Friday, June 30, 2017

Analysis Group Answers Perry’s Questions:  Changing Resources Doesn’t Make Grid Unreliable, but Does Save Consumers Money

Powerlines on road (Credit: Click to Enlarge.
The news that DOE’s review of “critical issues” in the electric power system, which was expected the last week of June, would not be completed until July means that the Department – and Energy Secretary Rick Perry – would have at least one more week to consider the latest document submitted to inform the review.

That would be the report produced by Analysis Group, and commissioned by AEE and AWEA, entitled Electricity Markets, Reliability, and the Evolving U.S. Power System.  Its conclusion could not be more clear:  “Recently, some have raised concerns that current electric market conditions may be undermining the financial viability of certain conventional power plant technologies (like existing coal and nuclear units) and thus jeopardizing electric system reliability.  In addition, some point to federal and state policies supporting renewable energy as a primary cause of such impacts.  The evidence does not support this view.”

The independent assessment by this leading consulting firm is the latest in a series of reports from AEE and other industry groups intended to steer DOE clear of misconceptions about our fast-changing power grid – and it is the most authoritative.  Overall, the takeaway from Analysis Group’s report is consistent with prior submissions:  It is the low price of natural gas, not state and federal policies supporting renewable energy, that is responsible for market pressures causing coal and nuclear power plants to retire, and the shift in resources is doing nothing to make the electric power system less reliable. 

But Analysis Group goes one step further, saying that the changeover in generating resources is the expected result of market competition, which ultimately benefits consumers:  “The retirement of aging resources is a natural element of efficient and competitive market forces, and where markets are performing well, these retirements mainly represent the efficient exit of uncompetitive assets, resulting in long-run consumer benefits.”

Read more at Analysis Group Answers Perry’s Questions:  Changing Resources Doesn’t Make Grid Unreliable, but Does Save Consumers Money

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