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NERC 10-Year Grid Reliability Report Contains Nuanced Warnings That Many Fail to Understand

Greentech Media recently published another article claiming that there is a new report that supports its contention that the NOPR – Notice of Proposed Rulemaking to establish a Grid Resilience Pricing Rule – Sec. of Energy Perry sent to FERC is misguided.

I cannot help but wonder if the author read the report.

If he did, I then have to wonder about his reading comprehension skills.

It’s difficult to get through the executive summary without opening a new window to begin searching for a decent deal on a whole house generating system. Of course, such a system wouldn’t be of much use if there are physical or cyber security issues that interfere with fuel delivery. We don’t yet have the option of a truly capable off-grid generating system remotely similar to the one my boat used to have.

Somehow, Mr. St. John drew comfort from the report that made me spend a few minutes in family and self protection mode. Here is the key message that he took from the 2017 version of NERC’s Long Term Reliability Assessment.

But Thursday’s report found that, despite the rising closures of coal and nuclear power plants, “new resources, which are primarily natural gas and renewable generation, should collectively provide the bulk power system with the same level of voltage support, frequency response and other essential reliability services as conventional generators.”

This assessment aligns with most other analyses on the effects that record-low natural gas prices, flat or declining electricity demand, and state mandates and incentives for renewable energy are having on the grid. While these and other factors are putting older coal and nuclear power plants under financial pressure, any resulting retirements aren’t expected to reduce key reliability measures.

That is not what the report tells me. In the front matter, it states that the conditions evaluated are essentially a best case scenario because it does not consider the possible impact of “[r]eliability impacts related to physical and cybersecurity risks.”

Even if someone were to skip over that important limitation statement, it should be difficult to misread the following recommendation directly related to the effect Sec. Perry is trying to accomplish by requesting – with a near term deadline – FERC to implement measures designed to slow or halt nuclear and coal plant early retirements.

Recognize time needed to maintain reliability: State, federal, and provincial regulators should continue to recognize lead times for generation, transmission, and natural gas infrastructure needed to maintain reliability as industry strives to meet policy goals and initives. Reliable operation of the BPS [bulk power system] requires dependable capacity with fuel assurance to address consumer needs, impacts of extreme weather conditions, and sudden disturbances on the system.
(Emphasis added.)

Mr. St. John also noted that nuclear and coal’s competitors have been virtually united in their opposition to measures that would prevent early retirements. That’s no surprise, but it is a characteristic of this particular discussion that should cause serious concern among the vast majority of people who are electricity buyers, not sellers.

Here is a slightly edited version of the comment that I added to the conversation at Greentech Media.

It’s a misunderstanding of reality to describe “nearly unanimous” opposition to the proposed Grid Resilience Pricing Rule from the “energy sector” with the dismissive exception of “coal and nuclear.”

If power plants or fuel sources had votes – which they don’t – each source’s vote would not be equal. A representative democracy in this situation would have to be more like the United Nations where each country has a say, but some nations have a much greater say than others.

If we add coal and nuclear together, they represent slightly more than 50% of the U.S. electricity production each year. Between them, they probably represent more than 50% of the difficult to measure “grid reliability services” that keep our electricity the ubiquitous tool that is the envy – and goal – of most developing nations.

For careful readers who understand risk communications and national level planning considerations, the NERC report contains clear statements about its limitations. It tells us that, barring physical events like gas pipeline explosions or unexplained cracks in key transmission pipes and barring cyber security type attacks, we do not necessarily NEED coal and nuclear plants to assure adequate capacity to deliver electricity.

That kind of qualified statement doesn’t provide much comfort to those of us who can remember numerous historical events. It doesn’t even reassure people who have no memory of distant history but who do pay attention to current events in the energy industry.

Right NOW, the European Union is facing the kind of natural gas delivery event that Sec Perry was obliquely referring to when he told people that grid resilience was a matter of national security. A few days ago, a hairline crack was discovered in a major oil and gas pipeline in the UK. Investigations and repairs will take an indeterminate period of time. Until complete, a major segment of the North Sea oil and gas supply cannot be delivered to the market.

A few days after that crack shut down a major supply to the UK, there was a fatal explosion in a gas distribution station in Austria that interrupted a substantial source of natural gas from Russia. That explosion virtually eliminated Italy’s Russian sourced gas supply.

People will still get most of the electricity that they need, but some might not get all that they want. There are no credible estimates of the prices that they will have to pay during the period where gas supplies are tighter than expected. Normal winter weather patterns MIGHT make the situation even worse.

Please, please understand that people who are responsible for taking appropriate actions to avoid situations like these here in the U.S. are generally reticent people who do not make inflammatory, dire predictions.

Just because they couch their reports in seemingly gentle statements that highlight the situational limitations of statements about reliability does not mean that they are comfortable with allowing even more reliable production to be replaced by generators whose capabilities are tenuously dependent on just-in-time fuel delivery systems or the weather.

Rod Adams
Publisher, Atomic Insights

The post NERC 10-year grid reliability report contains nuanced warnings that many fail to understand appeared first on Atomic Insights.

Photo Credit: Tennessee Valley Authority via Flickr

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