EPA chief Pruitt: Coal plants necessary to ensure grid reliability

Dive Brief:

The head of the U.S. Environmental Protection Agency said coal-fired power plants are key to preserving electricity reliability in an appearance on the Fox Business network this week.
EPA Administrator Scott Pruitt said utilities need to be able to store "solid hydrocarbons onsite" to call on during times of peak demand and raised concerns about the vulnerability of a power system that relies too heavily on natural gas.
Pruitt's comments come as the Department of Energy conducts a 60-day review of the nation's baseload power generation to assess whether incentives for renewable energy are undermining power reliability. The Federal Energy Regulatory Commission also concluded a technical conference this week on state power subsidies and their effects on wholesale market operations.

Dive Insight:

A review of baseload power ordered by President Trump is ongoing, but Pruitt's comments hit on a familiar theme of national security, which could give an indication on how the administration is approaching the question.

Appearing on "Varney & Co.," Pruitt said that coal could be "a safeguard to preserve the grid" in the event of an attack on power infrastructure.

“Utility companies across this country need fuel diversity. You need solid hydrocarbons on-site that you can store, so when peak demand rises, you’ve got solid hydrocarbons to draw on,” Pruitt said Wednesday. "What would happen if we had an attack on our infrastructure when you’ve diverted to natural gas almost exclusively and you don’t have coal there as a safeguard to preserve the grid?"

Several energy industry observers say the Trump has a "credibility problem" when it comes to the baseload study's findings: He spent months on the campaign trail promising to bring back coal jobs and criticising renewables, so the study's recommendations will be closely scrutinized.

A parallel review of wholesale market operations by FERC is expected to be more independent. Earlier this week, power stakeholders told the commission that renewable energy mandates and nuclear subsidies in eastern power markets could undermine incentives to build new generation, potentially threatening power reliability.

Discussions at the conference focused largely on how to integrate those state policies into wholesale market operations. Because many of the mandates and subsidies are driven by state climate goals, a strong consensus emerged among conference attendees of the need to price greenhouse gas emissions in power markets.

FERC, however, cannot make any major decisions on market operations without the appointment of at least one commissioner. In the meantime, the Trump administration has hinted it may seek to pre-empt those state climate goals.

Speaking about DOE baseload review last week, Secretary of Energy Rick Perry said that the federal government may seek to "intervene on the regulatory side" if it feels state power policies are threatening national security.

"Being able to have and make sure we’re able to maintain a baseload on our grid is of national security," he told a power conference in New York.