Ensuring Reliability in a Tightening Energy Market
With energy prices on the forefront of people’s minds and gasoline prices seemingly rising by the day, I thought I’d address supply and reliability from the electric perspective. You expect reliable and affordable electricity from Yellowstone Valley Electric Cooperative, so how does your co-op deliver on that promise?
A complex network of electricity generators and tens of thousands of miles of electrical lines work together to ensure that enough electricity is available on the coldest winter morning and during the dog days of summer. What happens when the demand for power overwhelms the ability to provide it? That’s a particularly vexing question given the transition taking place in how electricity is produced and shared across this network. While that may sound simple, there is a complex web of facilities and organizations that work together to make it happen each day.
Regional transmission organizations coordinate, control, and monitor the electric grid across several states in a region. Think of them as energy traffic managers on an interstate highway system, regulating the number of cars – in this case, electricity – and their destination. Even so, on some days there is an imbalance in that system that leads to rolling power interruptions or blackouts—so-called “max-gen” events. In those cases, supply simply can’t keep up. In the Midcontinent region comprised of 15 states, there were six max-gen events from 2006 to 2016. Since 2016, there have been 15, including three last July and August alone.
Simply, that’s because power plants that generate electricity are being closed faster than new producers come online. In most cases, traditional large-scale power suppliers such as coal and nuclear plants are being closed and replaced by alternatives on a much smaller scale. And this gap is closing more quickly despite the development of new natural gas-fueled power plants.
As more electric utilities pursue zero- or low-carbon initiatives by 2035 and beyond, this challenge will grow more complex.
So, what’s the answer?
Electric cooperatives and others in the energy sector will continue to develop renewable options and pursue new technologies. But absent new large-scale alternatives and advances in energy storage, the stalwarts of today’s energy fleet—coal and nuclear energy facilities—must continue to operate in many regions. In some, they remain the most cost-effective options for producing electricity. If a transition is to occur to carbon-free types of energy, it will be fossil fuels like coal and gas that bridge that transition. Not only do power suppliers have billions of dollars still invested and financed in these types of generation, the replacement generation is still too volatile to operate unilaterally. Our largest supplier of wholesale energy is Basin Electric Power Cooperative. If Basin was forced to close all coal and gas plants and essentially write those assets off to zero, it would affect the financial stability of all of their 140-member distribution systems in 9 states, including YVEC.
While a transition has been and continues to occur, fossil fuel generation like coal and natural gas are needed to keep the lights on. It is simply a fact.
Brandon J. Wittman
CEO / General Manager