Energy Secretary Rick Perry’s long-awaited grid study is finally out. But while Trump officials clearly tried to rewrite the previously leaked staff draft to give the impression that renewable energy sources are a threat to baseload power and grid resilience, they mostly botched the job.
Back in April, Perry ordered a study to back up his claims that solar and wind power were undermining the U.S. electric grid’s reliability and forcing the premature retirement of baseload nuclear and coal plants. In July, Bloomberg obtained the draft report, written by Department of Energy staff, and revealed that they found essentially the opposite, as we reported.
As far as retirement of baseload plants, the draft report report found that factors like environmental regulations and renewable energy subsidies “played minor roles compared to the long-standing drop in electricity demand relative to previous expectation and years of low electric prices driven by high natural gas availability.”
A second bombshell conclusion in the draft report was that “the power system is more reliable today due to better planning, market discipline, and better operating rules and standards.”
Both of those bombshells are nowhere to be found in the final version released late Wednesday. So what caused the baseload retirements? The final report concedes that “the biggest contributor… has been the advantaged economics of natural gas-fired generation,” and that “another factor… is low growth in electricity demand.”
But in place of the finding that subsidies for variable renewable energy (VRE) — basically wind and solar — had a minor role in shutting down baseload plants, is the conclusion that “dispatch of VRE has negatively impacted the economics of baseload plants.” And on a related note, the final version of the report states that “participants on a panel of economists at a May 2017 FERC technical conference cited state-level RPS and Federal tax credits for VRE as examples of wholesale market impacts and distortions.”
But buried deeper in the 187-page report is a finding that completely contradicts the stated conclusion of the rewritten report: “To date, however, the data do not show a widespread relationship between VRE penetration and baseload retirements, as shown in Figure 3.28.”
Figure 3.28 clearly shows that coal and nuclear retirements (brown dots) have no correlation with variable renewable energy penetration.
Nonetheless, in his letter accompanying the report, Perry asserts that “It is apparent that in today’s competitive markets certain regulations and subsidies are having a large impact on the functioning of markets, and thereby challenging our power generation mix.”
Not only were renewables not a major factor in coal and nuclear retirements, but the final DOE study also concludes that the grid is more reliable than ever. It’s just not as blunt about it as the draft was.
You have to read to page 63 to find this about the crucial metric of Bulk Power System (BPS) reliability:
BPS reliability is adequate today despite the retirement of 11 percent of the generating capacity available in 2002, as significant additions from natural gas, wind, and solar have come online since then. Overall, at the end of 2016, the system had more dispatchable capacity capable of operating at high utilization rates than it did in 2002.
So, after integrating all of that wind and solar while shutting down all that baseload power (mostly coal), the grid actually has more flexibility than it did a decade and a half ago.
But Perry mentions nothing about that in his letter, and the political team who wrote the findings can’t bring themselves to say any more than “to date, wholesale markets have withstood a number of stresses.” But then they quickly seek to raise doubts about the future, warning that “market designs may be inadequate given potential future challenges. VRE—with near-zero marginal costs and if at high penetrations—will lower wholesale energy prices independent of effects of the current low natural gas prices.”
Pretty scary, unless you stop to realize that if the Trump administration wasn’t committed to diminishing renewable energy sources and boosting coal at every opportunity, they would actually be bragging about lower wholesale energy prices in the future.
And again, buried on page 123 of the report is that statement: “Increasingly, VRE also performs a price stabilizing role—wind, solar PV, hydropower, and geothermal generation offer near zero-marginal-cost electricity. To the degree that VRE and nuclear can stabilize the short run cost of bulk power, those resources could also improve the month-to-month manageability of customer bills.”
In other words, renewable energy helps stabilize prices and make Americans’ electricity bills more manageable. And, as we’ve learned from this study, renewables weren’t a major player in the shutdown of baseload coal and nuclear, and the grid is more reliable than ever.
Seems like the Perry report proves we need more renewables.