The Pittsburgh Tribune-Review interviewed David Holt, president of Consumer Energy Alliance, for a story detailing what problems might await electrical power grids in the coming years, and how delaying action now could lead to long-term troubles in the future.
If the electrical grid that powers the United States encounters a supply problem, the easiest solution takes five years.
That’s the minimum time it takes to build a large, natural gas-fired generation station, from siting to lining up investors, permitting and constructing.
“If you wait until you have a power problem, you’ve got a five-year problem,” said Bill Pentak, a vice president at Dallas-based Panda Power Funds.
The company is building seven gas-fired plants, including the Liberty and Patriot projects in the Marcellus shale fields of Bradford and Lycoming counties, because it believes the ever-increasing amount of gas from shale will become the grid’s backbone.
Not everyone agrees.
“Natural gas cannot replace nuclear, it cannot replace coal,” U.S. Rep. Tim Murphy, R-Upper St. Clair, said during a Department of Energy hearing in Pittsburgh.
Some leaders and observers worry that a spike in demand, accelerated retirements of coal-fired plants pinched by new carbon rules, and the shuttering of more nuclear reactors could lead to grid failures and expensive utility bills in the next five to 10 years.
“There is a coming storm as demand keeps going up,” said David Holt, president of the Houston-based Consumer Energy Alliance, which advocates for energy users.
Some of the disagreement about what should power the grid comes from economic and regulatory uncertainties. Experts assume more coal plants will close — and almost none will be built — because of Environmental Protection Agency emissions rules such as those opening to public comment this week in Pittsburgh.
Low natural gas prices are muscling more expensive coal plants out of contention when regional grid operators select long-term capacity providers, observers say.
But it’s unclear when or how carbon rules will affect cleaner-burning coal plants. The National Association of Manufacturers, the U.S. Chamber of Commerce and other groups said last week they would challenge the rules.
“They’re throwing it back to the states without funding,” Holt said. “It’s a poorly conceived plan that will create more confusion.”
The EPA said electric rates will increase, and it assumes that demand for electricity will drop because of energy efficiency. Others say demand will increase as the economy improves.
The Energy Information Administration predicts natural gas will fuel nearly three-quarters of capacity added to the grid during the next 25 years and eventually overtake coal as the dominant source, with increased support from renewables such as solar and wind.
“We think natural gas is the only thing that’s left for people to rely on,” Pentak said.
That concerns observers who worry about too much reliance on one volatile source.
“We can expect more blackouts and brownouts and much higher prices,” Murphy said.
POLAR VORTEX
Murphy, chairman of oversight and investigations for the House Energy and Commerce Committee, joined others at the energy hearing last week raising concerns about a chronic lack of pipelines and other infrastructure required to deliver gas from shale fields to metro areas.
In addition to the five years required to build a plant, pipeline builders such as the Williams Cos. report taking seven years to navigate a regulatory morass to connect the gas.
“Was seven years really in the best general interest of the public?” said Rory Miller, a senior vice president at the Tulsa-based Williams, describing the time it took to get approvals for its Rockaway pipeline project in New York.
The polar vortex that brought harsh weather in January and February highlighted pipeline shortcomings when utilities couldn’t get enough gas to the Northeast.
Energy Secretary Ernest Moniz said it showed what low supply diversity can do, when more than half of generators in New England rely on a fuel that suddenly wasn’t available.
“Another polar vortex could cause issues,” Moniz told the Tribune-Review.
NOT THERE YET
“A lot of challenges” await the grid, including the integration of renewable energy sources such as wind and solar, Moniz said. The Energy Information Administration predicts a big increase in that sector, but its low efficiency means it can’t be a baseload provider.
“Wind and solar aren’t there yet,” Holt said.
Baseload power refers to the amount of electricity that utility or distribution company customers require each day to meet minimum demands.
Liberty and Patriot, the gas-fired plants Panda Power Funds is building in Pennsylvania, each will have capacity to produce 829 megawatts of electricity from plants covering 34 and 85 acres, respectively. Compare that to the company’s 20-megawatt solar array on 134 acres in Pilesgrove, N.J., or the proposed $1 billion, 1,600-acre Crescent Dunes solar project in Nevada that will have a capacity of 110 megawatts.
“We would need 5,000 acres of solar panels to do what we’re going to do on 34 acres,” Pentak said.
Nuclear power offers base-load potential with little greenhouse effect impact, advocates note. But concern about nuclear waste and disasters such as the Fukushima meltdown in Japan make it politically unpopular.
“There’s a misunderstanding among consumers about the economics of the nuclear fleet, not to mention its reliability,” said former U.S. Sen. Blanche Lincoln of Arkansas, part of the leadership team at Nuclear Matters, a Washington group seeking to maintain that fleet of about 100 reactors.
The Energy Information Administration says two reactors will retire by 2019 and predicts more will follow. The World Nuclear Association expects six reactors to come online by 2020.
If more are decommissioned, construction of replacements would take at least 10 years, Holt said.
PROTECTING THE GRID
That leaves coal as the most reliable source, Murphy and others say. He said the United States should invest more money in finding ways to burn it more efficiently to meet emissions standards.
The Energy Information Administration predicts reliance on coal to produce electricity will decrease about 16 percent by 2020, but it will remain the dominant fuel until at least 2034.
During that downturn, regional grid operators such as PJM Interconnection in Valley Forge can maintain reliability by requiring generators to give a 90-day notice before retiring a power plant on the grid. It can ask a generator to remain in business longer if a study determines the retirement will harm the grid, said PJM spokesman Ray Dotter.
PJM contracts with generators three years in advance to provide capacity. If one of those generators decides to shut down before that contract expires, “they’re on the hook to either supply it or provide a replacement.”
