Dive Brief:

• The nation’s ability respond to extreme weather events could be at risk if the pace of fossil fuel plant retirements continues, warns a report released Tuesday by the Department of Energy’s National Energy Technology Laboratory (NETL).

• The report examines the responses to the Bomb Cyclone that blanketed much of the eastern United States with below normal cold weather from Dec. 27 through Jan. 8.

• To maintain reliability and resilience, the loss of coal and nuclear generation will have to be replaced with other forms of “reliable and resilient generation” and associated infrastructure, for example, natural gas pipelines and transmission lines, the report says.

Dive Insight:

In a January meeting before the Senate Committee on Energy and Natural Resources, Federal Energy Regulatory Commission Chairman Kevin McIntyre said the agency was still receiving and reviewing data, but “overall the bulk power system performed relatively well” during the Bomb Cyclone.

A new report from the DOE’s NETL, however, concludes that fossil fuel generation, particularly coal-fired generation, was essential to reliability during the Bomb Cyclone this winter and that further retirements could pose a threat to the reliable operation of the grid.

It is not the first time the DOE has weighed in on the need for coal plants to ensure resilience and reliability. Last fall, Secretary of Energy Rick Perry directed FERC to open a notice of prosed rulemaking (NOPR) on ways to provide “full recovery of costs” for power plants that keep 90 days of fuel supplied onsite.

In January, FERC dismissed the NOPR and instead opened a docket that seeks input from regional grid operators on how best to enhance the resilience of the power system.

After the 2014 Polar Vortex, the PJM Interconnection implemented changes to its rules designed to enhance reliability in the RTO’s footprint. PJM introduced a capacity performance product that provides value to generators for having secure or onsite fuel supplies.

In its analysis of grid performance in PJM during the Bomb Cyclone, NETL concluded “it was primarily coal that responded resiliently, with some contribution from oil-firing units.”

The report then attempts to come up with a “resilience value” for coal and oil’s contributions during the Bomb Cyclone.

The authors derived that value by measuring the increased cost of energy over the two week course of the Bomb Cyclone to come up with $288 million per day, or $98/MW, and comparing it with costs from the preceding two week period, which were $225 million per day, or $73/MW. According to the report, “this, in effect, represents a value of resilience, which, during the [Bomb Cyclone] rose to $3.5 billion” cumulatively over the two weeks of the weather event.

In the future, with more coal plant retirements expected, the authors say that value could be higher. "Further study is needed to quantify this impact,” they conclude.

The NETL stops short of presenting policy recommendations, but the new report is the first of several planned by the DOE’s Office of Fossil Energy. The report says that in future volumes, NETL anticipates doing a “deeper analysis” that includes unit-level data that could enable “rigorous identification of at-risk baseload plants” and a look at the need for “advanced technology to meet reliability and resilience in both near and long-term time horizons.”

Several experts contacted by Utility Dive for comment on the report did not respond by press time. But Michael Wara, senior research scholar at the Stanford Woods Institute for the Environment, told Utility Dive, “The data in the report raises some important issues, but the way it was framed was not neutral; it wasn’t appropriately contextualized.” 

The report draws attention to some things that need to be fixed, such as expanding the natural gas pipeline network, but that is an argument for building more infrastructure, he said, not for subsidizing any single resource, such as coal-fired generation or nuclear power.

“The bigger picture,” said Wara, is the report is a “brick in the evidentiary wall, if [administration officials] are going to want to subsidize coal, but it is not a well-constructed brick.” It is also concerning, he said, that “it appears to be a national lab being used for potential political ends.”

DOE did not respond to a request for comment by press time.