NERC warns of reliability issues in EPA climate plan

The U.S. power grid's operations monitor warned today that U.S. EPA's proposal to reduce greenhouse gas emissions from power plants may threaten reliable electricity delivery in 2020, the plan's initial compliance deadline.

"We can't conclude whether the [EPA] targets are achievable or not in all regions and all states" in 2020, said Gerry Cauley, chief executive of the North American Electric Reliability Corp., the federally designated grid reliability overseer.

A NERC report calls for detailed analysis by power companies and regulators to determine whether an unprecedented switch away from coal-fired plants to natural gas, wind and solar generation, as well as increased energy efficiency, can be managed according to EPA's timetable.

NERC also recommends consideration of a backstop "safety valve" that would allow particular coal plants to keep running outside the EPA plan's targets if required to ensure adequate power supplies and essential voltage and frequency support in vulnerable sections of the grid.

While most of the report presents the reliability issue as a fundamental but still-unresolved issue, in one place it put the issue starkly.


"The proposed timeline does not provide enough time to develop sufficient resources to ensure continued reliable operation of the grid by 2020. To attempt to do so would increase the use of controlled load shedding and potential for wide-scale, uncontrolled outages," the report says.

"We are definitely not saying the timeline is unrealistic in the end state," Cauley said in an interview, referring to the plan's ultimate goal of reducing emissions from existing power plants to 30 percent below 2005 levels by 2030. "Certainly a significant shift in resource mix is possible given time and given the resources to do it."

But the emissions reductions in EPA's Clean Power Plan, as it's called, are heavily front-loaded, and NERC's report pointedly questioned whether there is adequate time to build enough natural gas pipelines and high-voltage transmission lines for the new gas and renewable generation that will be needed to replace shuttered coal generation. "The timing becomes very challenging in those early years," Cauley said.

The EPA draft would establish state emissions reduction targets that states could meet using four "building blocks": improved efficiency at coal-fired power plants; expanded operations of combined-cycle gas units; increased supply from "zero-carbon" wind, solar and nuclear plants; and more energy efficiency programs.

The 2020 target would cause the retirement of between 108,000 and 134,000 megawatts of existing generation capacity, primarily coal plants, NERC estimated. In 2012, the U.S. had about 1,300 operating coal plants with nearly 310,000 MW of capacity.

"This resource mix shift really is an unprecedented and fundamental change," Cauley added.

Last week, EPA signaled it may be open to changes in its plan that would give state planners and power companies more flexibility. EPA's notice of data availability (NODA) invited stakeholders to provide additional comments by Dec. 1 on several issues raised in the already massive filings on the plan. They include early recognition of CO2 emission reductions before 2020, strains on gas pipeline and transmission infrastructure from heavier utilization of gas units, and possible conflicts between EPA's targets and state renewable energy generation mandates.

Cauley noted that in raising questions about reliability impacts, NERC was carrying out its congressionally set obligations. NERC said it will follow today's report with a more detailed reliability assessment early next year.

Political fodder

The report is likely to be seized on by Republican opponents of the Obama administration's power plant initiative as an argument for blocking or delaying the plan.

An analysis by ClearView Energy Partners, a Washington, D.C.-based consulting firm, said it interpreted the NODA "as further reinforcement that EPA intends to prioritize and protect the CPP as a core component of President Obama's legacy."

John Moore, senior attorney with the Natural Resources Defense Council, said concern about the 2020 deadline "is to some extent a red herring, because states have significant flexibility to use energy efficiency, natural gas and renewable investments to meet the interim target. Not everything has to be done by 2020. States can phase in compliance, first with the building blocks available now, and with others that may take more time."

The Federal Energy Regulatory Commission has given power industry planners a process to help states expand transmission infrastructure through its Order 1000 process, and that work should be going on now, Moore said.

"It's premature to talk about a reliability safety valve right now," he added. "An early signal that a reliability safety value would be available could encourage states to approve narrow plans and back themselves into an otherwise manageable reliability problem."

Cauley and Thomas Burgess, NERC vice president for reliability assessments, said the reliability issues raised by the EPA plan require more study, by NERC itself and by industry and state planners. The severe strains on electric power and natural gas supplies during the polar vortex freeze-up in January underscore the need to investigate resource adequacy, Cauley said.

"We think the question needs to be resolved -- whether there can be enough gas, and the reliability and on the gas supply," he said.

The EPA timetable could leave as little as six months to two years to build necessary infrastructure, NERC's report noted. Gas pipelines require three to five years to plan and complete, while major transmission projects have stretched out to a decade or more.

"The proposed CPP timelines would provide little time to add required pipeline or related resources capacity by 2020," the report said. It noted that the plan's projections of new wind and solar generation substantially exceed the U.S. Energy Information Administration's 2013 outlook, adding that the agency "appears to overestimate" the potential for energy efficiency contributions to the climate goals.

"NERC is concerned that reliability-related enhancements [to the grid] may not be able to be completed for a 2020 implementation," the report said.

Asked what NERC is hearing from electric power companies, whose representatives populate its operating committees, Cauley said, "We could not speak on behalf of industry or the states and wouldn't attempt to do that."

"The responses I've heard are somewhat mixed," he added. "A large portion of industry recognizes that a cleaner, more reduced-carbon fleet is the direction we're heading, and the predominant concerns are the timing and dealing with the real physical issues [involved] in getting there. I also hear some reliability concerns from individual companies and states. It's mixed.

"We've been very careful to stick to our role here, which is not to pass judgment, or criticize or endorse the targets of the proposed rule. Our role is narrowly focused on what reliability concerns may come up in the future," he said.

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