August 23, 2017
10:05 PM EDT
The Energy Department said Wednesday the government should make it easier and cheaper to operate power plants, including coal and nuclear plants, to strengthen the nation’s electric grid.
The department said in a new report that the closure of many plants that once formed the backbone of the grid has raised the risk that consumers might not have reliable electricity.
In a letter accompanying the report, Energy Secretary Rick Perry said the U.S. is fortunate to have many sources of energy and should use them all.
Advocates for renewable energy have been bracing for the report since drafts that leaked to the press in recent weeks hinted that the Energy Department would conclude that renewable energy and federal regulations have done little to improve grid reliability.
In a key recommendation, the report urges the federal government to make licensing and permitting faster and cheaper for facilities “such as nuclear, hydro, coal, advanced generation technologies, and transmission.”
The report likely marks the beginning of a fierce battle as supporters of competing technologies seek preferential treatment from politicians and regulators. Most sounded guarded in their initial review of the report.
A group of electric utilities that supports coal generation said the report encouraged proper planning to maintain a reliable grid. Scott Segal, the director of the group, the Electric Reliability Coordinating Council, said coal and nuclear provide reliability while renewables will ensure a diverse energy mix.
Tom Kiernan, CEO of the American Wind Energy Association, said valuing reliability and lowering regulatory barriers will help his industry grow.
Abigail Ross Hopper, CEO of the Solar Energy Industries Association, said renewables improve performance of the grid and that policymakers must “account for the many benefits solar energy offers.”
The U.S. energy market has undergone dramatic changes in the past 15 years. About 15 per cent of the generating capacity that existed in 2002 has been retired, including many coal-fired plants that were replaced by plants burning cheap natural gas. Natural gas replaced coal as the leading fuel for electricity in 2016.
Wind and solar power have also undermined coal and nuclear, the Energy Department report concluded. Helped by federal tax credits and favourable state policies, the department said, renewables have lower variable costs than so-called baseload plants — the coal and nuclear behemoths that steadily churned out electricity at high rates for many years.
The Energy Department report also heaped blame on environmental regulations. It said that the largest number of coal plant retirements occurred in 2015, the deadline for operators to install new pollution-control equipment.
Perry ordered the report back in April, saying a review of electricity reliability and markets was overdue.
In a cover letter to the 187-page report, Perry said, “We must utilize the most effective combination of energy sources with an ‘all of the above’ approach to achieve long-term, reliable American energy security.” He has said that the Trump administration would pursue policies that promote reliable and affordable electricity from diverse energy sources.
President Donald Trump has vowed to revive the coal industry. The administration has rolled back some energy regulations, and Trump announced he will withdraw the U.S. from the Paris accord on controlling climate change.