Clean energy groups challenge DOE grid reliability report

• A July report in which the U.S. Department of Energy warned of widespread blackouts if coal and gas plants are allowed to retire “falls far short of a serious assessment of reliability and resource adequacy,” three clean energy organizations said earlier this month in a formal rehearing request.
• The Aug. 6 filing submitted by Advanced Energy United, the American Clean Power Association and the American Council on Renewable Energy says the resource adequacy document, though styled as a “report,” is in fact an “arbitrary and capricious” rule intended to bolster interventions by DOE under the Federal Power Act.
• At least one federal agency — the Department of the Interior — has already cited the DOE resource adequacy protocol in an official action. It referred to the protocol in an Aug. 1 order that staff consider the capacity density of energy projects proposed on federal lands, singling out wind and solar as “inefficient.”

DOE has 30 days to deny or respond to the rehearing request, Advanced Energy United Managing Director Caitlin Marquis said in an interview. If DOE denies the request, the groups would then have 60 days to file a judicial appeal, she said.

“We’ve provided some compelling counterpoints, so we hope they engage with our concerns,” Marquis said.

The report based its analysis on incomplete or unrealistic assumptions about load growth, net generation additions and individual resources’ contributions to overall system reliability through 2030, said Kent Chandler, former chairman of the Kentucky Public Service Commission and resident senior fellow at the R Street Institute, a free-market think tank.

“My takeaway from the report was that it’s an interesting … scenario, but it’s not the end-all, be-all of where we are and where we’re going to be on resource adequacy moving forward,” he said, calling DOE’s assumptions “near-extreme.”

Marquis and Chandler noted that the report assumes scheduled coal, gas and oil power plant retirements continue apace and that only new resources in the most advanced stages of development today actually come online by 2030.

And its survey of generator additions appears incomplete, omitting resources — such as the 800-MW nuclear plant expected to resume operations in Michigan later this year — that are very likely to hit the grid before 2030, Marquis said.

On the demand side, the DOE report’s load growth expectations are plausible but well above some other credible estimates, she added. The report sees about 50 GW of U.S. data center capacity added from 2025 to 2030.

DOE also uses simplistic, unrealistic assumptions when modeling resource types’ reliability contributions, Chandler said. Its analysis of gas-fired power plants’ reliability, for example, appears not to account for the possibility of cascading fossil power plant failures due to pipeline outages, frozen coal piles and other fuel-related disruptions during extreme weather events, such as those that happened when Winter Storm Elliott hit the East Coast in 2022.

Grid operators like the PJM Interconnection recognize “the increasing probability that in the riskiest hours of winter, those generators may not be able to meet the need” and have given them “a significant [capacity accreditation] haircut” as a result, Chandler said.

These and other reliability issues are known to utility regulators and grid operators, Marquis said, but DOE nevertheless discounts their ability to ensure resource adequacy and shore up reliability over the next five years.

The result of acting on the report could be a grid that’s more expensive to operate and maintain. A DOE mandate to prevent uneconomic fossil power plants from retiring could cost U.S. ratepayers $3.1 billion annually by 2028, according to a Thursday report from the energy consulting group Grid Strategies.

“A utility rate case is a better-tailored tool to take all the available solutions and costs into account and make measured decisions rather than [deploying] this blunt instrument that has a really high ratepayer cost,” Marquis said.