ORIGINAL REPORTING: Does New Energy threaten power reliability?
Is renewable energy threatening power reliability? Reliability concerns are merely a 'Chicken Little argument' fossil generators use to advance their interests, analysts say
Herman K. Trabish, June 1, 2017 (Utility Dive)
Editor’s note: The White House continues to use the Energy Department and the EPA to push its fossil fuel agenda.
Low and negative prices in wholesale power markets are the subject of intense scrutiny in the power sector today. Traditional generators warn that “around-market” energy policies like renewable portfolio standards and nuclear subsidies are depressing energy prices, threatening cost recovery for dispatchable coal and gas plants and potentially threatening reliability. The concerns were the subject of a widely-watched recent technical conference at the Federal Energy Regulatory Commission as well as the subject of a controversial review of baseload power underway at the Department of Energy. Generators say something must be done to “level the playing field” for their fossil fuel plants, nuclear and renewable sources that receive direct subsidies.
A number of power market experts, however, say the arguments are overblown. There are, perhaps, 50 hours per year when prices are negative and, perhaps, another 50 hours per year when prices are $10,000/MWh, but the important focus is the average power price during the other 8660 hours per year when the power system is delivering, according to Michael Hogan, senior advisor to the Regulatory Assistance Project, who previously worked in gas generation. Brattle Group economist Hannes Pfeifenberger agreed, noting that the bigger problem is oversupply and low prices.. But far from a problem that needs a policy fix, the analysts say the negative prices are the result of an efficient market and too much inflexible capacity… click here for more