Rick Perry and his own grid study are saying very different things

Back in April, Energy Secretary Rick Perry announced that his agency would be conducting a review of power grid reliability. His comments at the time, as well as similar comments from EPA Administrator Scott Pruitt, led many observers — me included — to expect that the study would be agitprop, designed to justify keeping coal and nuclear power plants open.

Somewhat surprisingly, career staff at DOE got to work on the report and were, by all accounts, unimpeded. But those staffers were understandably nervous about what might happen to the report upon, ahem, political review, so in July, they leaked a mostly finished draft.

As analysis, it was thorough but not particularly remarkable. In particular, two of its central conclusions have been echoed in scores of similar reports:

• Coal and nuclear plants are retiring primarily because of cheap natural gas. Next to that, renewable energy subsidies and environmental regulations play a marginal role in their shutdowns.
• The retirement of these “baseload” plants has not impacted grid reliability. In fact, the power mix is more diverse than ever, and more reliable, too, “due to better planning, market discipline, and better operating rules and standards.”

What was somewhat remarkable is that those two conclusions flatly contradict what Perry and Pruitt have been saying about the “war on coal” and baseload power plants being necessary for reliability. Oops.

Now the report has officially been released.

It turns out, leaking the draft was a smart move on some staffer’s part. It makes a before-and-after comparison easy, so interference at the political level is simple to discern.

That forced transparency seems to have restrained the hand of political appointees at DOE friendly to coal and nuclear. To be sure, the report has been changed. Some baseload-friendly language has been added and the straightforward conclusion about reliability I quoted above is gone. A few coal-friendly policy recommendations were added. It’s definitely been massaged.

But the bones of the analysis remain the same and still indicate the same conclusion: There’s no reason in the world to keep coal plants open and only one reason to keep nuclear plants open — climate change, which the report never mentions.

(Shutterstock)

Underneath the political graffiti, the report exonerates renewables

Over at ThinkProgress, Joe Romm has a great rundown of some of the more notable changes between drafts. As he says, even those changes are a bit of a hack job, contradicted by other parts of the report.

For instance, the final report says “dispatch of VRE [variable renewable energy, i.e., wind and solar] has negatively impacted the economics of baseload plants.” And in his cover letter, Perry says “certain regulations and subsidies are having a large impact on the functioning of markets, and thereby challenging our power generation mix.”

“Certain regulations and subsidies.” Wink, wink.

But as Romm notes, deeper in the report it says: “the data do not show a widespread relationship between VRE penetration and baseload retirements.”

(DOE)

Similarly, the blunt assessment of grid reliability is gone, but later in the report it notes that bulk power system (BPS) reliability “is adequate today despite the retirement of 11 percent of the generating capacity available in 2002” and that “overall, at the end of 2016, the system had more dispatchable capacity capable of operating at high utilization rates than it did in 2002.” That means the grid has become more flexible and reliable, not less.

Also, those effects on wholesale markets Perry warns about? First, VRE makes bulk power cheaper. And second, it “performs a price stabilizing role.” So, lower and more stable prices — hardly seems like an emergency.

Policy recommendations, mostly banal

There are seven official policy recommendations in the report. Five of them are relatively banal, things that have been recommended by many, many similar reports — power market reforms to better value grid services, formalizing fuel-agnostic criteria to assess grid reliability, supporting R&D on advanced energy, and so on.

Of the two Trumpish recommendations, one — reminding DOE to focus on “energy dominance” — is utterly meaningless.

The other is that DOE accelerate and prioritize infrastructure development, which in itself is inoffensive, except the only instances of infrastructure mentioned are hydro, nuclear, and coal plants. That’s a rather pinched vision of electricity infrastructure in the 21st century.

Specifically, the report recommends that coal plants be allowed to upgrade without triggering New Source Review obligations, which would force them to meet modern pollution standards. That’s a dumb idea for a million reasons, but it would require congressional action, so it will never happen.

All told, in terms of policy recommendations, the report could have been much worse.

(DOE)

The report is a Rorschach test, soon forgotten

Perry and his staff took a perfectly solid report on the grid and added a (surprisingly light, to my eye) coating of political propaganda. The result is a muddy report, with findings in it to please (or enrage) every onlooker.

The coal lobby expressed pleasure that the report acknowledged the importance of coal plants. The nuclear lobby said the study “reaffirms our view that nuclear energy is a key and necessary contributor to a clean, reliable and resilient electric grid.” The energy storage lobby was pleased that the report “plainly states that advanced energy storage systems are critical to ensuring that electricity is reliable, affordable, and secure.” And so on.

Environmentalists, meanwhile, expressed the requisite outrage. Graham Richard of Advanced Energy Economy, a clean-energy business group, said, “this report seriously overstates the challenges associated with new energy resources.” Jim Marston of EDF said the report “is no surprise from an administration determined to prop up the coal industry at taxpayers’ expense.” Kim Smaczniak of EarthJustice said the report “is not worth the paper it’s printed on.” And so on.

Stephen Lacey and Julia Pyper of Greentech Media are right: The report is a Rorschach test. There’s something in it for everyone. That means everyone will issue their statements and reinforce their priors ... and then the report will be forgotten.

It has no legal force. It was only meant as advice and guidance to Perry and DOE. It mostly contains sensible recommendations that DOE, FERC, regional RTOs, and utilities have been working toward for a while. It does suggest, in various subtle ways, that Perry prioritize coal and nuclear plants, but he was almost certainly going to do that regardless. It’s what Trump has instructed.

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