Coal Kept the Lights On During the Winter Months

The winter of 2017/2018 saw freezing weather, causing energy demand to increase above normal levels. One of the longest and intense deep freezes ever recorded for the East Coast of the United States with snow, ice and frigid temperatures occurred between December 27, 2017 and January 8, 2018, placing the East Coast electric grid under extreme stress. The period from January 4th to 6th accounted for three of the top ten winter demand days in the history of the PJM Interconnection. Electricity consumption rose 21 percent over average daily loads during that period.

According to the National Energy Technology Laboratory, coal and oil power plants, many of which are being retired, kept the regional grid from overloading and widespread blackouts from occurring. The Laboratory’s analysis of the PJM system found that coal generation rose from 20 gigawatts to 51 gigawatts of supplied capacity. Natural gas generation averaged about 25 gigawatts, and was limited by pipeline constraints and competition from home-heating. Solar power declined due to the clouds and snow. Wind power also declined.

If the coal capacity had not been available, there would have been a 9 to 18 gigawatt shortfall, depending on the level of imports and generation outages, leading to a system collapse. Unfortunately for consumers, the 30 gigawatts of coal that ramped up to meet PJM load includes the units most likely to retire due to insufficient market support. As more of these units retire, the ability of the system to respond to extreme events deteriorates. To avoid a system collapse, retiring units would need to be replaced with other generation sources capable of providing power under such circumstances along with their associated infrastructure (e.g. pipelines, transmission).

The National Energy Technology Laboratory report included analysis of five other Independent System Operators (ISO) besides the PJM Interconnection. They are: ISO New England, New York ISO, Midcontinent ISO, Southwest Power Pool, and the Electric Reliability Council of Texas. Other findings of the Laboratory report include:

• Across the six Independent System Operators analyzed, coal provided 55 percent of the incremental daily generation needed (764 out of the 1213 gigawatt hours per day);
• Combined, fossil and nuclear energy plants provided 89 percent of electricity during peak demand across the six Independent System Operators with 69 percent coming from fossil plants (see chart below);
• The value of fuel-based power generation resilience in PJM was estimated at $3.5 billion;
• Lack of sufficient natural gas pipeline infrastructure and the increase in natural gas demand for home heating led to large increases in natural gas spot prices exceeding 300 percent across the Northeast and Mid-Atlantic;
• Natural gas price spikes, increased demand, and pipeline constraints led to significant fuel oil consumption in dual-fueled units in the Northeast;
• Wind power was 12 percent lower than on a typical winter day;
• Renewables imposed a resilience penalty on the system as output decreased and demand increased;
• Underestimation of coal and nuclear retirements could cause reliability problems and an inability to meet projected electricity demand.

Source: National Energy Technology Laboratory

The laboratory report notes the following definition of resilience from a National Infrastructure Advisory Council Report in 2009 as “Infrastructure resilience is the ability to reduce the magnitude and/or duration of disruptive events. The effectiveness of a resilient infrastructure or enterprise depends on its ability to anticipate, absorb, adapt to, and/or rapidly recover from a potentially disruptive event.”

Coal’s Demise

Coal’s demise was created by the Obama Administration’s “war on coal”, subsidies and policies that favor renewable energy, and competition from low cost, less carbon-intensive natural gas. Over 260 coal-fired power plants have closed since 2010 due to onerous regulations imposed by the Obama administration, state renewable energy mandates, federal renewable energy subsidies, and competition from natural gas power plants.

The Obama Administration’s regulatory vendetta against coal included the Mercury and Air Toxics Standards that were finalized in 2012 and the Clean Power Plan, which is being revised or repealed by the Trump Administration. Over half of the nation’s states have renewable energy mandates (renewable portfolio standards) that require a certain amount of renewable energy to be generated by specified dates. Federal government subsidies for wind (the production tax credit) and solar power (the investment tax credit) have been in effect for years and are so advantageous that these renewable power producers can charge less, or even nothing at all, for their power, hurting the competitiveness of traditional generating technologies. Coal’s lack of competitiveness with natural gas came about because of technology (hydraulic fracturing and directional drilling) that has significantly lowered the cost of producing natural gas.

These subsidies, policies and technologies have made new wind, solar, and natural gas technologies less expensive to build than new coal-fired technologies. But existing power plants are still less expensive to run than new power plants according to the Institute for Energy Research’s report on The Levelized Cost of Electricity from Existing Generation Resources. The report shows that existing coal-fired power plants, whose capital costs are mostly paid, are on average less expensive to operate than new power plants, whose capital costs must be covered in the cost of operation.

Conclusion

The National Energy Technology Laboratory’s analysis of the weather events this past winter show that coal was called upon to keep the lights on and to ensure electricity’s affordability when solar and wind were not available and natural gas was limited due to its priority use for home heating or its lack of infrastructure. Without coal this winter, the electric grid could have been under a “system collapse”, according to the laboratory’s analysis.

 

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