The North American Electric Reliability Corporation (NERC) is a not‐for‐profit regulatory authority whose mission is to assure the reliability of North America's bulk power system.
Last year, the U.S. Environmental Protection Agency (EPA) issued its Clean Power Plan, a final rule limiting carbon dioxide emissions for existing electric generation facilities. States are expected to prepare individual or collaborative plans to comply with the regulation. Because reducing the carbon intensity of electric power generation is the goal, EPA expects that some plans will include a shift from coal-fired power plants to less carbon-intensive sources. As NERC wrote in its assessment:
The BPS is already undergoing a broad transformation with retirements of coal units and some nuclear units, and additions of resources fueled by natural gas, wind, and solar. Distributed generation, energy efficiency, and demand response are also changing the way in which system planners must account for resources. The CPP has the potential to hasten the transformation of the electric system started by market and political factors such as natural gas supply and pricing and federal and state policy decisions with respect to renewables and energy efficiency and other environmental regulations.But reliability is a key issue at stake in any shift in the portfolio of generating resources. The Clean Power Plan rule explicitly requires that states consider reliability as part of their plans.
NERC's assessment, Reliability Considerations for Clean Power Plan Development, presents its view of "aspects of plan design that need to be considered to reliably accommodate this broad transformation." NERC's ten key reliability considerations are:
- State coordination with system planning entities - planners and coordinators working together
- Essential reliability services - "In order to maintain an adequate level of reliability through this transition, generation resources need to provide sufficient voltage control, frequency support, and ramping capability — essential components to the reliable operation of the BPS. It is necessary for policy makers to recognize the need for these services by ensuring that interconnection requirements, market mechanisms, or other reliability requirements provide sufficient means of adapting the system to accommodate large amounts of variable and/or distributed energy resources (DERs)."
- Timing considerations for energy infrastructure development - "Retirements can happen quickly, but adequate replacement facilities must be in service prior to retirement. As natural gas‐fired generation replaces coal‐fired generation the requisite timeline for natural gas pipeline infrastructure becomes even more relevant."
- Electricity imports and exports - "If a state intends to use resources from nearby states as part of a compliance strategy, it is important to determine if the necessary transmission capability is available to reliably transport electricity from those resources."
- Change in generator cycling and operations - coal plants may serve more seasonal peak demands, so "states should take account of changes in maintenance requirements likely due to cycling and the risk of increased forced outages of these coal‐fired plants. Additionally, increased and sufficient coordination between gas and electric system operators becomes much more critical to ensure adequate amounts of fuel are available."
- Reserve margin assessment - "As more variable and energy ‐ limited resources are added, the system will likely require additional reserve capacity to maintain a similar level of reliability compared to a system with all conventional generation."
- Energy efficiency - "Given that EE can be used as a potential CPP compliance tool, it is important that states evaluate the realistic potential for EE to displace load and the likely duration of those impacts. Shorter term EE measures may serve as a potential bridge to meet CPP requirements."
- Emissions trading - "In general, emissions trading promotes additional reliability compliance options by effectively broadening the compliance region as well as the availability of allowances and credits. However, some resource options that might be assumed available through emissions trading may not be, due to another state’s plan. Because trading is optional, states should coordinate to ensure the most beneficial approach of trading is considered."
- Reliability safety valve - "States must understand how the Reliability Safety Valve works and its limits, recognizing that it cannot be used as a planning tool to meet CPP requirements."
- North American and European precedents - states should review carbon market precedents like RGGI and shifts in Canada and Europe toward renewable and distributed resources as case studies for potential strategies, lessons learned in implementation, and insights as they develop their plans.