Last week, U.S. Energy Secretary Jennifer Granholm highlighted a key truth about transitioning to cleaner energy while securing America’s energy future: the two priorities are not a “binary choice”. At the Electric Power Supply Association (EPSA), which represents competitive power producers in the United States, we agree. With the right policy, energy security and a cleaner electricity world.com/growing-demand-for-gp-care-means-system-is-at-breaking-point/” title=”system” data-wpil-keyword-link=”linked”>system can advance simultaneously. But an absolutist stance in pursuing a priority that overlooks the reality of what the network needs to operate reliably now and in the future risks undermining what Americans, in a recent Morning Consult poll for EPSA, consider reliability and affordability as their two main energy policy priorities.
President Biden and his administration recognize the role that natural gas will play in easing Europe’s energy crisis. But national rhetoric and decisions over the past two years have too often ignored the realities of reliably operating the national grid and keeping electricity affordable for all Americans while meeting energy demand. world. We support the Federal Energy Administration and regulators, applying this “both/and” approach, not the “either/or” approach, when it comes to our domestic needs as well.
As the United States seeks to send natural gas resources overseas to support our European allies, it will be increasingly critical that our domestic policies allow for investment in the necessary infrastructure and supply. This urgent new need comes on top of existing pressures on the power grid from weather events, increased demand, and the need for firm, flexible resources such as natural gas to support intermittent renewables. Research shows that a more electrified economy will require additional electricity generation. For example, 50 to 90 megawatts (MW) of new natural gas generation will be needed to support decarbonization at the PJM interconnection alone through 2050.
EPSA has long called for approaches that enable competitive electricity providers to deliver the triple win: reliable, affordable and cleaner electricity. Competitive electricity suppliers in organized wholesale electricity markets have driven the adoption of cheaper and cleaner resources and technologies, while keeping the reliability of electricity production a priority. absolute. This includes building and investing in thousands of megawatts of renewable electricity and some of the largest battery storage projects in the world, while rapidly transitioning their fleet from coal to efficient natural gas generation.
Data surrounding competitive electricity markets indicates the ability to meet all priorities. Emissions have fallen faster in areas governed by competitive markets than in those still based on a vertically integrated monopoly model. Market forces have exerted downward pressure on prices over their more than 20 years of existence, with annual savings of $3 billion to $4 billion for consumers in PJM Interconnection, the largest market in the country’s competitive electricity. And everywhere, generators have provided a reliable supply of electricity, made more reliable by the ability of grid operators to plan and call on resources over a wide geographic area.
But to continue to build on this success, we must continue to move forward. Competitive electricity markets across the country, from the mid-Atlantic to California, are locked in a fierce debate over how best to shape market rules and policies. These pressures have threatened the ability of markets to send appropriate signals to inform electricity providers of investment decisions to be made regarding the withdrawal and construction of new resources, jeopardizing reliability, efficiency and affordability. . Meanwhile, the Federal Energy Regulatory Commission (FERC) has made several decisions that further undermine market integrity and the development of critical infrastructure needed by power producers.
FERC recently came under pressure to revise two policy statements regarding natural gas infrastructure following an outcry from multiple stakeholders, including industry and Congress. We are happy to see that the commission is opening the door to more comments and consideration. We hope to see a continued focus on reliability and affordability from energy regulators and administration.
With inflation, the recovery from the effects of the COVID-19 pandemic, and the stress of uncertainty overseas, Americans have plenty to worry about. It’s our job – and the job of political leaders – to make sure we deliver on all their priorities: reliable, affordable and cleaner power generation that keeps the lights on, homes warm in the winter and cool in the summer, and a booming economy.
Todd Snitchler is President and CEO of Power Supply Association. He is the former chairman of the Ohio Public Utilities Commission and a former member of the Ohio State Legislature.
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