Rick Perry has given the Federal Energy Regulatory Commission (FERC) 60 days to take measures to ensure the US does not lose power generators that help keep the grid reliable and resilient, such as coal and nuclear power plants.
In a notice of proposed rulemaking (NOPR) on Thursday, the US Energy Secretary says the commission needs to develop new market rules to ensure that the reliability and resiliency attributes of power plants with on-site fuel supplies "are fully valued". Perry speaks of "fair compensation" to stop the "imminent loss" of power generation capacity with on-site fuel supplies, and of "severe consequences" for the grid coming from additional shut-downs.
The NOPR comes roughly a month after a study called by Rick Perry concluded that the main reason for coal and nuclear plant retirements in the US is the advantaged economics of natural gas-fired power generation. Low growth in electricity demand and the rise in use of variable renewable energy (VRE) resources have also helped make older, higher-cost power capacity redundant.
The study mentioned that a more reliable and resilient power system could be more costly.
Now with the NOPR, the Department of Energy (DOE) head seeks new instruments to support power generating units that offer "reliable capacity, resilient generation, frequency and voltage support" and have on-site fuel inventory. Eligible units must have a 90-day fuel supply on site to be prepared for supply disruptions, according to the notice. Currently, such a condition can be met mainly by coal and nuclear power plants.
The reforms envisaged by the NOPR will force regional transmission organisations (RTOs) and independent system operators (ISOs) to meet certain requirement for pricing "resiliency resource", among other measures. It, meanwhile, fails to recognise any contribution of distributed generation, such as wind and solar, battery storage and energy efficiency in achieving reliability and resiliency.
“We worry today’s proposal would upend competitive markets that save consumers billions of dollars a year. The best way to guarantee a resilient and reliable electric grid is through market-based compensation for performance, not guaranteed payments for some, based on a government-prescribed definition,” commented Amy Farrell, senior VP of Government and Public Affairs at the American Wind Energy Association (AWEA).
Choose your newsletter by Renewables Now. Join for free!
Author: Roland Peschetz. License: Creative Commons, Attribution 2.0 Generic
