As Money-Losing Coal Plants Eye a Bailout, Solar Forges Ahead

Late last week, news broke that the Trump administration was planning to order grid operators—via “emergency measures” under the auspices of the U.S. Department of Energy—to buy electricity from struggling coal and nuclear power plants in the name of national security and reliability. Apart from those who would directly benefit from such unprecedented federal intervention into the nation’s electricity markets, the industry’s reaction was swift and negative in opposition.

There is no emergency or national security threat emerging from the energy transition that justifies this measure. Rather, an alternative narrative is emerging that should be considered by the Administration as part of its broader efforts to bolster the economy: the energy transition should not be viewed as a threat to the few, but rather a massive opportunity for a wide swath of the economy. Investors from Berkshire Hathaway to Softbank & Saudi Arabia to the current U.S. Department of Energy clearly see the opportunity and job creation benefits that the energy transition presents. The results of the Xcel Colorado all-source process firmly establish that ratepayers can save millions while converting the fleet from coal to a mix of solar, wind, natural gas and storage. Like Thomas Edison’s radical light bulb, utility-scale renewable energy represents the evolution of the electric system. The Dow Jones Industrial Average has succeeded through placing bets not on the technologies of the past but on disruption and innovation. The transition and economy are thus intertwined.

The sector’s galvanization against the move has made from an impressive (and surprising) list of united bedfellows: the American Petroleum Institute, Advanced Energy Economy, American Council on Renewable Energy, American Wind Energy Association, Energy Storage Association, Natural Gas Supply Association and Solar Energy Industries Association, among others.

“A policy to spend billions of dollars keeping uneconomic power plants afloat, while trying to put clean and affordable solar on the sidelines, is not a recipe for economic success,” noted Christopher Mansour, vice president of federal affairs for Solar Energy Industries Association. “Energy experts across a range of industries, within the federal government and in academia have agreed that this sort of effort will create a bloated power sector deploying outmoded technologies. We urge policymakers to again block this ill-advised effort to keep plants running that most electric utilities have already decided to abandon, and for good reason.”

The idea that emergency measures in the form of billions of dollars in subsidy borne ultimately by taxpayers in their utility bills over the next two years are needed to prop up grid reliability and security are, not surprisingly, just a façade to save a failing corner of the market. Study after study—from CAISO to PJM to ERCOT—find no risk to grid reliability arising from coal’s demise at the hands of natural gas, energy efficiency and flat demand, and the rise of solar and wind renewable energy.

While such studies are important, we can also look to real-world examples for confirmation. In the U.S., those states and regions with the highest percentages of renewable energy have maintained their grid reliability, even as the generation mix has evolved significantly. Meanwhile, in Europe countries such as Denmark, Germany and others—whose grid mixes include far more renewables than the U.S.—boast significantly better grid reliability. It’s almost as if reliability has nothing to do with on-site fuel supplies, but rather sustained investment in flexible, resilient transmission and distribution systems.

The Trump administration’s latest attack on clean energy is unlikely to have long term ramifications. It could, however, have short-term impacts that will ripple throughout the industry. Customers will bear billions of dollars of additional costs for electricity supply to support uneconomic coal- and nuclear-fired generation. Other generators could find themselves less economic and thus struggling to avoid bankruptcy in the face of artificially distorted market economics. And plans to replace retiring coal-fired generation with cost-competitive, cleaner solar, wind, natural gas and other resources could be delayed.

We here at Coronal Energy remain undeterred in our own mission to seize the opportunity that the energy transition presents: Powering a Cleaner Grid. We’ve been around solar long enough to see it weather proverbial storms and other market interventions, from the planned phase out of the Investment Tax Credit to the current administration’s imposition of tariffs on imported solar modules.

If solar has shown us anything in recent years, it is its ability to demonstrate a different kind of resilience: a continual evolution and forward march to become ever more cost competitive; to supply ever more reliable, clean generation to the grid mix; to pair with other technologies such as energy storage to expand its capabilities and grid value; and to be a central component of the largest companies’ core economic strategies. That’s the long-term trajectory. In the short term, we remain united with our colleagues across the industry to oppose the administration’s current harmful, unnecessary actions.

EDITOR’S NOTE: This guest blog was written by ACORE Member Coronal Energy, and originally appeared on the Coronal Energy Blog