Lessons of Winter
This long, cold winter has uncovered a few inconvenient truths about our power supply and its long-term prospects.
The prevailing opinion in recent years, reflected in state and federal energy policy—or lack thereof—is that natural gas is plentiful and cheap, and will remain so for the foreseeable future. Because of this estimation, encouraged by a fracking and drilling boom in places like North Dakota and Texas, there hasn’t been much urgency in promoting alternatives to fossil fuels.
Until now. At the end (we hope) of a bitterly cold winter, the coldest in recent memory, the flaws of this plan are becoming clearer. As temperatures dropped, Americans cranked up their thermostats. The sudden increase in demand caused electricity costs to spike beyond belief, at times as high as $475 per MWh in places like Boston, more than 10 times the usual rate. Perennially low natural gas prices couldn’t keep up with the high demand, and rose to their highest levels since 2008.
This scenario, causing sticker shock to homeowners paying utility bills across the country, underscored the need for reliable, baseload energy sources to make up the difference during peak demand seasons and times. Natural gas as a sole baseload source of energy, supplemented by solar and wind as alternative sources, is not a reliable enough mix of energy sources to sustain the country during extreme weather conditions. There must be a solid range of baseload energy sources, like biomass and nuclear power, available to generate energy during a polar vortex or an especially brutal August.
A recent Greenwire story highlighted the impacts of a natural gas-centric energy policy on the nuclear power industry. The focus on supporting the use of inexpensive natural gas has had the unintended consequence of endangering the nuclear industry because, as one nuclear expert put it, the industry is “waning without a price on carbon in markets that don’t recognize the value of carbon-free power.”
Just like nuclear power, biomass is challenged because natural gas is seen as the fuel of choice. Utilities’ substitution of natural gas for coal could prove to be a penny-wise, pound-foolish strategy, whereas investing in a power source like wood is the wiser long-term choice. Wood is a stable, predictable commodity that can be relied upon with some certainty.
While unpleasant, Old Man Winter may have taught us something this year: our energy policy needs to put much more of a premium on reliable, baseload power.
Author: Bob Cleaves
President and CEO, Biomass Power Association