Transition to Flexible Grid Driven by Competition, Renewables Associations Tell Perry

Four major U.S. renewable energy associations are firing back at Energy Secretary Rick Perry’s study of the role of renewables in a modern electricity grid, arguing that “diverse, flexible resources are key to reducing costs and enhancing reliability in today’s electric power system.”

In response to Perry’s April 14 memo announcing the review, the Advanced Energy Economy (AEE) Institute, the American Council On Renewable Energy, the American Wind Energy Association, and the Solar Energy Industries Association are challenging the government’s contention that renewable generation is forcing the retirement of coal and nuclear capacity, or that changes in the grid threaten its reliability.

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On the contrary, “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,” they note in their cover letter.

The white paper acknowledges that “despite the real-world examples of greater fuel diversity improving reliability, there are concerns that a shift away from coal and nuclear, so-called ‘baseload’ resources, and toward more flexible natural gas, demand-side resources, and renewable energy threatens to undermine reliability.” But “these concerns fail to recognize the ways that new technologies and services are helping us keep the lights on every moment of every day.”

The four organizations argue that the transition now sweeping the U.S. utility sector is being driven principally by low natural gas prices, adding that “the grid can continue to reliably integrate much higher levels of natural gas, variable renewables, and demand-side resources,” using techniques and technologies that are already in widespread use.

In fact, when the Polar Vortex hit the U.S. Northeast in 2014, “extreme cold caused onsite coal piles to freeze, power plant control equipment to fail, and natural gas pipelines to become constrained. But grid operators were able to turn to demand-side resources and wind energy to keep the lights on during the emergency.”

The paper stresses that the grid transition has been driven by competition, not subsidies, and that the future belongs to low-cost, flexible resources that more and more grid operators say they value.

“Economic forces are causing the resource mix used to meet our electricity needs to shift from capital-intensive, centralized baseload resources that operate full-time to flexible resources that are currently lower cost, and likely to remain so,” the paper states. “Reducing reliance on baseload resources does not mean that the grid is compromising reliability. As the grid changes, system planners and policy-makers increasingly turn to flexible resources like natural gas generation, demand-side management, smart grid, and now storage, to maintain reliability.”

The paper adds that grid operators can “use variable resources like wind and solar effectively by forecasting weather conditions, with increasing sophistication and accuracy, but can also respond to unpredicted changes by calling on fast-starting natural gas generators, demand response, and energy storage to make sure demand is met.”

In the cover letter, the four organizations bend over backwards to find common ground with Perry, but still pointed to the secrecy surrounding the review.

“It is in the spirit of common purpose that we express our disappointment that the Department has apparently chosen not to make this review—which as outlined in your memo has the potential to upend energy markets around the country—public and open to input from industry, grid operators, state regulators, and other key stakeholders,” they write. “Though the Department of Energy has not to date solicited public comment, we believe this topic is too important for DOE to be deprived of the expertise and insights of those in the industries we represent.”