Carbon policy throwing US grid reliability into question

Carbon reduction policies in the US raise serious concerns about the continued reliability of the country's power grid as a price on carbon would reduce coal-fired generation and more renewable energy resources strain transmission systems, according to a report issued by the North American Electric Reliability Corp. (NERC).
"We are concerned that, when viewed from a continent-wide perspective, current climate initiatives do not adequately address key reliability objectives, particularly the need for a strong and robust transmission system," NERC President Rick Sergel said. "As we consider our energy future, it becomes increasingly clear that our success in reducing carbon emissions and realizing energy independence hinges on our ability to provide reliable, clean, electricity where and when it is needed," Sergel said.

The NERC report comes as 23 states are moving on regional carbon trading plans, 27 states have renewable energy standards, and a new US president was elected who supports a national carbon cap-and-trade plan along with powerful members of Congress.
After reviewing comments on the climate and reliability issue received last summer from approximately 50 utilities, generators and others around the US, NERC said a key concern for many was the fuel-switching that would occur from coal-fired generation to natural gas-fired generation to avoid heavier carbon compliance costs.

NERC said that in the past year, it has seen a 20,000 MW increase in planned gas-fired generation over the 2008-2016 period, making gas the default "fuel-of-choice" in a carbon-constrained world and the industry highly dependent on the fuel.
"Retirements of coal-fired plants over a short timeline could result in the loss of generation needed to support the integrity of the bulk power system and thus, severely impact reliability across the continent, especially in those regions heavily dependent on the fuel," NERC said. "Looking ahead to a potential cap-and-trade environment, managing carbon credits and allowances to permit critical coal (and gas) facilities to run will be essential to maintaining reliability."

NERC also noted that the bulk transmission system is not currently equipped to deliver renewable energy, with renewable generation facilities often sited in remote areas, to populous load centres, making it all the more critical to resolve this issue as solar, wind and other green resources are brought online to reduce carbon footprints.
"The ability to reduce the carbon emissions of the electric sector hinges on having a robust transmission system," the report said. "Ensuring a suitable transmission system will require a two-pronged approach: building new infrastructure and changing current planning mechanisms to focus more heavily on interregional and continent-wide planning and operation."

As a way to mitigate two issues, NERC said that demand-side resources need to be regarded as a key element in any resource plan to reduce the need for new generation and power lines.
"Renewed focus on demand response and energy efficiency is one of the most compelling reliability benefits of climate change initiatives when developed as part of a broader resource portfolio," the report said.

NERC advocated for a national climate change policy as a way to provide clarity to utilities, generators and others in the power sector to steer investment in new transmission lines and power plants.
Currently, the "patchwork" design of state action on renewable energy and climate change is proving problematic for many, it said.