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NERC WARNS ON RELIABILITY: EPA’s new Good Neighbor Plan could hurt reliability of the bulk power system as operators limit generation from coal and natural gas plants in order to comply with the rule’s tighter requirements, the North American Electric Reliability Corporation said in its 2023 Summer Reliability Assessment.
The analysis from NERC complements its multiple warnings over the last year about the reliability challenges associated with a changing grid, especially the negative consequences associated with lower availability of traditional generation sources that are retiring due to age, to avoid costly compliance measures, and to meet utilities’ decarbonization targets.
Limited generation tied to Good Neighbor is one among a handful of reliability issues regional grids are expected to face this summer, according to NERC’s newest analysis out today, which concluded that a larger share of the country this year than last is at elevated risk of having insufficient reserves in above-normal demand conditions.
NERC’s risk assessment: NERC said PJM, New York, and most of the Southeast have sufficient resources to manage normal summer peak demand and are at low risk of seeing shortfalls related to extreme demand or generation outages.
Otherwise, some two-thirds of the rest of the country, including New England, Texas, and the entire West and Midwest face risks of electricity supply shortfalls when extreme weather drives demand above normal levels.
The fuel supply outlook has improved in the last year but some regions could still face challenges acquiring coal and natural gas, NERC said.
Additions of renewable wind and solar will help meet demand but those regions could be challenged if high demand coincides with low winds.
The new factor this year: EPA’s Good Neighbor Plan, which it finalized in March.
The rule cracks down on pollutants that contribute to smog in downwind states and affects power plants operating in more than two dozen states.
Coal and gas plants in states subject to the Good Neighbor plan “will likely meet tighter emissions restrictions primarily by limiting hours of operation” this year “rather than through adding emissions control equipment,” which could diminish reliability, NERC said, citing indications from generators in Texas that they will run out of emissions allowances for compliance by July.
Even if generators sought to add emissions control equipment to comply with the rule, reliability corporations in summer-peaking areas “typically are not able to authorize extended outages to upgrade systems during this summer season in order to ensure sufficient resources for high demand,” NERC said.
Excluded: The effects of other EPA rules to electric reliability, including the new greenhouse gas proposal.
No longer in the red: MISO. The Midcontinent Independent System Operator’s outlook has improved compared to last year, when NERC concluded it was at a high risk of facing insufficient operating reserves even in normal demand conditions. MISO was the only regional entity deemed to be at high-risk.
MISO remains at an elevated risk level but the risk of being unable to meet reserve requirements at peak demand this summer in MISO is “lower than in 2022 due to additional firm import commitments and lower peak demand forecast,” NERC said.
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FEDERAL COURT UPHOLDS FERC’S APPROVAL OF ALASKA LNG: The D.C. Circuit Court of Appeals upheld FERC’s approval of the Alaska LNG export terminal in 2020 against a challenge from environmental groups.
The Center for Biological Diversity and the Sierra Club argued FERC failed to comply with the National Environmental Policy Act and its implementing regulations in approving the project, including that the commission inadequately considered alternatives to the proposed action.
A panel of the court dismissed the groups’ petition in part and rejected its other arguments on the merits in a ruling yesterday, saying it “decline[s] to adopt CBD’s aggressive reading” of NEPA implementing regulations and which “conflicts with our precedent and would require the Commission to consider the indirect effects of actions beyond its delegated authority.”
The court’s ruling comes after the Department of Energy issued an order last month reaffirming a Trump-era authorization to allow the export of 2.55 billion cubic feet per day from the Alaska LNG in south central Alaska.
The two environmental petitioners have challenged the project in multiple venues, first requesting a rehearing before the DOE in 2020 that led the department to prepare a supplemental environmental impact statement and delaying the project.
They filed another request for rehearing on Monday, asking that DOE withdraw its order pending further inquiry into the impact of proposed exports.
HOUSE ENERGY SUBCOMMITTEE ADVANCES RUSSIAN URANIUM BAN: Energy and Commerce’s Energy, Climate, and Grid Security Subcommittee voted yesterday to advance the Prohibiting Russian Uranium Imports Act, which would prohibit uranium imports 90 days after passage while granting the Department of Energy a “national interest” waiver authority through 2027.
Washington Rep. Kim Schrier was the subcommittee’s lone Democrat to join all 17 present Republicans in voting in favor of the bill.
Congress and President Biden moved swiftly to ban imports of Russian fossil fuels in retaliation after the war in Ukraine began, but uranium was excluded.
Russia accounted for 14% of the United States’ foreign total uranium purchases in 2021, according to the Energy Information Administration. Only Kazakhstan and Canada sold the U.S. more uranium.
Congress debated advancing a uranium ban last year. Administration officials, including Assistant Secretary of Energy Kathryn Huff, have said Russia is no longer a trustworthy supplier of the fuel, but there has been some concern about whether the nuclear sector could afford a ban.
Secretary Jennifer Granholm said last week she is “worried about the gap” that would be created by a ban.
E&C Ranking Member Frank Pallone, who opposed the bill yesterday, said Congress should not pass a ban without addressing at the same time “the underlying lack of domestic nuclear fuel cycle infrastructure.”
Gas stoves bill advances, too: The subcommittee also approved a bill that would prohibit the Department of Energy from finalizing its rulemaking tightening efficiency standards for both electric and gas cooking tops.
Schrier, as well as Democratic Reps. Lizzie Fletcher and Marc Veasy of Texas, joined Republicans to advance the Save Our Gas Stoves Act.
MANCHIN YANKS DOE NOMINEE OVER GAS STOVE RULES: Sen. Joe Manchin abruptly canceled a planned Senate Environment and Natural Resources Committee vote today to advance the nomination of Jeff Marootian to lead DOE’s Office of Energy Efficiency and Renewable Energy, citing his support for the agency’s new proposed appliance efficiency standards.
“While I supported Mr. Marootian’s nomination in December, since then the office he’s been nominated to lead has proposed stove efficiency rules that I’ve raised concerns about,” Manchin told the Washington Examiner in a statement.
The panel had voted to approve Maootian just months earlier, in November, but after his nomination stalled at the end of the session Biden was forced to re-nominate him to the role, thus subjecting him to another committee vote.
What’s changed: Since then, DOE has introduced a number of new proposed rulemakings aimed at cracking down on emissions from household appliances, including gas stoves. The proposed rules would make at least half of U.S. models ineligible for repurchase if they were to come into force today. They have also sparked intense opposition from Republicans, and from Manchin, who view the actions as government overreach—and Marootian would be serving in a role that allows him broad responsibility to regulate these appliances.
“While I appreciate that these rules would only apply to new stoves, my view is that it’s part of a broader, Administration-wide effort to eliminate fossil fuels,” Manchin told the Examiner. “For that reason, I’m not comfortable moving forward with Mr. Marootian at this time.”
BIDEN TO LEAN ON GREEN POLICIES IN PITCH TO YOUNGER VOTERS: President Joe Biden is pitching his climate policy to younger voters as he seeks another four years in the White House so he can “finish the job,” the Washington Examiner’s Naomi Lim reports.
The Biden campaign is emphasizing Republicans’ opposition to the Inflation Reduction Act and its clean-energy provisions as dangerously ignoring climate change.
“Not one Republican in either chamber voted for this historic investment to curb the devastating effects of climate change, and the extremist MAGA Republicans running for president would set our country back decades in what is an existential situation for the planet,” said campaign spokesman Kevin Munoz.
NORWAY’S $1.4 TRILLION OIL FUND TO STEP UP ESG PROPOSALS: Norway’s $1.4 trillion oil fund will step up its use of shareholder proposals to send messages on ESG topics to U.S companies, its chief corporate governance officer, Carine Smith Ihenacho, told the Financial Times, citing what the sovereign wealth fund deemed a successful trial conducted with four U.S. companies at annual meetings this year.
Ihenacho said that two of the companies, the Packaging Corporation of America and Marathon Petroleum, gave commitments on climate, while two others (NewMarket and Westlake) voted on the oil fund’s motion.
“We would like to do more on climate but also consider other areas across the ESG spectrum,” Ihenacho told the Financial Times. “It will most likely be in the US.”
Why it matters: Norway’s massive sovereign wealth fund is the world’s largest stock market investor, owning roughly 1.5% of every company listed globally. In recent years it has sought to take a more active stance on promoting sustainable development, and has vowed to step up its demands for companies to set certain climate targets to ensure they reach net zero carbon emissions by 2050.
WORLD ‘MORE LIKELY THAN NOT’ TO BREACH 1.5C LIMIT IN NEXT FIVE YEARS: There is now a 66% chance that the world’s temperatures will temporarily surpass a critical 1.5 degrees Celsius global warming threshold within the next five years, according to a new report from the World Meteorological Organization, marking the first time scientists concluded that it is more likely than not that temperatures will breach the critical threshold.
The expected surge in temperatures is due to a combination of heat-trapping greenhouse gasses and a looming El Niño weather pattern, which causes warmer water in the eastern Pacific. These conditions are expected to begin within the next few months. “We really are now within reach of a temporary exceedance of 1.5C for the annual mean, and it’s the first time in human history that we’ve been that close,” Adam Scaife, the head of long-range forecasting for the UK’s Met Office, which helped produce the WMO report, told reporters earlier today.
These factors also mean there is a 98% likelihood that at least one of the next five years will be the warmest year ever recorded for the planet. The chance of the five-year mean for 2023-2027 being higher than the last five years is also 98%, scientists said.
Though the warming is temporary, scientists warned that is still an ominous sign that shows just how close the world is to permanently crossing the 1.5C warming threshold.
Even temporarily reaching 1.5C is “an indication that as we start having these years with 1.5C happening more and more often, than we are getting closer to having the actual long-term climate be on that threshold,” said Met Office official Leon Hermanson.
EU UNLIKELY TO BAN RUSSIAN PIPED GAS IN NEW SANCTIONS PACKAGE: The European Union is unlikely to pursue any ban on Russian piped gas in its eleventh Russian sanctions package, and it is unclear if such an effort will gain traction at the G-7 summit this weekend due to a lack of support from European members.
There is no consensus in the bloc for such a measure, Politico EU reports: “From what I hear, it is very unlikely this will pass,” said one diplomat from an EU country that had its Russian gas cut off last year. “There is too much resistance from the countries dependent on the remaining gas,” the diplomat added.
The Financial Times had reported earlier this week that the G-7 is expected to finalize the ban on Russian piped gas this weekend, citing a copy of draft conclusions. But such a ban would require support of G-7 member countries Germany and Italy, who remain deeply opposed to this effort, Politico reports, even after Russia began throttling its gas deliveries to the bloc last summer. This could add a wrench in leaders’ plans for the summit this weekend.
Aura Sabadus, a senior ICIS analyst, told Politico that any G-7 attempt is designed to “curb attempts to resurrect Nord Stream,” and to tamp down voices in Germany and other European countries where there “may be companies and consumers who may be interested in resuming imports” of Russian piped gas, even if it falls short of formal adoption. Others noted it could add pressure for the bloc to include pipelines in an eventual 12th round of sanctions. Read more on the effort here.
API POLICY CHIEF LEAVES TO JOIN CLEAN POWER GROUP: Frank Macchiarola will leave the American Petroleum Institute to become chief policy officer at the American Clean Power Association, the group announced this morning.
Macchiarola will lead a policy team “working to develop the regulatory and legislative framework necessary to efficiently deploy the full suite of advanced clean energy technologies,” ACP said in an announcement this morning.
Macchiarola has been the public policy head at API, serving as senior vice president of policy, economics and regulatory affairs after joining the leading oil and gas industry group in 2016.
He starts in his new role at ACP on June 20.
REPUBLICAN SENATORS WARN FED ON CLIMATE POLICY: GOP senators issued a warning to Federal Reserve Chairman Jerome Powell to steer clear of climate policy.
The eight senators, led by Alaska’s Dan Sullivan, objected to the Fed’s efforts to include climate considerations in stress-testing banks, as well as to events and publications on climate change put out by the central bank system’s regional banks – calling some of the products “blatant propaganda.”
The letter concludes with a warning that a failure to curb such activities “will not end well for independent monetary policy.”
“When federal regulators become political and start prioritizing activist-driven ESG principles rather than doing the jobs federal law requires them to do, areas of concern quickly become crises, and the American people are left to face the consequences,” Sullivan said in a statement.
This debate is taking place within the Fed, too: Last week, we noted in the newsletter that Fed Governor Christopher Waller laid out the argument that climate change does not pose a risk to the financial system and thus should not be included in the central bank’s stress testing and supervision.
The Rundown
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Politico EU Scouring the seas for Putin’s pipeline saboteurs
CNBC As the wind power industry looks to super-sized turbines, disruptors are betting on radical designs
