Energy Dept. chief Perry says coal retirements threaten to destabilize the grid

Department of Energy (DOE) Secretary Rick Perry ordered a review (PDF) of electricity markets and reliability late last week, saying that "certain policies" have hindered the development and use of baseload energy sources like coal. Although Perry never mentions renewable energy explicitly in his letter, he references "significant changes within the electrical system." That seems to be a direct allusion to the record amount of renewable capacity that has been added to the grid in recent years.

The Obama administration had supported initiatives to increase renewable energy on the US grid given the urgency of climate change and with a mind to mitigate the health problems that come with pollution related to coal burning and mining. Although wind and solar power are intermittent resources (meaning they only produce power when there’s wind and sun), government agencies including the DOE have funded research (PDF) to improve renewable energy efficiency and energy storage. The idea has been that adding renewable energy to the grid makes it more resilient, because power generation doesn’t rely on shipments of natural gas, coal, or oil. It also decreases the grid's reliance on large fossil fuel-burning facilities and allows more distributed energy generation.

The Trump administration, on the other hand, has been openly critical of climate change science, with the president even falsely claiming that climate change is a hoax made up by China. In March, the president killed the Clean Power Plan and ordered agencies to ignore climate change. Perry, too, spent most of his early career rejecting climate change science, but during his January Senate confirmation hearing the former Texas governor said he now accepts science showing that the Earth is warming. Still, Perry has remained coy about whether he believes that climate change is caused by humans (which scientific evidence has been unambiguous about).

Of course, Perry's history isn't purely boosting fossil fuels. He also led a massive expansion of renewable wind power during his time as governor of Texas. But the Trump administration that Perry works for has promised to bring back coal jobs, something that industry analysts and even coal industry executives have been skeptical of due to the fact that coal's struggles stem from competition with the low price of natural gas. In addition, coal mining has become increasingly automated, meaning fewer workers are needed to produce the same amount of coal. Utilities have opted for other forms of power generation for many years now. The Energy Information Administration (EIA), a statistical branch of the DOE, notes that most of the coal-burning facilities operating in the US today were built before 1990—making them ripe for retirement and replacement with something more modern.

Perry has requested that the review of electricity markets and reliability be completed within the next 60 days.

In his letter, the secretary admitted that Americans currently “utilize heating, air conditioning, computers, and appliances with few disruptions.” But he wrote that “grid experts have expressed concerns about the erosion of critical baseload resources,” naming specifically coal, natural gas, nuclear, and hydroelectric power.

The erosion that Perry suggests doesn't seem quite so dire yet. Regional transmission organizations like the Southwest Power Pool (SPP) and the Electric Reliability Council of Texas have been able to accept up to 50 percent wind energy penetration during low-demand times. A 2015 study from SPP said it could "'reliably handle’ wind representing up to 60 percent of internal SPP load.” PJM, a regional transmission organization that serves the East Coast, said in March that recent coal retirements don't threaten grid reliability, according to Utility Dive. PJM was also the subject of extensive research from Princeton and the University of Delaware on how much offshore wind the wholesaler could accept. A conservative estimate suggested that 11 to 20 percent of PJM's power demand could be met by offshore wind additions. In California, where a natural gas leak shut down one of the biggest storage facilities on the West Coast in 2015, the state ordered battery storage installations to help smooth out potential baseload disruptions.

Perry went on to single out coal, claiming that “regulatory burdens introduced by previous administrations” were created to reduce coal-fired generation. “Such policies have destroyed jobs and economic growth, and they threaten to undercut the performance of the grid well into the future.” This argument holds little water, however, when the DOE itself released a survey of energy sector employment in January 2017 that showed that 6.4 million people worked in the "Traditional Energy and Energy Efficiency industries” in 2016. Those numbers reflected “over 300,000 net new jobs in 2016,” or 14 percent of the nation’s job growth. In 2016, the solar industry grew 10 percent to employ approximately 260,077 people who spend half or more of their time on solar-related projects. By contrast, the coal industry (including coal production and power generation) employed 160,119 people in 2016. The real employment powerhouses in the US energy economy have traditionally been petroleum and natural gas, which employed 502,678 and 392,869 people in 2016, respectively.

Perry said that the results of the review would help to establish policies from the Trump administration, with a focus on “reliability, resiliency, affordability, and fuel assurance.”