FERC: No multi-billion dollar bailout for coal and nuclear generating facilities

Excerpts from statements by Richard Glick, FERC commissioner are given below. The Microgrid Knowledge (“MGK”) news article summarizes the context by writing:

The commission rejected the energy secretary’s assertion that retirement of coal and nuclear plants threatens electric resilience. Instead FERC plans to look at broader challenges that may influence the reliable flow of energy in competitive wholesale markets, among them severe weather, physical and cyber attacks, accidents and fuel supply disruptions … In rejecting the coal and nuclear subsidies, FERC doubled down on its commitment to competitive markets. Commissioner Cheryl LaFleur called the proposed tariff for coal and nuclear “far-reaching out-of-market approach” that would be “highly damaging to the ability of the market to meet customer needs.”

FERC opened a new Docket No. AD18-7-000, in their response.

Richard Glick:

I also believe that it is important to consider the advantages that newer technologies, such as distributed energy resources, energy storage, and microgrids, may offer in addressing resilience challenges to the bulk power system.

MGK continues:

He added that most power outages occur because of failures within the transmission and distribution system, and not because of a lack of power supply.

Mr Glick:

There is no evidence in the record to suggest that temporarily delaying the retirement of uncompetitive coal and nuclear generators would meaningfully improve the resilience of the grid. Rather, the record demonstrates that, if a threat to grid resilience exists, the threat lies mostly with the transmission and distribution systems, where virtually all significant disruptions occur. It is, after all, those systems that have faced the most significant challenges during extreme weather events.

(I have added emphasis here.)

FERC Commissioner Cheryl LaFleur also responded:

In effect, it sought to freeze yesterday’s resources in place indefinitely, rather than adapting resilience to the resources that the market is selecting today or toward which it is trending in the future.

Using the context provided by the MGK article, again:

Instead, FERC should guide grid operators to pursue resiliency within a system “that is likely to be cleaner, more dynamic, in some instances more distributed, and deployed by an efficient market for the benefit of customers,” LaFleur said.

Then, from and regarding FERC Commissioner Neil Chatterjee:

Commissioner Neil Chatterjee also voted to reject Perry’s proposal and open the new docket — but with some reservations.

Chatterje expressed concern about the “staggering” change the grid is undergoing, noting that between 2014 and 2015 alone, the U.S. added about 15,800 MW of natural gas, 13,000 MW of wind, 6,200 MW of utility scale solar photovoltaic, and 3,600 MW of distributed solar. Meanwhile, nearly 42,000 MW of synchronous generating capacity (coal, nuclear, and natural gas) retired between 2011 and 2014. An additional seven nuclear units, representing 10,500 MW, are set to retire by 2025.

A separate article, from Utility Dive, reports how new natural gas, not renewables, is the culprit in beating down demand for nuclear generation. This is based on a recent MIT study. A previous study, by government Department of Energy Argonne National Laboratory and Lawrence Berkeley National Laboratory, arrived at the same conclusion.

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