What’s happening: The bulk power system’s resource mix is changing rapidly. Just over the last year, the BPS has added some 19 gigawatts of wind and solar on-peak capacity, or capacity that’s available at the hour of peak demand, according to NERC. Those additions dwarfed the 14 GW of gas additions.

Over the same period, the BPS lost 18 GW of coal on-peak capacity and 2 GW of nuclear.

“We are systematically replacing our well-understood, large central generation station generation with newer, largely cleaner resource mix,” said John Moura, NERC’s director of Reliability Assessment and Performance Analysis.

The benefits: The trends are good, Moura said, and mentioned the societal and environmental benefits of cleaner energy.

The U.S. has been able to cut its greenhouse gas emissions footprint immensely in recent decades, thanks largely to the transformation of the power sector. The per megawatt-hour carbon intensity of electricity was cut nearly in half between 2005 and 2021, EIA data show.

Natural gas replacing coal has carried a lot of that weight, but renewables have been and will continue to be a big part as well. Wind and solar rose from 2% of non-carbon generation in 2005 to 31% last year.

The risks: Moura and NERC’s report said the transition carries risks if not done properly.

For example, “solar on-peak contributions are 0% in most areas during winter when the peak occurs in low light,” NERC said. For coal, the amount of light doesn’t matter for performance.

In other words, the +19 GW of wind and solar mentioned above don’t de facto offset the -18 of coal.

“We need to pay careful attention to the pace of generator retirements so that we can prevent the energy risks and loss of essential reliability services that could occur if the solution for retiring generators are not in place in a timely manner,” NERC manager of reliability assessments Mark Olson said yesterday.

Renewables advocates have insisted the solution to all this is available in battery storage — and storage has had a solid year, setting a new record for newly installed grid-scale capacity in Q3 with 4,733 megawatt-hours of additions.

Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Jeremy Beaman (@jeremywbeaman) and Breanne Deppisch (@breanne_dep). Email [email protected] or [email protected] for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email, and we’ll add you to our list.

BREAKING — BIDEN BEGINS REFILLING SPR: The Department of Energy said early this afternoon it will begin the process of purchasing oil to refill the nation’s Strategic Petroleum Reserve following a dip in prices.

GLOBAL COAL CONSUMPTION POISED TO HIT ALL-TIME HIGH IN 2022: Global coal demand is on track to hit an all-time high in 2022, according to a new report from the International Energy Agency.

Worldwide consumption is slated to rise by 1.2% in 2022, surpassing 8 billion tons in a single year for the first time ever, and eclipsing the previous record set in 2013.

Based on the report and latest market trends, the report forecasts that coal consumption will remain flat at the 2022 levels through 2025, amid robust and continuing demand from emerging Asian economies.

The rise in coal consumption is a setback to global efforts to transition to renewable energy sources, including the ambitious goal set by the Biden administration to slash carbon emissions to 50% of 2005 levels by 2030.

The trend is driven in large part by a surge in natural gas costs, especially in the EU, where countries relied more heavily on gas and coal power generation as they struggled to offset Russian fossil fuels and lower hydro and nuclear power generation.

…This trend has been particularly exacerbated in Germany, Europe’s largest economy, which used coal-fired plants to generate more than 36% of its power fed into the country’s grid between July and September, compared to just 31% in the third quarter of 2021.

ICYMI: SENATE VOTES DOWN MANCHIN’S PERMITTING REFORM AMENDMENT: The Senate voted down an amendment on Sen. Joe Manchin’s updated permitting reform bill yesterday, 47-47, as Democratic Party leaders failed to honor an agreement made to the West Virginian to secure his support for climate spending legislation.

Some Democrats in the chamber had opposed the bill—albeit by much smaller margins than previously expected—because it would facilitate new fossil fuel infrastructure, including by ordering relevant agencies to complete the Mountain Valley Pipeline, a mostly constructed natural gas pipeline traversing West Virginia that’s been held up in court and strongly opposed by environmental groups.

Republicans, meanwhile, were frustrated about being cut out of the process.

Still, Manchin is expected to continue to push for a compromise deal next year. In a statement released after the vote, he slammed Republican colleagues who voted against the measure: “Once again, [

Senate Minority Leader] Mitch McConnell and Republican leadership have put their own political agenda above the needs of the American people,” he said.

TOKYO TO MANDATE SOLAR PANELS ON NEW HOMES: Tokyo’s local assembly passed a regulation dictating that all new residences built by large-scale homebuilders after April 2025 must have solar panels installed on the roof in order to cut carbon emissions, a first-of-its-kind that aims to significantly ramp up solar capacity in Japan, the world’s fifth-largest carbon emitter, which has struggled to deliver on its goals of achieving carbon neutrality by 2050.

CALIFORNIA OVERHAULS STATE ROOFTOP SOLAR PROGRAM: Regulators in California voted unanimously yesterday to reform the state’s net energy metering program for new residential solar users, changing the rate and compensation structure for generation exported back to the grid.

Commissioners said the proposal, which effectively reduces the compensation paid to solar users relative to current rates but includes other changes designed to encourage more installations among lower and middle-income families, was significantly more fair than the current regime and stressed that it was designed to help encourage installation of storage alongside solar generation systems.

Analysis from the CPUC concluded that the average new distributed solar customer will save $100 per month on electricity bills under the new rules, while those installing solar and battery storage will save at least $130 a month on average.

More on the background: The Public Utilities Commission was in a challenging position of reducing the liberal compensation structure that many saw as forcing low and middle-income utility customers to subsidize the residential solar systems of those more well off, and maintaining strong incentives to keep encouraging installations.

The proposal approved yesterday included notably lighter reforms than its predecessor proposal, which was introduced last December and touched off a yearlong lobbying campaign of opposition from solar interests and prominent public figures like Elon Musk.

For example, the original proposal sought to charge residential solar customers a new “grid participation charge.” Changes adopted yesterday included no such charge.

Commissioners yesterday sought to allay the fears of those who weighed in against the revised proposal, including the dozens of members of the public who called in to the meeting to argue that would smother solar installations and favor PG&E, the utility giant with a not-so-good reputation in California.

Commissioner John Reynolds, before he voted in favor of the proposal, said the changes are expected to put a dent in new distributed solar installations, but he insisted the demand would recover and not be sizable enough to threaten meeting California’s climate goals.

ENERGY IN NDAA: CONGRESS MANDATES ENERGY WORKING GROUP: The newly passed National Defense Authorization Act directs the Defense Department to establish a working group to determine the military’s future operational energy needs.

The working group is to “address operational energy needs of each military department and combatant command to meet energy needs in all domains of warfare.”

It also directs a preferencing of “independent operational energy systems” that can reduce pollution and greenhouse gas emissions, compared to energy systems in operation currently, like advanced nuclear reactors, hydrogen fuel-based systems, and battery storage.

The Rundown

CNBC Planned wind farm told it will need to shut down for five months a year to protect parrots

Utility Dive After substation attacks, FERC orders NERC to consider increasing grid security requirements

AP US opens probe of Cruise robotaxi braking, clogging traffic

Bloomberg US grid faces a new threat as regulators balk at higher bills

Calendar

TUESDAY | DECEMBER 20

3:30 p.m. Location TBA The DC Council and Sierra Club will have its monthly Clean Energy Committee meeting. Learn more and register here.