Heath Knakmuhs Heath Knakmuhs
Vice President and Policy Counsel, Global Energy Institute, U.S. Chamber of Commerce

Published

May 25, 2022

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The U.S. Chamber strongly supports the transition of our electric generation fleet and the overall economy to cleaner, less carbon-intensive energy sources. Recognizing that pretty much everything we make, sell, or do depends upon a reliable and affordable supply of electricity, we have also been clear that this transition must occur consistent with the pace of innovation so that American competitiveness can continue to flourish during this necessary evolution.  Unfortunately, a recent analysis by the official watchdog of America’s electric grid indicates that the electric power transition may be getting out over its metaphorical skis.

Last week the North American Electric Reliability Corporation (NERC) released its 2022 Summer Reliability Assessment, which was well timed as some of the highest daily temperatures of 2022 welcomed the summer cooling season. In a startling revelation, significant portions of the country are now either at a “high” or “elevated” risk of electric power shortfalls during either above-normal or even normal peak summer electricity demand, as demonstrated below in NERC’s graphic. The Federal Energy Regulatory Commission (FERC) similarly included this noteworthy graphic in the presentation of its own staff’s 2022 summer assessment offered during its May open meeting.

NERC Summer Risk Assessment
NERC Summer Risk Assessment

While we certainly hope for the best this summer, the stunning proliferation of orange and red across NERC’s summer risk assessment map is undeniably cause for concern. John Moura, NERC’s Director of Reliability Assessment and Performance Analysis, summed up their conclusions rather succinctly: “It’s a sobering report.” Moura went on to say, “It’s clear the risks are spreading…and the pace of our grid transformation is a bit out of sync with the underlying realities and the physics of the system.”

How did we get here and, in the short to medium term, how do we move those large orange and red areas back into the grey?  The answers and solutions are multi-faceted, but if the map above does not constitute an abrupt wakeup call on reliability, as was noted by FERC Commissioner Christie after seeing this report, the next widespread power outage during a hot summer day certainly will do so.

The nation’s investor-owned utilities have a strong commitment to clean electricity. In fact, they are committed to making our electricity as clean as they can, as fast as they can do it.  However, the electric utility sector does not yet have the tools to reliably operate a 100% clean energy grid. That is why the U.S. Chamber has prioritized technology and innovation. For example, we strongly advocated for the passage into law and full funding of the Energy Act of 2020, which is designed to stimulate the development and commercialization of the next-generation nuclear, carbon and direct air capture, energy storage, hydrogen, geothermal, energy efficiency, and other renewable technologies needed to fully decarbonize the electricity sector.  Rome was not built in a day, and neither can be the clean, reliable, and affordable electricity grid of tomorrow.

In the meantime, the grid needs as many electrons from as many sources as it can muster, especially with post-pandemic power demand set to grow this summer. Unfortunately, activist interest groups have successfully slowed deployment of a broad range of resources needed to keep the lights on – from the plentiful domestic natural gas resources that have been the backbone of electric sector carbon emission reductions to new transmission lines that are essential to facilitate the clean energy transition. These activists reliably contest every new natural gas pipeline proposal, even though natural gas is critical to balancing the intermittent output of solar and wind resources and such infrastructure could one day become essential conduits for the green hydrogen of tomorrow.        

If we are met with power outages this summer, it will be the electric companies blamed for the inconvenience. It’s even possible that utilities’ grid transition efforts themselves could get blamed – an unfortunate outcome that could undermine public support for clean energy deployment. Power companies are stuck in the middle, trying their best to facilitate a clean energy transition while still having to ensure that the laws of physics don’t undermine the reliable electric service we all take for granted. Of course, activists that fight needed energy infrastructure bear no responsibility for keeping the lights on, thereby escaping any blame if outages occur.     

California Governor Gavin Newsom summed this ongoing conflict up best this past week in response to activist uproar regarding his proposed state budget’s inclusion of $5.2 billion for a “reliability reserve” that includes support for fossil-fueled resources such as diesel and natural gas, along with additional funding for investments in carbon capture & storage.  Quite bluntly, the Governor responded by stating “[w]e don't deal in ideology, we deal in reality.” The Governor’s point is well taken. 

NERC’s job, in partnership with FERC, is to ensure the reliability of the electric grid upon which we all depend 24/7. Regardless of any advocate’s preferred future energy mix, NERC must work within the megawatts, capacity factors, and interchange capabilities available today to ensure that homes and businesses stay energized regardless of the situation. Thus NERC, and the electric grid, are forced to work within reality. NERC’s summer assessment makes it clear that the energy transition being pushed ever faster by activists may be getting ahead of the technologies we have today to keep the grid reliable. Only by respecting the realities of today will we be able to maintain the public support necessary to build the clean energy grid of the future. This should be a principle upon which we can all agree.

About the authors

Heath Knakmuhs

Heath Knakmuhs

Vice President and Policy Counsel, Global Energy Institute, U.S. Chamber of Commerce

Knakmuhs studies, develops, and communicates strategic energy policies and initiatives with a focus on the electric power sector. He also examines the impact of regulatory action, market-based factors, and emerging threats on the American electric grid.

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