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IEEFA Update: Modernization Is the Ticket to National Energy Security

May 14, 2018
David Schlissel

Most discussion around the possibility of the federal government invoking the Defense Production Act of 1950 in order to keep failing coal-fired and nuclear electricity plants alive has avoided exploring more sensible policy recommendations.

For months, the Trump administration has been floating various proposals aimed at propping up aging plants and their suppliers.

All of them are purely political machinations responding to market changes toward a system much less reliant on nuclear energy and coal-fired plants and increasingly driven by cheaper natural gas, wind and solar.

Administration officials want to protect the high-priced status quo. To that end, they have tried to roll back implementation of the Clean Power Plan even though it has already been widely adopted. They have implored the Federal Energy Regulatory Commission to subsidize coal plants, and now the administration is entertaining a bailout plea from FirstEnergy, a struggling Ohio utility company whose coal-and-nuclear business is badly outdated.

The fallacy at the heart of these proposals is that American power grids will collapse without federal protection of the coal and nuclear industries. This argument says national energy security is at risk because of the market-driven transition pushing the system toward other forms of fuel.

Nothing could be further from the truth.

If electricity-generation diversity and grid resiliency are the goals, as they should be, why not support policies that encourage more development of cheaper and cleaner solar and wind resources, alongside money-saving energy-efficiency programs?

THE FACT IS, COAL-FIRED POWER PLANTS ARE SUSCEPTIBLE to being forced off-line during periods of extreme weather because these plants are inherently vulnerable during such events.

On a single day during the “polar vortex” of January 2014, some 13,700 megawatts (MW) of coal-fired generating capacity on the 13-state grid operated by PJM Interconnect failed. On that same day, about 2,000 MW of coal-fired capacity within the territory served by MISO (the grid operator that provides electricity to customers in 15 states and part of Canada) were driven out of commission by cold temperatures.

Coal-fired plants, on average, are about twice as likely as other types of generators to fail.

And, during the flooding from Hurricane Harvey in Texas last year, two units at the W.A. Parish Generating Station near Houston switched to burning natural gas rather than coal— something the plant hadn’t done since 2009— because its outside coal pile had become saturated with rainwater.

PJM data shows that coal-fired plants, on average, are about twice as likely as other types of generators to fail either partially or totally when they are needed.

ANOTHER ASSERTION BY THE COAL INDUSTRY is that on-site coal supplies have to be beefed up in order to to ensure electricity delivery. Yet the vast majority of electricity outages are caused not by plant breakdowns but by transmission and distribution-system failures resulting from extreme weather.

Only an infinitesimal portion of outages are because of fuel-supply problems.

Policies to encourage more investment in modernizing the grid and discourage further strategizing over how to keep dying business models alive, are in the country’s best interest.

That’s the way to true national energy security.

David Schlissel is IEEFA’s director of resource planning analysis. This column first appeared in The Hill.



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David Schlissel

David Schlissel is IEEFA’s Director of Resource Planning Analysis. His work focuses primarily on the technical and economic viability of resources being used or being proposed for use in the electric power sector.

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