Electric Grid Operators Tell Panel They May Not Keep Pace With Demand

Reform federal permitting relax state policies restricting fossil fuels but don’t repeal Biden-era incentives for renewable energy development, they say.

Electric transmission operators told a House panel on March 25 they’re hustling to meet growing demand and that without federal and state regulatory flexibility—especially in the Northeast—many will struggle to expand already-stressed grids to power an electrifying economy.

“The nation’s transmission infrastructure is simply not ready for this accelerating future,” Southwest Power Pool (SPP) Executive Vice President Lanny Nickell said.
SPP, a regional transmission organization (RTO) that serves 18 million ratepayers in 14 states, will need “five times the investment” it anticipated three years ago, he said in his testimony before the House Energy and Commerce Committee’s Energy Subcommittee, adding, “Our industry is at a pivotal moment.”

“It’s no secret our country is in the midst of a reliability crisis, and it could not come at a worse time,” committee chair Rep. Bob Latta (R-Ohio) said. “It is not clear the pace at which base load generation is coming online will bridge the gap of retiring supply and meet increasing demands over the next few short years.”

The grid operators, who manage wholesale electricity markets across two-thirds of the United States, relayed similar fears about demand outracing capacities to grow. Several of them raised concerns about increasing reliance on intermittent renewable sources—especially weather-dependent solar and wind—without corresponding boosts in “dispatchable base-load” provided by fossil fuels such as natural gas, coal, and oil.

“This gap between retirements and growth in demand alone counts over 240 gigawatts, or an equivalent amount of power needed to support 195 million homes over an entire year,” Energy and Commerce Committee Chair Brett Guthrie (R-Ky.) said.

Coal-fired power was already declining, accounting for 50 percent of the nation’s electricity in 2005, 27 percent in 2018, and 14 percent in 2024, a Federal Energy Regulatory Commission (FERC)  report documents. Retirements accelerated under the Biden administration’s Clean Power Plant 2.0 and Greenhouse Gas (GHG) rules.
Environmental Protection Agency (EPA) Administrator Lee Zeldin is reviewing both rules under President Donald Trump’s emergency actions, including his “National Energy Emergency” declaration.
That’s good, PJM Interconnection (PJM) President and CEO Manu Asthana said, because “power plants can’t operate if governments won’t let them.” He noted that a data center can be built in 18 months, while it “takes five years to build a new power plant.”

“One of the easiest approaches” to avoid that, she said, “is to slow down the retirements of these resources.”

MISO’s 223-member utility and industrial consumers that serve 45 million people across 15 states have a “growing preference,“ she said, ”for low or no-carbon emission resources that often do not have the 24/7 availability, flexibility, and duration attributes of the power plants they are replacing.”

Power lines near a coal ash pond from an abandoned coal-fired power plant near Elizabeth River in Chesapeake, Va., in 2016. (AP Photo/Steve Helber)

Power lines near a coal ash pond from an abandoned coal-fired power plant near Elizabeth River in Chesapeake, Va., in 2016. AP Photo/Steve Helber

Incentivizing Intermittents

Guthrie, Latta, and other Republicans said the surge in renewable energies powering the grid has been spurred by 2022’s Inflation Reduction Act (IRA). That law authorizes billions over 10 years in tax credits, low-interest loans, and grant programs to incentivize private investment in renewable energies, advanced manufacturing, and grid expansion.

“Significant subsidies for intermittent generation undermine the economies of base load, or on-demand dispatchable generation resources, that are essentially keeping lights on,” Latta said.

Trump’s executive actions suspended some IRA programs, and the newly seated GOP-led Congress has pledged to gut much of it. Democrats say this would derail momentum in grid expansion just as more energy is most needed.

Grid operators and FERC “are making progress” in trimming interconnection queues, “and Congress should help them,” Rep. Kathy Castor (D-Fla.) said.

“There are over 2,000 gigawatts of energy and storage waiting in line” to be plugged in, equivalent to about one billion homes at peak demand,” she said.

Utility-scale solar generation increased by 32 percent, and wind generation increased by 7.7 percent in the lower 48 states from 2023, it states.

After natural gas at 44 percent “of installed electric generation capacity,” coal contributed 14 percent, wind 12 percent, solar 9 percent, nuclear 8 percent, hydro 7 percent, oil 2 percent, battery storage 2 percent, and biomass/fuels 1 percent, FERC said.

“Behind-the-meter” small-scale solar installations of less than 1 megawatt (MW) not connected to the grid produced an additional 1,200 GW in 2024 compared with 2023, the 2024 market report said.

“Solar, wind, and battery storage are the cheapest and cleanest ways to add energy supply to the grid. Now they’re driving energy and they’re driving down energy costs,” Rep. Frank Pallone (D-N.J.) said.

Citing studies that estimate repealing the IRA “would cost us about 800,000 jobs and decrease our [Gross Domestic Product],” he added: “Repealing the Inflation Reduction Act would increase American families’ power bills. Republicans are talking about the importance of affordability, but their actions don’t match their words.”

Pallone queried the seven grid executives about whether they support cutting federal incentives for renewable energies. All said they support IRA but that deregulation and permitting reform are needed to ensure enough base load is being added to the mix.

Block Island Wind Farm wind turbines tower over the water off Block Island, R.I., in October 2016. (Don Emmert/AFP via Getty Images)

Block Island Wind Farm wind turbines tower over the water off Block Island, R.I., in October 2016. Don Emmert/AFP via Getty Images

Wind and Pipelines

Latta said grid operators “are also tasked with a difficult job of maintaining the reliability resource adequacy of states that implement restrictive policies designed to attack fossil resources.”

Because of the grid’s “interconnected nature,” he said, “the decisions of one state to drive out base-load power inherently impacts the reliability of neighboring states.”

PJM’s Asthana testified that his RTO, which serves 67 million ratepayers in 13 states and the District of Columbia, is often hamstrung by state “decarbonization policies that have forced generators … offline.”
ISO New England (ISONE) President and CEO Gordon Van Welie in his testimony said the five states that regulate electricity for his RTO’s 7.5 million ratepayers “continue to pursue a transition to non-carbon emitting resources, contracting for, or incentivizing, the development of large amounts of non-carbon emitting resources.”

These are primarily installed or planned wind and solar, he said, “and batteries to store surplus wind and solar energy and help dispense fossil fuels during periods when wind and solar cannot produce.”

Wind power makes sense to many New Englanders who are “long-challenged by our location at the end of the energy pipeline” and eager to “take advantage of the vast offshore wind potential that is right at our doorstep,” Van Welie said.

Trump’s executive order that suspends all “energy leasing in all areas within the Offshore Continental Shelf (OCS)” related to wind energy nationwide is hampering ISONE’s expansion plans, he said.

“The region has two offshore wind projects nearing their in-service dates,” Van Welie said. “However, for a variety of reasons, additional offshore wind development in New England is facing new challenges and could potentially be delayed.”

ISONE projects that its electricity consumption will increase by about 17 percent over the next decade, he said. Without the wind farms, “it remains to be seen if that projection will outrace new supports coming online,” he said.

As for New York, since that state adopted its Climate Leadership and Community Protection Act in 2019, “more than twice the capacity of generation has been deactivated than has been added to the system,” New York Independent System Operator (NYISO) President and CEO Richard Dewey said in his testimony.

The state has rejected at least four proposed natural gas pipeline projects since 2019, and, right now, he said, all new generators set to join NYISO’s grid are wind and solar.

But that trend could be changing.

In February, New York regulators approved Iroquois Pipeline Company’s proposal to build two compression stations on its 416-mile natural gas pipeline to move an extra 125 million cubic feet per day of natural gas from Ontario into New York City.

Earlier in March, Trump and New York Gov. Kathy Hochul discussed the potential revival of the proposed Constitution pipeline that would move up to 650 million cubic feet of Marcellus Shale natural gas from Pennsylvania to New York.

“Balancing the needs of grid reliability with the growing amount of weather-dependent generation and policy requirements for a just transition requires careful attention,” Dewey said.

Without it, he said, “the New York grid may be deficient in future years, such that the transmission system could not fully serve the demand.”

Original News Source Link – Epoch Times

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