliable electric power."
Key findings of the Analysis Group report:
"The electricity system in the United States is stronger than it's ever been," said Graham Richard, CEO of AEE. "Thanks to innovation and smart policy, we have a more diverse fuel mix, a more reliable grid, and lower electricity costs. The Analysis Group report highlights how advanced energy technologies are helping to modernize the grid and how grid operators are well equipped to manage this market change. As DOE finalizes its report on reliability, we hope the Department will incorporate these key findings, which reflect the true state of the grid."
Tom Kiernan, CEO of AWEA, said, "Like DOE, we wholeheartedly agree that reliable and affordable electricity is essential. Analysis Group's report finds that wind and other advanced energy resources, driven by markets and technological advances, are improving electric reliability and reducing costs. Past dependence on a few fuel sources has given way to a more diverse grid, which is more robust and resilient. We think this analysis will be useful for DOE's study, and we look forward to working with state and federal policymakers to implement market-based policies that will provide consumers with even more reliable electricity at lower cost."
BACKGROUND
In a memo dated April 14 to his chief of staff, Brian McCormack, Secretary Perry directed the Department of Energy to conduct a study that would "explore critical issues central to protecting the long-term reliability of the electric grid," and to analyze "market-distorting effects of federal subsidies that boost one form of energy at the expense of others," and to report back in 60 days.
On April 28, business trade groups AEE, AWEA, and SEIA sent a joint letter to Sec. Perry asking that the DOE "initiate a public process," and that the study "follow standard practice and be conducted in an open and transparent manner," noting that it is "customary" for agencies developing reports that provide policy recommendations to allow public comment on a draft, prior to the report being finalized. No reply was received. A DOE spokeswoman told Axios on May 5: "The findings will be released to the public (including stakeholders) once the study is completed this summer. The Secretary looks forward to receiving input from all parties once that occurs."
On May 16, AEE, AWEA, SEIA, and ACORE held a press briefing on documents each submitted to DOE to inform its study of the electric power system and reliability:
In their letter transmitting these materials to DOE, the groups concluded: "We believe that, taken together, these reports demonstrate that the U.S. electric power system is more diverse in its energy sources than ever before, and due to the flexible way these resources are now managed, becoming more reliable and resilient as a result."
LEARN MORE ABOUT AEE and AWEA:
Advanced Energy Economy at www.aee.net
American Wind Energy Association at awea.org
MEDIA CONTACTS:
AEE, Monique Hanis, [email protected], 202-391-0884
AWEA, Evan Vaughan, [email protected], 202-431-4640
See this statement online here.
SOURCE Advanced Energy Economy; American Wind Energy Association
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