Jeff Terry
This week, a US federal commission said “no” to a proposed rule that would have paid a premium to coal and nuclear power plants. The rule, put forward by Energy Secretary Rick Perry with the goal of protecting the electricity grid from power outages, was controversial. Critics said it unfairly favored two flailing industries over renewable energy. Perry argued, though, that only power plants capable of storing at least 90 days’ worth of fuel onsite—in other words, coal and nuclear—are reliable enough to keep the US grid resilient through the worst winter storms.
The Federal Energy Regulatory Commission, composed of five Trump-appointed commissioners, unanimously rejected Perry’s proposal. But the fact is, he was right about at least one thing: The US electrical grid does have a resiliency problem, and is periodically at risk of plunging millions of Americans into frozen darkness. Perry’s proposal wasn’t perfect, but it could have mitigated the risk. With his idea off the table, how should energy providers and regulators think about bolstering the system? To answer that question, it helps to understand how heat and electricity are delivered.
If you live in the continental United States, you have likely experienced some cold weather lately. Beginning around Christmas, it was unseasonably chilly as far south as Florida and Texas, while the Midwest and New England saw temperatures far below freezing for days on end. Fortunately, natural gas has done an outstanding job of meeting the public’s heating needs. In recent weeks, pipelines delivered around the clock, with no widespread gas outages, showing just how critical fossil fuels remain for sustaining people under difficult circumstances.
That said, the regional transmission organizations responsible for delivering power to every home and business get nervous during severe cold snaps. During the 2014 Polar Vortex, parts of the country were barely able to meet the need for electricity. During a deep freeze, demand for natural gas and other fuels spikes, and stormy, frigid weather can physically block delivery of both fuels and electricity.
Heat when you need it. Natural gas has been our cheapest dispatchable energy source—the kind that can be turned on and off quickly—since prices for it crashed in late 2008. About half of US homes use natural gas for heating and hot water, but it is also used by power plants to generate electricity—in 2016, natural gas provided about 34 percent of US electricity generation. (The commercial, industrial, and transportation sectors use it too.) Most of the year, these competing demands are not a problem, but when the need for home heating peaks, it can divert the supply of natural gas that might otherwise go to power plants.
Natural gas is not stored where it is used, but rather comes to our homes and power plants through pipelines, arriving just as we need it for heating, cooking, or electricity production. This is called “just-in-time” delivery. Not too long ago, the system was different. My home, built in 1937, has a coal chute. A truck would drive up and dump a load of coal into the basement, and the owner could heat the house for as long as it lasted. Homes heated with wood or fuel oil still work the same way, as do the coal-powered generators that have provided electricity for much of the last 70 years. These plants keep enormous coal piles, stored as a reserve in case of a delivery problem caused by accident or bad weather.
There are problems with both of these supply methods. Given the energy density of fossil fuels, it requires a lot of land to store a significant reserve supply. It is also dangerous for non-professionals to store large quantities of flammable material in their homes. But just-in-time delivery has its own issues. For one thing, if there is a disruption in the system, there is no back up; homeowners simply have to wait until service is restored. There is also a limit to the amount of gas that can be delivered to a region and ultimately an end user. The pipelines have a fixed capacity, so the only way to deliver more natural gas is to build more pipelines.
When demand for natural gas peaks, power plants that use it cannot get the amount they need from pipeline operators. (For obvious reasons, home heating takes priority over electricity generation.) As a result, the regional operators that control the grid have to do a lot of maneuvering to try to ensure a continuous flow of electricity. During this month’s cold snap, the grid manager in New England, ISO-NE, turned to power plants that burn fuel oil to ensure continuity. While normally oil makes up only a tiny percent of the fuel mix in that region, on January 5th it made up 36 percent of the electrical fuel mix, as the below screenshot from the ISO-NE website shows.
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Fuel Mix for ISO-NE during a winter cold snap in early 2018, retrieved January 5, 2018. Source: ISO-NE
Spiking demand for fuel oil is a potential problem: Legal restrictions on emissions limit oil use, there is a limit to the amount of fuel that can be stored onsite, and as Bloomberg reported on January 2nd, power plants start to run short on fuel oil after multiple days of cold. When they do run out, plants will shut down and homes will go cold. As we continue to convert the US grid toward natural gas and away from coal-fired generation, I expect that these efforts to keep the power on during extreme weather will become even more challenging.
A role for coal. Prolonged cold events are relatively rare. On the other hand, the one we experienced from December 25, 2017 to January 8, 2018 was the third of its kind since 2011. During the 2014 Polar Vortex, a cold front descended on the eastern and central United States. This created high demand for natural gas for heating, but also record electrical demand in the winter. (US consumers normally use less electricity in the winter than in the summer.) Natural gas redirected for residential heating could not be used for electricity generation. Fortunately, fuel-secure generators—those with onsite fuel supply, both nuclear and coal—were online or could be brought online to provide electricity for the 65 million customers of PJM Interconnection, the regional transmission organization serving 13 states and the District of Columbia. Many of the coal and nuclear plants that prevented catastrophe during the polar vortex have now been permanently closed, so can no longer come to the rescue when electricity supplies are tight.
Extreme conditions can also trigger a cascade of failures, with one leading to the next. In the winter of 2011, the weather caused rolling electrical blackouts in Texas, which disrupted just-in-time natural gas delivery in New Mexico. Thirty thousand homes lost natural gas for heating, and the state was forced to open emergency shelters as temperatures dropped as low as minus 36 degrees Fahrenheit (minus 38 degrees Celsius). Schools, state offices, and major employers closed to conserve gas. A number of coal-fired generators were able to provide electricity, which prevented the situation from spiraling out of control.
US coal plants have been closing steadily for the last 10 years, due both to economics—there are cheaper power sources—and concern over climate change. Poor economics and cheaper alternatives are also behind the closure of many nuclear plants. These two trends greatly reduce the fuel diversity of the electrical grid and can easily lead to an over-reliance on just-in-time delivery for both heating and electricity generation. After the first major cold front of 2018, it is not too difficult to foresee circumstances that could take down just-in-time delivery again. Without power plants with onsite fuel to act as backup sources, the losses could be catastrophic.
Building resilience. What, now, are the other options? When the FERC rejected Perry’s proposal on Monday, it nonetheless acknowledged the problem he was trying to address, and asked grid operators to supply ideas for making the system more resilient over the next three months. “We appreciate the Secretary reinforcing the resilience of the bulk power system as an important issue that warrants further attention," the Commission said in a statement.
The Energy Department’s suggested approach was to have large stores of fuel on hand, but that is not an absolute necessity. We could, for example, build more natural gas pipelines, so that more gas can be delivered when demand is higher. Multiple pipelines from multiple sources could avoid the kind of situation that happened in New Mexico, where power outages at the source killed the supply.
Renewable energy sources cannot currently meet resiliency requirements because we do not have batteries that can store the power they generate. Until technological breakthroughs in battery capacity, renewables-plus-storage are not the solution. A viable possibility, though, may be the Sabatier “power-to-gas” process, which would convert excess renewable electricity into hydrogen and then into methane, which can be stored and distributed alongside natural gas.
Finally, as many others have pointed out, downed power lines rather than fuel shortages also cause power outages. This is a problem that doesn’t need any technological breakthrough at all, but can be solved with increased spending on infrastructure. Many power lines could be buried so that they are not at the mercy of wind and snow.
As they continue to investigate grid resiliency, I hope that the Energy Department, the FERC, and the grid operators are open to all of these options. Fuel availability continues to be a concern for power providers, and as fuel-secure plants (like coal and nuclear) continue to close, the probability of a major failure will increase. Severe cold events like the three we have seen this decade may be uncommon, but they do occur, and just-in-time delivery is not robust enough to see us through them. I hope we don’t spend so long looking for the perfect solution that we fail to act at all.
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