No other electricity network on Earth provides as much power to as many people as reliably and affordably as the American grid does. But keeping the lights on is a highly complex undertaking.
Diversity is the key characteristic of the U.S. electric system. No single source provides a majority of the nation’s power, and each makes a distinct contribution to electric generation: coal (37 percent), natural gas (30 percent), nuclear (19 percent), hydropower (6.8 percent) and other renewables (5.4 percent).
The energy mix that sustains the grid is changing. Coal has been the leading fuel source for decades, but its use has fallen as natural gas use has increased. The use of renewable resources is also increasing, with wind and solar adding record levels of new capacity in 2012. The Energy Information Administration predicts these resources, combined with other renewables including hydropower, will reach the same market penetration as nuclear (16 percent) by 2040.
Maintaining the stability of the electric grid as coal and nuclear baseload plants come offline as a result of both market forces and regulatory constraints, while managing an increasingly variable energy mix, is the central challenge to ensuring electric reliability in the coming decades.
Bulk power system outages are rare and can be caused by many factors. In recent years, the electric industry has invested significant resources to address both physical threats and cybersecurity vulnerabilities. While some have sought to sensationalize the incident and the general issue of physical security, the fact that an April 2013 attack on a substation in California did not result in a power outage is a testament to the grid’s resiliency and the importance of building redundancy into the system.
This winter’s polar vortex resulted in at least 50,000 megawatts of power outages and should serve as a wake-up call to the importance of baseload capacity in maintaining grid reliability. During this weather event, nuclear plants operated at over 90 percent capacity, and one key system was forced to call upon 89 percent of the coal capacity slated for retirement next year. Our reliance on installed, dispatchable power generation during extreme weather demonstrates why diversity of baseload capacity and robust transmission and distribution systems are necessary to secure grid reliability.
The impact of new emissions regulations on power plants, as proposed by the Environmental Protection Agency, coupled with federal preferences and subsidies for power generation and use, must be taken into consideration. While the EPA has failed to analyze the cumulative impact of its rules, government estimates predict 10 percent to 20 percent of existing coal capacity could be retired by the middle of the next decade. And even the EPA concedes that at least one of its rules could result in “localized” reliability issues.
These should be recognized as red flags, but the federal government continues to give short shrift to the potential consequences of its own rules and regulations — thereby increasing the likelihood of impacts to the nation’s electric reliability.
Federal regulators and legislators must recognize the importance of maintaining and improving the grid’s reliability, affordability and environmental performance in balance. To that end, policymakers must understand the impact of government requirements on baseload capacity and the reliability of the grid. At a minimum, federal agencies must formally review and recognize the realistic and predictable consequences of their regulatory actions with the dual goal of prevention and mitigation.
Industry, regulators and other leaders need to more vigorously share their views on the challenges facing today’s grid — including physical security, cybersecurity and regulatory impacts. The burdens of maintaining the grid must be fairly borne, and powerful regulatory laws must be judiciously administered.
Sen. Lisa Murkowski of Alaska is the ranking Republican on the Senate Energy and Natural Resources Committee.