- New research sponsored by the U.S. Chamber of Commerce concludes coal and nuclear generation are necessary to keep power prices in check, but the two forms of energy are also among the most threatened on the United States' grid.
- The report, conducted by analytics firm IHS Markit, concluded power prices are 27% less expensive than they would be without significant coal and nuclear contributions.
- The demise of coal and nuclear generation would lead to the loss of 1 million jobs and a $158 billion hit to our economy, according to the Chamber's Global Energy Institute.
A month after the U.S. Department of Energy released a study examining grid reliability and baseload generation, the Chamber of Commerce's analysis looks to put a dollar-figure on the value nuclear and coal generation bring to the table.
“Nuclear energy and coal are the most threatened parts of our current electricity mix, but they are both extremely important to maintain reliability and to keep costs in check,” Karen Harbert, president and CEO of the U.S. Chamber’s Global Energy Institute, said in a statement. “Subsidies, mandates, and market conditions have combined to place our current diverse portfolio at serious risk. Policymakers must be focused on maintaining balance, and reject approaches that limit our options.”
DOE's study, released in August, concluded cheap natural gas to be the greatest driver of baseload power plant retirements, followed by flat power demand, environmental regulations and the growing penetration of renewables on the grid.
Notably, the DOE study did not find renewables to be a threat to grid reliability. But the Chamber's report examines the power mix from a financial standpoint, concluding that consumers would have about $850 less per year in disposable income.
The analysis modeled what the price of electricity would have been from 2014-2016 "if America’s most reliable and resilient electricity resources like nuclear and coal were mostly removed from the mix," according to a statement.
According to the report, the resilience of the current diversified electricity portfolio to the delivered price risk profile of the fuel inputs to electric generation "reduces the variability of monthly consumer electricity bills by
about 22% compared with the less efficient diversity case."
“While there is an important place for all types of resources, being too dependent on less reliable sources leaves us extremely vulnerable, especially during events like the Polar Vortex or a fuel supply disruption," Harbert said. "These costs are often not considered during discussions about electricity sources.”
The Edison Electric Institute issued a statement responding to the new analysis, saying it "reinforces the vital role 24/7 energy sources play in sustaining a secure, reliable, and resilient energy grid."
Executive Vice President of Business Operations and Regulatory Affairs Phil Moeller said competitive electricity market rules should "promote a balanced energy mix and recognize the role that all generation sources play in maintaining the reliability and resiliency of the energy grid."
Moeller, a former commissioner at the Federal Energy Regulatory Commission, also said that wholesale electricity markets "should address price formation and the valuation of essential reliability services for customers. "