A report from the Trump Administration indicates electricity markets will continue to experience increased use of natural gas and renewable energy resources, lower demand for energy, and more consumer choices—challenges that are evolving into less reliance on baseload coal and nuclear generation.
Electric cooperatives believe fuel diversity is critical and are finding innovative ways to serve their members with affordable and reliable power in a changing energy environment, noted NRECA, which is reviewing the 187-page report by the Department of Energy.
“This is a well-researched, comprehensive report,” said Pam Silberstein, NRECA senior director, power supply. “While there doesn’t appear to be anything shockingly new here, we’re pleased that the report zeroes in on some of the challenges in the wholesale markets that our members have had struggles with.
“The key will be: What’s next? Will DOE or FERC act on any of these findings, and if so, how? We’ll be watching for that.”
The report found “advantaged economics” of natural gas generation as the biggest contributor to early coal and nuclear plant retirements. The department also cited state and federal regulatory compliance costs and deadlines as another contributor to plant retirements.
An increase in variable renewable energy and low growth in electricity demand also pressure wholesale electricity markets, the report said.
DOE further concluded that while electricity markets recognize and compensate reliability, more work is needed to address grid resilience and that may come at an increased cost.
Yet the report noted that the grid and power markets have historically proven to be flexible, strong and adaptable.
The department also included a list of recommendations beginning with a call to the Federal Energy Regulatory Commission to quickly work with states, regional transmission organizations and others to improve energy price formation in wholesale electricity markets.
DOE also should focus R&D efforts to enhance utility, grid operator, and consumer efforts to improve system reliability and resilience, according to the report.
The report stems from Energy Secretary Rick Perry’s request that DOE staff issue a report assessing the reliability and resilience of the electric and how electricity markets are changing.
Cathy Cash is a staff writer at NRECA.