The Air Quality vs. Electricity Grid Reliability Debate

Posted on December 5th, 2011 by Shelley Welton

By Shelley Welton, Deputy Director

An ongoing battle over the potential tensions between air quality regulations and electric grid reliability has picked up steam recently, as two EPA air pollution regulations near the implementation phase: the cross-state air-pollution rule and the mercury and air toxics standard.
Congressional Republicans and many in the electricity industry are claiming that these rules, if implemented on their current timeline, might cause enough plant retirements or temporary plant outages that the power grid would crash, resulting in major blackouts. This suggestion has been vigorously opposed by Congressional Democrats, the Obama Administration, and environmentalists, who claim it is nothing more than a scare tactic being adopted to delay implementation of important new air quality regulations.
Most technical analyses favor the side of the Administration, though not unequivocally. The Department of Energy released a report  December 1st finding that even under “stringent assumptions,” adequate reserve margins for reliability “can be met in all regions,” although it noted that some local areas may need to address particular reliability concerns on a case-by-case basis. An analysis by M.J. Bradley and Associates also found that the air regulations caused no unmanageable reliability problems. The North American Electric Reliability Corporation (NERC), an industry self-regulatory body charged with developing reliability standards, is somewhat less optimistic; its recent 2011 reliability report suggests that utilities may need some additional time to comply with EPA regulations in order to address reliability concerns. (A previous post describes NERC’s 2010 conclusions). NERC’s analysis has drawn criticism for using unrealistic, overly harsh assumptions about how EPA regulations would be met. On the other hand, industry representatives have faulted the Department of Energy’s report for not examining the full range of reliability concerns.
Even NERC, however, recognizes one clear solution to help guard against any potential reliability problems: more aggressive implementation of energy efficiency and demand response policies. By reducing overall energy demand and peak energy demand in particular, these policies contribute enormously to ensuring that we have the supply margins necessary for a reliable grid. And they are some of the most cost-effective solutions out there—much cheaper than building new supply. They’re also a clean solution that avoids the current alleged (and unacceptable) tradeoff between reliable electricity and clean air. If we could get Congressional and regulatory attention more focused on energy efficiency, perhaps we could avoid the need for these heated debates on reliability altogether.

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