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The Energy Department Is Making Up Reasons Why You Need To Pay More For Dirty Energy

A new proposal from the Trump administration would require regional electric grids to keep coal plants running–even if they’re too expensive–because they’re needed to keep the power on during natural disasters. The only problem is that’s not the case.

The Energy Department Is Making Up Reasons Why You Need To Pay More For Dirty Energy
“They’re trying to bail out coal, and they’re coming up with any possible rationale, even in the face of evidence that it makes no sense as a justification.” [Photo: rozpedowski/iStock]

In the wake of disasters like Hurricane Harvey and Irma, a new proposal from the Department of Energy argues that a resilient electricity grid needs traditional power sources like coal to keep lights on in disasters–and so consumers should pay more to keep coal plants running, even as they are put out of business by the economic realities of cheaper energy sources. The problem: What the government is arguing isn’t true.

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“It’s really a pretext. They’re trying to bail out coal, and they’re coming up with any possible rationale, even in the face of evidence that it makes no sense as a justification–including their own report, which does not support their action,” Miles Farmer, a clean energy attorney at the nonprofit environmental advocacy group Natural Resources Defense Council, tells Fast Company.

In the proposal, Energy Secretary Rick Perry asks the Federal Energy Regulatory Commission (FERC) to adopt new regulations to support so-called “baseload” plants–as coal and nuclear plants were traditionally called because they provided a base of consistent power, no matter the circumstances–and keep them open as they struggle to compete in energy markets. These “fuel-secure” plants would get financial support to ensure that they would always have a 90-day supply of fuel on hand. As coal becomes more and more expensive compared to other fuels, this is a costly proposition, and that cost will get passed down to the consumer.

Regional operators of electric grids would have to pay a special rate to keep the plants open, rather than choosing the cheapest electricity source available on the market. In other words, it’s essentially a subsidy, though unlike the clean energy subsidies that Republicans have loudly criticized in the past, it would come directly from consumers paying higher electric bills rather than from the government.

“What we’re seeing now [is that] wind and solar can also serve basic baseload needs.” [Photo: pixel1962/iStock]
The real problem is that in a disaster, despite the government claims, the existence of coal and nuclear plants doesn’t guarantee that power will stay on. In Texas, where Perry previously served as governor, multiple coal and gas-powered plants broke down during cold weather in 2011, causing blackouts despite the fact that they had fuel on hand. During the extreme cold of 2014’s polar vortex, which affected the Northeast and Upper Midwest, some coal plants couldn’t operate, but wind helped keep the electricity on and prices low. During Hurricane Harvey, though some nuclear plants stayed on, a coal plant in Texas couldn’t use coal because it was so wet. Prior to Hurricane Irma, nuclear power plants were taken offline (wind power, again, helped provide power in Florida, even as winds topped 100 miles an hour).

While renewable power isn’t immune to disasters, it avoids the need to have fuel on hand. Because multiple rooftops can have solar power, rather than just generating power at isolated plants, it can also avoid some problems with distribution–the process of getting power from plants to consumers–which is more likely to be interrupted if power comes from fewer sources. In Florida, some homeowners with battery storage were able to keep power on even when their neighbors didn’t. Distribution problems, whether caused by storms or squirrels chewing power lines, are an even more common reason for blackouts than issues with supply. A massive blackout in 2003, affecting 50 million people, was caused by a fallen tree branch. But the DOE proposal doesn’t discuss at all how to make distribution more resilient.

The concept of coal-powered “baseload” plants is also outdated, experts say. In the past, grid operators saw coal as the cheapest option, and because coal plants can’t easily be turned on and off, they generally ran all the time, providing a base of power. When demand spiked–on a hot summer day, for example, when everyone who had an air conditioner turned it on–grid operators would temporarily turn on extra “peaker” plants. Coal power companies argued that without the steady supply of their power, grids couldn’t operate reliably, pointing to the fact that wind and solar power aren’t steady sources.

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But the grid already runs differently now, using a more diverse mix of sources. The cheap price of natural gas, along with the falling price of solar and wind and a general decline in demand for electricity, has meant that coal is no longer the cheapest option. As the economics changed, the coal industry started to collapse. Between 2002 and 2016, 531 coal power units retired, and more will retire by 2020. Five nuclear reactors have retired in the past five years. In the meantime, the cost of solar power dropped 58% globally in the past five years, and continues to steeply fall. The cost of wind power is falling. The cost of battery storage is falling. In some locations, both wind and solar power are already cheaper than coal.

“What we’re seeing now [is that] wind and solar can also serve basic baseload needs,” says Farmer. Solar and wind are more flexible, so they can easily respond to shifts in electricity demand. If electricity supply overtakes demand, for example, solar farms can quickly shut off, unlike coal plants. Smart appliances are beginning to help control demand. Batteries can store power when the sun doesn’t shine.

“Nobody is suggesting that we turn off coal and nuclear power plants all at once, tomorrow,” says Mark Dyson, the principle of Rocky Mountain Institute’s Electricity Innovation Lab. “But there is nothing special about those resources, either. Grids can operate reliably without so-called ‘baseload’ plants by combining a diverse portfolio of other resources together such that at all times, customers’ needs for energy are met reliably. European utilities have done this routinely for years, with a declining share of ‘baseload’ and a commensurate increase in renewable supply. California’s grid is transitioning rapidly to a highly-renewable future, with no in-state coal and, soon, no nuclear power plants powering the world’s sixth-largest economy. New, low-cost battery storage technology would be helpful, but is not required to enable this transition.”

In a recent report, the Department of Energy found that the grid doesn’t face reliability problems in its current system, which is driven by market forces. “There is, if anything, excess supply of resources,” Farmer says.

All of this means that propping up a dying coal industry–one of the largest sources of greenhouse gas emissions and air pollution that causes asthma and other health problems (and propping up nuclear power, which poses its own Fukushima-style risks)–isn’t necessary. For practical reasons, Perry may be unlikely to succeed anyway. He has asked FERC to adopt the proposal within 60 days, an unusually short time frame.

“The chances that what DOE has written are adopted as-is are virtually zero,” says Farmer, who says that the proposal is too vague to meet the requirements of a proposed rule. “And if that were to be the case, they would immediately be sued, and they would lose . . . I think the 60-day time deadline is really absurd. What DOE appears to be asking for is a complete reworking of the energy markets that would destroy competition for a vast range of plants. That sort of extremely radical change–which has not even been discussed by anyone up to this point–could not possibly be enacted on a 60-day time frame.”

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If it were, consumers would lose. “It’s impossible to tell exactly how this would work,” he says. “But it’s very clear that if some version of it were adopted, it would cost customers billions of dollars, essentially forcing them to buy dirtier electricity for more expensive prices.”

About the author

Adele Peters is a staff writer at Fast Company who focuses on solutions to some of the world's largest problems, from climate change to homelessness. Previously, she worked with GOOD, BioLite, and the Sustainable Products and Solutions program at UC Berkeley.

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