June 20 (Renewables Now) - The greater volumes of natural gas and renewable power generation in the US are contributing to a more diverse power system and supporting continued reliable operations, says an expert report by Analysis Group.
In April Energy Secretary Rick Perry called a study into critical issues for the long-term reliability of the electric grid, including an analysis of "market-distorting effects of federal subsidies that boost one form of energy at the expense of others".
The Analysis Group’s report says that there is no evidence supporting the notion that the declining financial viability of certain conventional power plant technologies, like coal and nuclear power plants, that operate as merchant units is putting the electric system’s reliability at risk. The evidence also does not support the view that federal and state policies in support of renewable energy are the primary cause of the reduced viability of conventional power technologies.
The study says old conventional power plant technologies are facing an uncertain future mainly due to fundamental market forces, which should not come as a surprise. Flat power demand, low natural gas prices, and the addition of highly efficient gas-fired power generation capacity is hurting the profitability of older, merchant generating assets in some parts of the country.
“The retirement of aging resources is a natural element of efficient and competitive market forces, and where markets are performing well, these retirements mainly represent the efficient exit of uncompetitive assets, and will lead to lower electricity prices for consumers over time,” the study says.
At the same time, the addition of more efficient natural gas and renewable energy technologies is resulting in more diverse power systems in this country. Analysis Group explains that newer generating resources are also contributing to the varied reliability services, such as frequency and voltage management, ramping and load-following capabilities, provision of contingency and replacement reserves, black start capability, and sufficient electricity output to meet demand at all times -- that grids require.
The full report is available at awea.files.cms-plus.com/AG%20Markets%20Reliability%20Final%20June%202017.pdf.