- A new analysis from the U.S. Department of Energy's National Energy Technology Laboratory (NETL) concludes additional natural gas pipeline capacity and baseload generation units, such as coal and nuclear, are "critical" to maintaining grid reliability and affordable electricity in the Eastern Interconnection during extreme weather events.
- Coal power advocates argue that the continued retirement of coal-fired generating units threatens grid reliability and could lead to double-digit spikes in electricity prices in several wholesale markets, but clean energy advocates counter that renewables are now the cheapest energy option and can keep the grid operating reliably.
- According to the NETL report, a "conservative" analysis shows investment in new pipeline capacity of more than $1 billion is needed to maintain reliability, though dual-fueled plants can partially relieve peak demand.
As more wind and solar energy comes online, the new DOE study questions whether those intermittent resources can maintain reliability in extreme weather.
“As the power sector relies more and more on natural gas and renewable sources for power generation, infrastructure must keep pace with this growth,” NETL Director Brian Anderson said in a statement.
While DOE is continuing to assist in the development of energy storage technologies, "we’ve seen how periodic winter weather events exert more pressure on the electricity system and associated natural gas infrastructure today — highlighting the important attributes that coal and nuclear power generation bring to the electricity mix," Anderson said.
The decline of coal-fired generation has accelerated in recent years, as renewables and gas have become more affordable. Over 10 GW of coal-fired power was retired in 2019, according to ScottMadden, and natural gas surpassed coal as the number one producer of electric power in 2016. In April and May of 2019, renewable energy supplied more power than coal for the first time.
Electric generation from coal has decreased 32% in the past four years, according to analysis from ScottMadden.
NETL's report examines the near-term economic and reliability costs associated with expanding the natural gas generation network. The analysis concludes dual-fueled plants can partially relieve peak demand for natural gas, "but it will be difficult to maintain adequate fuel availability to meet that demand when more coal and nuclear resources are lost."
According to the DOE research, there is a need for additional pipeline capacity as thermal generating units are retired.
"Natural gas deliverability constraints lead to high fuel and electricity price spikes," the report find. It concludes those spikes are "exacerbated by the continued retirements of thermal units," which are expected to top 44 GW through 2024.
"Conservatively, an investment of $470 million to $1.1 billion over that already entrained in the long-haul natural gas transmission system is identified to avoid even worse outcomes," the report estimates.
Industry group America's Power, which advocates for the country's coal-fired fleet, says the report shows the continued retirement of coal-fired generating units could lead to a 35% increase in electricity prices across several wholesale markets including ISO New England, New York ISO, PJM Interconnection and the Midcontinent ISO.
"The nation’s coal fleet is needed to ensure the reliability and resilience of the grid and to reduce energy costs to consumers," the group said.
If weather conditions are extreme and coal retirements accelerate, electricity costs would increase by $29 billion through 2024, according to America's Power.
"On the other hand, if neither announced nor at-risk coal units retired, demand during extreme weather would lead to a cost increase of only 2.5%," according to America's Power — about $2 billion across the same period.
Clean energy advocates, however, say the report is an example of bias coming from the Trump administration, which has sought ways to keep coal generation online.
"This report simply doesn't hold water and is out of step with the views of modern energy economists," Mary Anne Hitt, senior director of the Sierra Club's Beyond Coal Campaign, told Utility Dive. "Coal is the most expensive energy resource in the country."
Coal is particularly more expensive when economic, health and climate risks are factored in, said Hitt. The research is "yet another example of the Trump administration using its platform to show a clear bias for coal," she said.