Report: Government Policies Bigger Threat To The Electrical Grid Than Terrorist Attacks

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Michael Bastasch DCNF Managing Editor
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What’s the biggest threat to the reliability of America’s electrical grid? It’s not terrorism, or solar flares. It’s actually federal and state government environmental policies, according to a new study.

Obama administration air and climate regulations, coupled with state policies to push green energy use are forcing 130 gigawatts of power to shut down in the coming years — enough to provide reliable power to 105 million Americans, says the free-market Institute for Energy Research.

“The single greatest emerging threat to reliable electricity in the U.S. does not come from natural disturbances or from human attacks,” writes Travis Fisher, an energy economist at IER.

“Rather, the host of bad policies now coming from the federal government—and, unfortunately, from many state governments —is creating far greater and more predictable problems with grid reliability,” Fisher warns.

In the past few years, the Environmental Protection Agency has implemented policies aimed at reducing carbon dioxide emissions, as well as a host of other traditional pollutants like mercury and smog. These rules, however, are causing hundreds of coal-fired generators to be prematurely retired.

Federal and state regulations are forcing nuclear power and natural gas plants to be decommissioned, only to be replaced with wind and solar energy — both of which are intermittent energy sources and can’t provide baseload power.

“Current policies are shuttering unprecedented amounts of reliable power sources while simultaneously forcing increasing amounts of intermittent, unreliable power onto the grid,” Fisher writes. “In total, we estimate that the policies highlighted in this report are responsible for closing or threatening the reliable operation of over 130 GW of reliable (dispatchable) generation from power plants that run on coal (103 GW), natural gas (19 GW), and nuclear power (8.6 GW).”

“This figure—over 130 GW of reliable power—should be treated as a lower bound because we simply cannot estimate the full impact of each policy on reliable generators,” Fisher adds. “And to put 130 GW in perspective, that’s enough power to supply Great Britain’s National Grid twice over.”

IER’s report comes as federal energy regulators questioned the EPA over the impacts its regulations will have on grid reliability. The EPA told the Federal Energy Regulatory Commission last week that its rule to limit carbon dioxide emissions won’t impact grid reliability.

“A lot of attention has been zeroing on the four building blocks, and why they pose challenges and why EPA didn’t get that quite right,” Janet McCabe, who heads up EPA’s clean air office, told FERC. “I think it’s important not to forget that there’s a range of other activities that states and utilities can engage in that will lead to reduced carbon.”

But grid regulators and utilities disagree, saying the short timetable the EPA is forcing on states to make carbon dioxide emission cuts poses problems for making sure the grid stays reliable.

“The EPA proposal does not appear to contemplate that the speed and intensity of these changes require dramatic infrastructure expansion, and likely will lead to significant changes in the way wholesale electricity markets function, therefore threatening electric reliability,” said Gerry Anderson, chairman and CEO of the utility DTE Energy.

Grid operators have also expressed concerns that the EPA’s rule to cut carbon dioxide will result in everything from blackouts to power overloads to huge rate hikes for consumers.

“The anticipated retirement of up to half of the existing coal capacity in the ERCOT region will pose challenges to reliable operation of the grid in replacing the dispatchable generation capacity and reliability services provided by these resources,” the Electric Reliability Council of Texas wrote in its analysis of the EPA’s rule.

“If the proposed Clean Power Plan remains as is, the bulk electric system will be at serious risk of violating these [voltage limits],” the Southwest Power Pool wrote to the EPA. SPP’s grid “will experience numerous thermal overloads and low voltage occurrences.”

IER urges federal and state policymakers to repeal rules that threaten the reliability of the grid, from EPA emissions controls to state policies mandating green energy use. IER says that policymakers “should weigh the purported benefits of these policies against their risks, which include bringing greater uncertainty to the power sector and increased chances of a major blackout.”

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