FirstEnergy, an Ohio-based electricity utility, is currently dealing with the potential bankruptcy of a subsidiary that operates six coal plants and three nuclear plants. The company has requested that the U.S. Department of Energy essentially bail them out by using the agency’s authority to declare an emergency and order the plants to stay open.
FirstEnergy argues that the plants are necessary to protect the grid against outages that could be caused in the future by intermittent renewable power, for example poor solar generation on a cloudy day. Another fear is that natural gas plants do not generally have a significant amount of onsite storage, meaning that they could be rendered useless if a pipeline failed.
These arguments keep coming up as natural gas and renewables have rapidly grabbed market share in electricity generation over the past few years. Reliability arguments have repeatedly been rejected, though. As one example, on April 13, the American Petroleum Institute (“API”) sent a letter urging the White House not to intervene in the market to protect coal or nuclear interests.
API reminded the White House that natural gas generated 32% of America’s electricity last year. The American electricity grid remained reliable and resilient during that time. In fact, the grid operator that FirstEnergy sells its electricity to has not complained at all. Only companies losing market share seem to have these concerns about reliability. The environmental community is a bit more split. Some think it is important to save nuclear generators because they do not emit greenhouse gases while they operate, but natural gas has a tremendous record of reducing greenhouse gases without government intervention.
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