- ICF study finds changes to generation mix outpacing planning framework
- RTOs must include fuel security risks in long-term planning to assure grid resilience
- NEI asks for fuel security risks to be analyzed before nuclear plants can retire
While short-term prices continue to drive the premature retirement of nuclear power plants, the Federal Energy Regulatory Commission (FERC) must act to define resilience to fully understand whether the grid can withstand and recover from high consequence events, NEI told FERC this week. NEI also pressed for additional analysis of how nuclear retirements and the increased reliance on natural gas could impact grid resilience.
Last September, Energy Secretary Perry directed FERC to “take swift action” to address threats to the resiliency of the U.S. electric grid and issue a rule requiring organized markets to develop rules to compensate “fuel-secure” electricity generators for the resiliency they provide to the U.S. grid.
However, this January FERC declined to adopt the U.S. Department of Energy’s proposed rulemaking and instead directed the regional transmission organizations (RTOs) and independent system organizations (ISOs) that manage the electric grid to assess the resilience of the bulk power system and recommend additional actions to mitigate any identified issues. FERC gave the RTOs and ISOs 90 days to provide comments.
NEI’s May 9 comments to FERC note that the RTOs and ISOs now acknowledge they have not adequately considered fuel security risks in their long-term planning.
“Taken together, the RTO comments simply do not demonstrate that the grid is ready to handle the increasing reliance on gas-fired generation. They also fail to assure [FERC] that the loss of nuclear generation to early retirement will not increase the resilience risk of the rush to gas,” NEI Vice President, General Counsel and Secretary Ellen Ginsberg said in the comments.
NEI commissioned a recent study by consulting firm ICF, “The Impact of Fuel Supply Security on Grid Resilience,” which demonstrates that the grid’s move to natural gas has “outpaced the framework for analyzing the resilience implications of those changes,” Ginsberg said. The ICF report is included as an appendix to NEI’s comments.
To understand and mitigate resilience risks, NEI urges FERC to undertake three parallel actions:
- Define resilience to incorporate the importance of fuel security, especially on the need for diverse, long-term fuel-secure resources instead of a sole focus on short-term reliability metrics.
- Foster resilience by adopting planning standards and market policies such that generators that contribute to resilience are incentivized to participate in the market.
- Retain resilience by requiring that RTOs add a resilience analysis for planned generator retirements, and expand their authority to retain resilience-critical resources.
“The premature closure of resilient nuclear power plants is not a theoretical problem; the retirement process is already underway for several plants. That process does not—but must—analyze the risks of nuclear plant retirements from a fuel security perspective,” Ginsberg said.