This article is the third in a series titled “Real Talk on Reliability,” which will examine the reliability needs of our grid as we move toward 100% clean electricity and electrify more end-uses on the path to a climate stable future. It was written by Michelle Solomon, senior policy analyst for the Electrification Program at Energy Innovation.
A major aspect of the Biden administration’s plans to reduce emissions from the power sector is under debate — the Environmental Protection Agency’s proposed power plant greenhouse gas emission rules, which establish emissions limits for new and existing natural gas plants, as well as existing coal plants.
In public comments and Congressional hearings, power providers and grid operators have raised concerns surrounding resource adequacy — whether there are in fact enough resources to supply energy and capacity to meet rising demand.
While we know a such a transition is possible, two main concerns continue to surface in this debate. First, is it technically feasible to ensure resource adequacy with the energy resources that would be allowable under the proposed EPA rules? And if so, how might the methods of measuring and planning for resource adequacy need to change to account for the future resource mix? Second, is it possible to bring enough resources online fast enough to replace those that are projected to retire?
The answer to each of these questions is yes — if good policy enables a managed transition that balances retirement of the old with installation of the new.
We can reach 80-90% clean electricity with existing technology
Researchers have examined deep-decarbonization scenarios and agree that the U.S. can achieve up to 90% clean electricity generation by using only existing technology. For example, the 2035 Report 2.0 found that a 90% clean grid could meet demand at all hours of the year through the addition of existing energy technologies like solar, wind and batteries, without any coal or new gas, even with increased demand from the high electrification of transportation, buildings and industry.
The Net Zero America study similarly finds that clean sources of energy can supply 70-85% of U.S. electricity by 2030. Here, the electricity mix is largely wind and solar, with hydro and nuclear remaining relatively constant while gas usage decreases by about 25% and coal generation goes to zero. The National Renewable Energy Lab research agrees that 71-90% of electricity could come from clean sources by 2030, again all with existing energy technologies.
Regional studies support the same conclusion, with GridLab and Telos Energy finding that California could reach 85% clean electricity by 2030 while maintaining resource adequacy with the addition of primarily wind, solar and batteries.
These studies indicate that the role of natural gas plants will shift increasingly toward use as capacity resources for reliability during risk periods, while their total annual energy contributions are expected to drop significantly — just as the EPA rules propose.
However, moving toward 100% clean electricity does increase complexity, modelers find. For example, in the recent “Moonshot study,” GridLab finds that there are several viable supply-side pathways to 100% clean electricity in a case study based on New Mexico. The solutions combine possible future technologies including long duration energy storage, dispatchable clean sources like geothermal, nuclear, hydrogen combustion turbines, or thermal resources with carbon capture and storage.
Priya Sreedharan, program director at GridLab and a primary author of the study, highlights the importance of not letting uncertainty in this final stage delay action on building a lot of clean energy in the present, saying, “the focus now needs to be on building out what we know we need, and not get hung up on what that perfect clean firm resource is.”
Resource adequacy should adapt for weather-dependent, energy-limited systems
Resource adequacy is undoubtably more complicated in a high renewables world, but planners can take several actions to adapt, including consistently accrediting each resource type, accounting for the interdependent nature of clean resources, and updating planning practices for changing risks.
Derek Stenclik, founder of Telos Energy and lead author of a recent paper on future capacity accreditation, emphasizes that “there is no such thing as perfect capacity. We need to recognize that all resources have challenges in meeting reliability needs,” and that the impression that there is a type of electricity generator that can be considered “firm,” or available to be dispatched at any time, is a widespread myth. Weather-related outages will continue to be an issue as power systems add renewables, so ensuring all power plants are held to the same standard is crucial.
Second, in a clean electricity future, the reliability value of each resource becomes increasingly dependent on the others. To perfectly determine each resource’s value would require complex calculations that evaluate the entire generation portfolio and the relationship between each resource. However, transparency and certainty on future accreditation values is important for those trying to bring new resources online, and sometimes we will have to “accept that none of these methods will be perfect,” says Sreedharan, in accrediting these resources to keep markets accessible and resources coming online quickly.
Third, resource adequacy analysis has long operated by identifying the time at which peak electricity demand occurs, then planning to have enough capacity available plus an additional margin of around 15% to account for any unexpected generator outages. However, this paradigm is changing rapidly as the risky periods on the grid no longer align with peak demand.
Stenclik highlights that while most planners now recognize this phenomenon and “understand that the risk hours are shifting to the evening as the sun sets,” not all yet recognize that the system risks will be “transitioning to winter — partially because of solar, but also due to cold snaps constraining gas supplies, increased electrification for electric winter heating, and the lower efficiency of electric vehicles in cold weather.”
Furthermore, considering instantaneous periods of risk will no longer suffice. Increasingly, a new limiting factor for adequacy will be whether energy in one period is enough to charge batteries or other storage technologies to supply capacity in another. While more sophisticated utilities and all grid operators already analyze risk across all hours of the year using chronological modeling, this approach is becoming more of a requirement than it has been in the past. Planners will now need to assess a diversity of portfolios against metrics like expected unserved energy and loss of load expectation that examine all hours of the year.
Beyond these factors, particularly as climate change-fueled extreme weather becomes more common, a wider set of grid assets can help reduce the cost needed to provide reliability during uncommon events, particularly transmission, demand-response and energy efficiency, which will be explored in depth in the next installment in this series.
New policies are needed to bring a managed transition to fruition
No accreditation or probability calculation will be able to avoid reliability issues if we are not bringing new resources online apace of retirements. The risk of capacity shortfall is not specifically driven by the proposed EPA rules but is a trend that has proliferated over several years. This is largely due to uneconomic coal plants closing before their previously planned retirement date while new clean resources that could make up the retiring capacity have faced barriers to entry. Regardless of the rules, grid operators, utilities and the policymakers that support them will need to deal with this phenomenon.
The interconnection queue presents one of the biggest sources of project delay and cost increases, but it is also an area where grid operators have the most control. FERC Order 2023 has reckoned with many of the sources of interconnection delay, but grid operators should go even further. One of the reforms that goes beyond Order 2023 that could represent a step-change in interconnection, is moving to an energy-only interconnection approach, which involves more limited studies and upgrades but requires resources to take additional curtailment risk.
Improved resource planning will be the foundation of a managed transition to clean energy, including long-term interregional and regional transmission planning as well as proactively finding transmission solutions to enable power plant retirements. To increase transmission capacity quickly, utilities and grid operators should utilize grid enhancing technologies and advanced conductors to upgrade the capacity of existing transmission lines.
There is an opportunity through the EPA’s proposed rule to create more certainty around the timeline for the clean energy transition that we are already undergoing. The poor economics of coal plants have been driving the transition to date, creating sudden retirements, and catching grid operators by surprise. Now, it’s time to turn the feasible clean energy future into reality.