WASHINGTON (Reuters) - Cheap natural gas and the growth in renewable energy are speeding up the closure of coal and nuclear plants, putting the resilience of the U.S. electric grid at risk, according to an Energy Department report released on Wednesday.
The long-anticipated study could rankle renewable energy advocates who fear the administration of President Donald Trump will undermine government support for the wind and solar industries as part of its broader drive to revive the ailing coal sector.
Energy Secretary Rick Perry commissioned the study in April to evaluate whether “regulatory burdens” imposed by past administrations - including that of President Barack Obama - had forced the premature retirement of baseload power plants that provide nonstop power, like those fired by coal and nuclear fuel.
Obama had introduced a raft of regulations intended to slash emissions of carbon dioxide blamed for climate change, a policy course that accelerated the retirement of older coal-fired power plants and bolstered the nascent solar and wind sectors, which depend heavily on weather conditions for their power output.
“It is apparent that in today’s competitive markets certain regulations and subsidies are having a large impact on the functioning of markets, and thereby challenging our power generation mix,” Perry said in a letter introducing the study. “It is important for policy makers to consider their intended and unintended effects.”
The report, conducted by DOE staff, said that continued closure of baseload plants puts areas of the country at greater risk of power outages. It offered a list of policy recommendations to reverse the trend, including providing power pricing advantages for baseload plants to continue operating, and speeding up and reducing costs for permitting for baseload power and transmission projects.
Last week, the newly appointed chairman of the Federal Energy Regulatory Commission, Neil Chatterjee, said coal plants need to be “properly compensated to recognize the value they provide to the system.”
The findings of the report differ from those presented in an earlier draft, seen by Reuters in July, which had concluded that the growth of renewable power had not harmed the reliability of the grid and that significant increases in renewable power generation remained possible.
That draft had not yet been reviewed by the administration, the last step before publication.
Some coal and nuclear energy groups welcomed the final report’s findings.
“This is a much-needed, pragmatic look at U.S. electricity reliability and resilience, including the priority of maintaining critical clean baseload power as electricity markets change,” said Rich Powell, director of ClearPath, which advocates for nuclear and hydropower.
Solar and wind advocates found the report troublesome.
Graham Richard, chief executive officer of clean energy advocacy business group Advanced Energy Economy, said the report “seriously overstates the challenges associated with new energy resources.”
Reporting by Valerie Volcovici; Editing by Leslie Adler