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The Party’s Over?

Jun 29, 2023

You may remember Willie Nelson’s 1967 hit song, The Party’s Over. Like most country songs, it is about a broken relationship – this one with his wife. He sings about a party where everyone is dancing and having fun, and he is crying, but that doesn’t keep her love for him from dying. His wife delivers him a final message, which Willie recounts in the closing lines of the song:  

Sweetheart the party’s over
Turn out the lights
The party’s over
They say that all
Good things must end
Call it a night
The party’s over
And tomorrow starts
The same old thing again

What does Willie Nelson have to do with electricity? Well, there are some similarities. Everyone has been having a big time, partying hard for decades, enjoying reliable and affordable electric service. Everyone, like Willie, has taken that relationship for granted. It was assumed that our friend – reliable, cheap electricity – would be with us forever, and we could just keep partying like there was no tomorrow.

The party’s not quite over yet, and we aren’t ready to turn the lights out, but the outlook is not particularly positive.

Earlier this year, the PJM Interconnection, an Independent System Operator serving 13 states and approximately 65 million people in the northeast, released a report stating that fossil fuel electric generation plants are being shut down faster than new replacement wind and solar are being built. Plant closings are a result of policies of the EPA and some states.

About half the retired fossil fuel capacity will be replaced by 21,000 megawatts (MW) of wind, solar and batteries. However, unaccounted for is the substantial electric load growth due to increasing electrification of the economy and electric vehicles. The report concludes that, without immediate actions, PJM will suffer “energy imbalances’ by 2030, if not before. That means –  to those not accustomed to electric utility speak – there will be rolling blackouts.

In May, four Federal Energy Regulatory Commissioners testified before the U.S. Senate Energy and Natural Resources Committee that the U.S. electric grid is facing unprecedented reliability challenges. Mark Christie, a Republican Commissioner, stated: “We are retiring dispatchable generating resources at a pace and in an amount that is far too fast and far too great and is threatening our ability to keep the lights on.” Democratic Commissioners were more reserved, but both testified the electric grid was at risk and all generation resources, fossil fuel and renewables, were needed to maintain electric reliability for the foreseeable future.

The National Electric Reliability Corporation (NERC), the organization of electric utilities responsible for electric reliability in the country, released its 2023 Summer Assessment in May which forecasts that two-thirds of the U.S., including almost everyone west of the Mississippi River, could experience power shortages on very hot days with little wind.

Texas, in particular, is called out in the report. Despite adding considerable solar generation to the state’s portfolio, electric demand has grown even faster with an influx of people moving into Texas. NERC forecasts a 19% chance of a grid emergency after 8 PM on a hot summer night when the sun is not shining.

One would think that with the reports of “energy imbalances, grid emergencies, and electric capacity shortages, the Biden Administration and EPA would make plans to avoid a national disaster. After all, these are serious reports about serious issues that involve the very essence of our lives. 

On the contrary, the EPA recently finalized its Good Neighbor Policy that requires a reduction in nitrous oxide emissions from fossil fuel-fired plants over 22 states this summer. The EPA states the Good Neighbor Policy won’t jeopardize grid reliability, but at the same time, states regulatory waivers may be needed in the event of a power crunch. Party on!

Additionally, the EPA revised the Clean Air Act requiring coal and most natural gas plants to add Carbon Capture and Sequestration (CCS) systems, or to burn hydrogen, by 2030. The CCS systems have not been proven anywhere near the size and scale required for the task ahead. Burning hydrogen in electric generation plants may work; however, hydrogen production is very expensive, and it is difficult to transport and handle. So many problems remain in technological development and the supply chain for such major systems in just six and a half years. Party harder!

Rolling blackouts are becoming more common and more difficulties are predicted in the not-too-distant future, and the Federal Government continues to tighten the noose. It may not quite be time to cue up ole Willie, but he is warming up his vocal cords – Sweetheart, the party’s over, turn out the lights.

I hope you have a great month.                      

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