Who Will Win the Fuel Fight?
When Peltier asked the panel about a proposed national renewable portfolio standard (RPS), Gallagher voiced approval for such a standard but added that there also needs to be a price for carbon.
Crane wants to see a federal RPS that’s "reasonable" and takes into consideration that the Southeast is at a great disadvantage. Earlier, Crane had observed that in the ’70s and ’80s, the U.S. developed mainly nuclear resources. In the ’90s it was gas plants. Today the policy focus is disproportionately on renewables. What’s needed instead, is a blended generation portfolio for the nation as a way to protect prices for consumers, he said.
Morris, who is not in favor of one standard for all states, offered the notion of different low-carbon resources, including nuclear, for different regions plus tradable renewable energy credits as a better answer.
Gallagher added that "the answer may not be here today, but we’ve got to work on the technologies that are available to make it so that we can burn the coal that we’ve discovered. You know, I started out in the nuclear business. I think it’s fantastic. It’s just going to take a little while [to change the minds of those who don’t know] how great nuclear can be."
In response to an audience question about the optimal percentage of renewables that the grid can accommodate, Litzinger said that it varied but was probably between 15% and 20%, because of the intermittency. Above that level, more fossil-fueled capacity would need to be added, and for any notable amount, "a lot of transmission needs to be built" (a point Morris seconded). Crane answered that it’s going to depend on the area of the country you’re in.
One particular audience question elicited a round of pointed answers. When asked about the government basing renewable policy on estimates from the Energy Information Administration (EIA) that assume a 40% capacity factor for wind, Morris jumped in to say that "The EIA has never been right with any number they’ve ever forecasted." It’s not, he clarified, that they’re dishonest, "but they’re wrong."
Litzinger added that the EIA has "favored the high end of capacity factors."
In Crane’s view, "consumers are being sold a bill of goods" on high capacity factors that may not be achievable.
Gallagher made the point crystal clear by saying, "All our wind developers would be jumping off the roof [in excitement if they got 40% capacity factors]."
One More Worry: NERC Standards Compliance
One audience question concerned an issue that all power generators across North America have to grapple with: North American Electric Reliability Corp. (NERC) reliability standards.
Gallagher noted that Sempra in the past three years has probably spent five times as much on NERC compliance as it did before the Critical Infrastructure Protection program became mandatory — even though the company was in compliance before.
Morris asked, "They’re creating something they think is well thought through, but does it add to the stability of the grid?" Though he believes "100%" in audits, "I thought it was a great idea, but it’s getting out of control," Morris said.
At Exelon, the NERC compliance group grew from 3 to 17 people. Even if the audit phase goes well, Crane observed, there can be problems with interpretation.
Litzinger, too, identified NERC compliance as a cost-driver and added that it’s unclear if the standards have added to grid reliability. Yet, he noted that, given what’s happened in the financial sector, regulatory compliance is likely going to get stronger.
—Gail Reitenbach is POWER's managing editor.
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