This is the second entry in a two-part blog series. In the first part, we discussed reliability concerns surrounding fossil-fuel and the reliability benefits of renewable energy and battery storage. In this part, we turn our focus to climate change impacts and federal greenhouse gas policy.
Hot & Cold: How Reliable are our Energy Sources through the seasons?
The reliability failures South Carolina’s electric grid has experienced recently due to extreme weather and overreliance on fossil fuels could just be the tip of the iceberg. If the utilities get their way and double-down on new gas-fired generating capacity, we will be even more susceptible to rolling blackouts when equipment freezes and gas supplies are cut off, like in Winter Storm Elliott. And the more fossil fuels we burn, the more we will accelerate the climatic changes driving extreme weather events that disrupt energy supplies.
In addition to extreme cold, extreme heat also hurts the reliability of fossil-fuel and nuclear power plants, which typically depend on water for cooling, although some gas-fired plants are air-cooled, mainly in dry climates. When the water used for cooling gets too hot, plants can no longer run at full capacity during times of summer peak demand for electricity.
Despite these clear reliability constraints, South Carolina utilities’ resource plans treat gas-fired generation as being essentially available on-demand, while discounting the assumed ability of solar to provide generating capacity during peak demand to zero. By putting their thumbs on the scale in their resource optimization modeling assumptions, utilities put customers at risk of suffering from higher rates and worse reliability.
Rising oceanic temperatures will also likely bring more hurricanes our way in the years ahead, which can cause all kinds of damage to energy infrastructure. In its 2023 report by top climate experts, the Intergovernmental Panel on Climate Change warned:
“Widespread and rapid changes in the atmosphere, ocean, cryosphere, and biosphere have occurred. Human-caused climate change is already affecting many weather and climate extremes in every region across the globe. This has led to widespread adverse impacts and related losses and damages to nature and people… Vulnerable communities who have historically contributed the least to current climate change are disproportionately affected.”
The Transition to Renewables is Becoming More Accessible
Recent federal climate policies have further reduced the cost of renewable energy and increased the risks associated with building new gas-fired power plants. The 2022 Inflation Reduction Act provides for credits of up to 40% for renewable energy and numerous grants to help communities advance an equitable clean-energy transition. Last December, the Environmental Protection Agency’s (EPA’s) released a final rule that sharply restricts methane emissions from gas wells and pipelines.vii And in May of this year, EPA released a final rule that sets carbon pollution standards for power plants.viii In addition, the Federal Energy Regulatory Commission’s (FERC)’s recently released Order 1920 will require improvements in regional transmission planning that are expected to enhance grid reliability and facilitate the integration of more renewable energy.
Thinking Smarter About Where We Invest Cost
The carbon rule would restrict any new combined-cycle gas plants – like the massive, multibillion-dollar plant Dominion and Santee Cooper have proposed building in Canadys – to running only 40% of the time, which would significantly reduce their already marginal cost-effectiveness. With new combined-cycle gas plants being considered, ratepayers run the risk of paying the utilities for stranded assets with little or nothing to show for it. Considering that we’re still paying the bill for the $9 billion failed nuclear expansion at V.C. Summer, we should be very wary of big, risky projects that could drive up utility bills for decades.
Even when gas plants do run, customers bear all the risk associated with price increases in the extremely volatile gas market that can experience abrupt price spikes due to geopolitical events like the war in Ukraine. In recent years, the rising cost of gas was the biggest driver of higher utility rates in the Carolinas.x Utilities in some states must share the cost risks associated with fuel price volatility, but we would need a change in state law to implement a pricing mechanism for that purpose in South Carolina.
Instead of betting the farm on risky new combined-cycle gas plants and pipelines, South Carolina utilities should be investing in a reliable, no-regrets resource strategy that prioritizes energy efficiency, renewable energy, and battery storage.