Are more renewables and less baseload generation making the grid less stable and more vulnerable to attacks? During today's OnPoint, John Moore, director of the Sustainable FERC Project at the Natural Resources Defense Council, explains why he believes electric power generation will continue to move away from baseload power. He also discusses the future of the Federal Energy Regulatory Commission once quorum is restored.
Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. With me today is John Moore, director of the Sustainable FERC Project at the Natural Resources Defense Council. John, thank you for joining me.
John Moore: Thank you Monica. It's good to be here.
Monica Trauzzi: So John, many moving parts on energy and environment policy right now with, in many cases, uncertainty surrounding next steps on regulation.
Recently EPA Administrator Scott Pruitt commented that, "The grid is more vulnerable to attacks when coal generation is at or below 30 percent." When coal is replaced by renewables, does the grid become less stable and more vulnerable to attacks?
John Moore: Well Monica, I have to say when I first heard about Administrator Pruitt's comments, my first thought was that the most protective resources are the wind and the sun, which terrorists can't attack as far as I know so far.
The reality is that beyond that, we know the grid can function on very high levels of renewable energy. It's not just the federal studies that say so. It's on the ground experience in large parts of the country where coal is largely irrelevant now. That's a quote from the head of the New England grid operator. So whether or not it's the grid operator's experience or the studies that say we can get up to 80 percent of renewable energy in our country, I think that's the real reality.
Monica Trauzzi: But there are concerns and questions relating to replacing too much baseload generation with wind and solar. Do you think potentially the administrator misspoke and he was pointing to that or do you specifically think he meant a terror attack or some kind of cyberattack?
John Moore: I think he was referring to fuel security and the perception that a pile of coal is more secure than natural gas or something else. I understand the term baseload is a comforting term, but the reality is our nation is moving away from that term, and we can talk maybe more about that in a little bit.
Monica Trauzzi: FERC's recent infrastructure update showed to this point an increase in wind, solar and natural gas capacity in the first quarter of 2017. No new coal-fired capacity. This is at a time when we really hear the Trump administration ramping up and doubling down its talk about the coal industry and coal jobs, very coal-positive rhetoric.
Do you believe that we will see concrete policies coming out of this administration that boost investments in coal?
John Moore: I think that we are encouraging the administration to focus on things like renewable energy and transmission infrastructure in particular. We know the president supports new infrastructure, and in our view, transmission infrastructure is a much smarter way to go for the administration. The interest is definitely there.
I think that what the administration can actually do related to FERC-focused policies is much less than might meet the eye.
Monica Trauzzi: So, is that a no? We won't see policies specific to coal?
John Moore: I think we'll see what happens with FERC and with the administration.
Monica Trauzzi: What do you think the net impact is of the Trump administration's broad support of the coal industry?
John Moore: I think that the markets are speaking. We know that coal is on the decline all around the country. It's nearly nonexistent in New England, in California, and it's declining in other areas. The reason is it's just uneconomic and that's a fact pure and simple.
The markets are speaking and so I think that's the reality. Not policies to pull back and revive a resource that's clearly on the wane.
Monica Trauzzi: So FERC has been in a bit of a state of limbo lately with just two commissioners. Senate Energy recently approved the president's two nominees, new nominees for FERC, and we're hearing from Chairwoman Murkowski that she hopes that a vote will come to the floor before the Fourth of July.
Once quorum is restored on the commission, what are the top-tier issues that you believe need to be tackled by the commissioners?
John Moore: Sure. In our view, FERC's got a few really big items on its plate. No. 1 is addressing the markets and public policy issues that was the subject of a major technical conference in early May that's also in play in the major eastern organized markets.
It's also got Order 1000 reform on its list. It talked about that a year or two ago, and we're looking for some improvements to the way the regions implement Order 1000.
Distributed energy resources, rooftop solar and whatnot along with energy storage also is big. FERC's got a pending rulemaking out on that.
We hope that FERC moves forward as quickly as possible to finalize that rule. I think that rule is especially important. It's part of the reflection of the changing grid we operate in with more small-scale resources, a diversity of resources and even the customers like you and me now actually becoming market participants through selling resources into the grid.
Monica Trauzzi: There's also a backlog of infrastructure —
John Moore: Absolutely —
Monica Trauzzi: — projects that need approval. So could be some time before we actually see the balls rolling on all these different topics —
John Moore: We know absolutely that they've got a lot of pipeline approvals in front of it. We will really be asking FERC as it moves forward with those approvals for the pipelines to do a better job of the way it reviews and approves pipelines. Looking longer-term need, considering regional need for pipelines and updating its now 20-year-old or so policy guidance on how it looks at certifications for new pipelines.
Monica Trauzzi: Energy Secretary Perry has ordered a grid study that is to look at subsidies and baseload generation. There have already been criticisms of the study following the leak of a memo where Perry called for a review of regulatory burden, mandates and tax and subsidy policies and the impact that that all has on the closure of baseload plants. Will the career staff at DOE be able to do an impartial and fair job on this study?
John Moore: That's a really good question. I hope so. I'm a bit skeptical about the study given that the study assumes that we need baseload power as it's been defined in the past to operate a reliable grid. I think that if the study is intellectually honest, they might not actually like the result that they find.
Monica Trauzzi: All right. It'll be interesting to watch that one.
John Moore: It will be.
Monica Trauzzi: All right. We'll end it right there. Thank you so much for coming on the show.
John Moore: Thank you, Monica.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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