December freeze further highlights the myth of fossil fuel reliability

March 9, 2023 (IEEFA)—An Arctic blast that hit the central and eastern United States in late December once again highlighted that coal- and gas-fired electric generators are not nearly as reliable as their proponents claim. A report by the Institute for Energy Economics and Financial Analysis (IEEFA) shows how forced outages during extreme weather underscore performance problems in the fossil fuel sector.

During Dec. 23-24, more than 100,000 megawatts (MW) of coal-and gas-fired generation were offline due to Winter Storm Elliot, highlighting serious performance problems for fossil fuel generators. The outages stressed the entire Eastern Interconnection of the U.S. electricity system and prompted first-of-a-kind rolling blackouts in two cases by the Tennessee Valley Authority (TVA) and Duke Energy.

“The problems encountered across the central and eastern U.S. during Winter Storm Elliott show that it is time for a more honest discussion about the reliability of the electric power sector’s thermal generation resources,” said Dennis Wamsted, IEEFA energy analyst and author of the report, Fossil Fuels Fail Reliability Test. “Coal- and gas-fired resources’ performance in December shows how unreliable they can be exactly when they are needed most. The increasingly troublesome record of performance needs to be accounted for in utility and transmission system planning efforts.”

The report examines problems that surfaced during the freeze in five hard-hit areas: The Electric Reliability Council of Texas (ERCOT), the operator of the grid supplying 90 percent of the electricity in Texas; the Midcontinent Independent System Operator (MISO) which serves 15 states as well as the Canadian province of Manitoba; PJM, which supplies power from New Jersey to Illinois; TVA, which serves 10 million people in its seven-state territory; and Duke Energy’s North Carolina service territory, served by Duke Energy Carolinas and Duke Energy Progress.

The increasingly troublesome record of performance needs to be accounted for in utility and transmission system planning efforts.

The report recommends:

• A joint effort by industry and FERC to address performance issues in the natural gas supply sector.
• Better integration of battery storage in utility and regional resource planning efforts. Storage is a cost-effective means of bridging early morning winter peaks until solar resources kick in, as well as an option for flattening late afternoon peaks in the summer months.
• Ensuring that existing market structures, particularly in PJM, do not provide incentives for poor-performing fossil resources to remain operational and collect capacity payments, even at the risk of occasionally being hit with a penalty for failing to provide power when needed.
• Development of better capacity accreditation methods for fossil fuels, which traditionally have been considered as always-available resources. Factoring in past performance during extreme events (the 2014 polar vortex and the 2022 December freeze) would provide operators with a more realistic assessment of potentially available capacity.

Clearly, it is time for a different conversation regarding fossil fuel generation’s reliability, particularly in cold weather.