The nation's grid reliability watchdog issued a report Tuesday that could undermine the Trump administration's push to prop up coal and nuclear plants by showing that natural gas can increasingly be relied upon for reliable electricity production even when faced with extreme weather events.
The North American Electric Reliability Corporation's study recommended that policymakers look to bolster the reliability of natural gas-fired power plants, especially as coal and nuclear plants face premature retirements. It found that the fuel supplies for natural gas plants have become more diversified and resilient to outages, with less concern being raised over widespread outages because of the nation's shift from coal to natural gas.
"Natural gas supply sources have become more diversified, reducing the likelihood of natural gas infrastructure outages affecting electric generation," the study found, noting that enhanced reliability to supply disruptions has come from the shale energy boom.
"With the increase in shale production in other areas of North America, the risk of Gulf of Mexico hurricanes impacting natural gas deliveries to electric generation has been significantly reduced," the report said. The abundant supply of shale gas has lowered the cost of natural gas, resulting in coal and nuclear plants becoming less economically competitive.
Energy Secretary Rick Perry argues that the grid that NERC helps oversee would function better if market incentives were given to coal and nuclear plants for their ability to store fuel on site for months at a time.
Perry proposed a rule, now pending at the Federal Energy Regulatory Commission, that says nuclear and coal plants should receive payments for storing at least 90 days of fuel on site, whereas natural gas plants are dependent on pipelines that can face constraints. The payments would come from the grid operators that FERC oversees.
NERC acknowledges the problems faced by coal and nuclear retirements, but it does not say giving the plants incentives is the solution.
Thomas Coleman, NERC's director of reliability assessments, said the report showed that most of the constraints faced by natural gas can be avoided through better planning.
“NERC has evaluated how the loss of key natural gas infrastructure facilities could impact the reliability of the bulk power system,” Coleman said. “Comprehensive planning by planning coordinators can significantly increase the grid’s resilience.”
Without addressing Perry's proposal, the reliability watchdog recommends that the Energy Department seek to quantify the number of dual-fuel power plants as a way to stave off any potential problems with natural gas. Dual-fuel power plants are able to use a different fuel source if the primary fuel source is depleted or is somehow constrained.
Typically, natural gas plants can be made to run on oil if a pipeline breaks, for example, and natural gas cannot be burned to produce electricity.
NERC said dual-fuel power plants would make the grid more resilient against the type of disruptions contemplated by the Perry proposal. But there is a hitch: Running dual-fuel power plants increases greenhouse gas emissions by using dirtier fuels such as oil and requires special waivers from the Environmental Protection Agency.
"Temporary air permit waivers may be needed from environmental agencies in advance of an event of a sustained natural gas infrastructure disruption," it said. "Furthermore, the necessity for air permit waivers should be incorporated in resilience planning initiatives when they are required."
NERC said that "dual-fuel, backup pipeline capacity, and/or alternative sources of supply should be required in areas with significant risk."