Changing Planet

Regional Grid Operators Weigh in on Resilience

Regional grid operators filed comments on efforts to enhance the resilience of the bulk power system in a proceeding initiated by the Federal Energy Regulatory Commission (FERC) after rejecting a Notice of Proposed Rulemaking by U.S. Department of Energy (DOE) Secretary Rick Perry to subsidize coal and nuclear power plants. The comments by the nation’s federally overseen regional transmission organizations and independent system operators (ISOs) came in response to two dozen questions FERC asked about resilience.

The message of operators to FERC: allow them time to develop additional resilience measures and respect their existing effortsaimed at ensuring that grids can cope with man-made and natural disasters that pose a risk of electricity service disruption. None of the operators suggested that resilience requires preservation of uneconomical power plants. All appeared to be open to, in the words of the New York ISO, “additional dialogue regarding concepts for market-based resilience services and practices.”

Nevertheless, the PJM Interconnection filing departed from the other operator filings. In essence, PJM wants FERC to direct operators to update market compensation for power plants to reflect resilience attributes. The request comes amid concerns that PJM’s resilience filing and ongoing price reforms could basically have the same effect as the DOE subsidy proposal rejected by FERC in January—a proposal that would have benefited coal and nuclear generators.

Those concerns were echoed in a “joint statement on power market principles,” released last week by U.S. public power and rural electric co-ops, state utility advocates, wind and solar energy groups, the Natural Resources Defense Council and the American Council on Renewable Energy. The group asked FERC to apply technology-neutral and market-based solutions to the resilience docket.

The Perry proposal and the FERC proceeding it inspired are likely to lead to some kind of change. Last week at CERAWeek in Houston, FERC Chairman Kevin McIntyre said the lack of compensation to power plants for resilience contributions would be of concern to FERC and a particularly complicated element of the proceeding. He also said that “only hypothetically is nothing an option. I will be very surprised if we go through all that process and take no action.”

At the heart of that action could be how FERC defines resilience. In its filing, the California ISO questioned FERC’s working definition of resilience. It wrote that FERC’s reliance order “does not address any potential overlap between resilience and reliability, clearly articulate the differences between the two, state why a new, wholly separate concept is needed, or indicate what specific requirements a resilient system must meet.”

Two of my colleagues at Duke University’s Nicholas Institute for Environmental Policy Solutions made a similar point last month, noting that whether resilience is “a stand-alone concept or just a component of the well-recognized concept of reliability” is a “foundational question”—one that spells the difference between new market and regulatory responses or tweaks to existing reliability mechanisms. They conclude that “A well-functioning market that clearly defines and values the attributes needed for grid reliability and resilience—in a fuel-neutral, technology-neutral fashion—will comply with the law and support both concepts.”

China Unveils Environmental Restructuring Plan

draft plan, introduced Tuesday, reorganizes China’s government into a State Council composed of 26 ministries and commissions. Compared with the current setup, the number of ministerial-level entities is reduced by eight and that of vice-ministerial-level entities by seven.

One of the changes is renaming the Ministry of Environmental Protection. The new Ministry of Ecological Environment would take over responsibility for climate change policy and become the only entity in charge of policies related to climate change, water resource management, and pollution.

“China’s decision to create a new environment ministry in China, which includes the country’s climate change agenda, is a big shake up in the country but may well be a positive long-term development,” said Jackson Ewing, senior fellow at Duke University’s Nicholas Institute for Environmental Policy Solutions and adjunct associate professor at the Sanford School of Public Policy. “Although the practical impacts of China’s reorganization are not yet apparent, the Ministry for Ecological Environment appears poised to carry a strong mandate to strengthen the country’s air, water, soil and ecological focus.”

Tonny Xie, director of the Secretariat for the Clean Air Alliance of China noted that the change is “ … also a sign that China will continue the unprecedented commitment and investment to improve environmental quality in future, which will generate significant market potential for clean technologies.”

The plan, submitted by the government to parliament is expected to be approved this weekend after deliberations by the National People’s Congress, China’s parliament.

China, the world’s largest polluter, is in the midst of launching a nationwide emissions trading system to set emissions quotas for companies in the power sector. Announced in December, the program could more than double the volume of worldwide carbon dioxide emissions covered by tax or tradable permit policy.

Trump Fires Tillerson, Nominates New Secretary of State

President Donald Trump on Tuesday announced the exit of Secretary of State Rex Tillerson and the nomination of Mike Pompeo, the present director of the CIA, to replace him.

“Rex and I have been talking about this for a long time. We got along actually quite well, but we disagreed on things,” Trump said. “When you look at the Iran deal, I think it’s terrible, I guess he thought it was OK … So we were not really thinking the same. With Mike Pompeo, we have a very similar thought process. I think it’s going to go very well.”

Tillerson stood as a lonely voice in the Trump administration urging the president not to withdraw from the Paris Agreement, a global treaty that aims to limit global warming to well below 2 degrees Celsius above pre-industrial levels and to pursue efforts to limit that increase to 1.5 degrees Celsius. But Trump announced last year that the United States would be the only nation in the world not party to the agreement, though it cannot formally withdraw until 2020.

As a former Congressman, Pompeo described the new 2015 Paris Agreement as a “costly burden” to the United States. He noted then that “Congress must also do all in our power to fight against this damaging climate change proposal and pursue policies that support American energy, create new jobs and power our economy.”

Pompeo will appear before the Senate Foreign Relations Committee for his confirmation hearing in April, but his path to confirmation is uncertain.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

Tim Profeta is the founding director of the Nicholas Institute for Environmental Policy Solutions. The Nicholas Institute is part of Duke University and focuses on improving environmental policy making worldwide through objective, fact-based research in the areas of climate change, the economics of limiting carbon pollution, oceans governance and coastal management, emerging environmental markets and freshwater concerns at home and abroad. In his role at the Nicholas Institute, Profeta has continued to use his experience on Capitol Hill to engage in climate change debates. His research has focused, specifically, on market-based approaches to environmental regulations—particularly energy and climate change policy. Other projects engage his expertise in environmental law and air pollution regulation under the Clean Air Act.

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