----- Original Message ----- / Thanks to Jim Kotcon.

Subject: Happy Earth Day from FERC

April 22, 2009

No need to build new U.S. coal or nuclear plants -- FERC chairman

By NOELLE STRAUB AND PETER BEHR, Greenwire

No new nuclear or coal plants may ever be needed in the United States, 

the chairman of the Federal Energy Regulatory Commission said today.

"We may not need any, ever," Jon Wellinghoff told reporters at a U.S. 

Energy Association forum.

The FERC chairman's comments go beyond those of other Obama 

administration officials, who have strongly endorsed greater efficiency 

and renewables deployment but also say nuclear and fossil energies will 

continue playing a major role.

Wellinghoff's view also goes beyond the consensus outlook in the 

electric power industry about future sources of electricity. The 

industry has assumed that more baseload generation would provide part of 

an increasing demand for power, along with a rapid deployment of 

renewable generation, smart grid technologies and demand reduction 

strategies.

Jay Apt, a professor at Carnegie Mellon University's Electricity 

Industry Center, expressed skepticism about the feasibility of relying 

so heavily on renewable energy. "I don't think we're where Chairman 

Wellinghoff would like us to be," Apt said. "You need firm power to fill 

in when the wind doesn't blow. There is just no getting around that."

Some combination of more gas- or coal-fired generation, or nuclear 

power, will be needed, he said. "Demand response can provide a 

significant buffering of the power fluctuations coming from wind. 

Interacting widely scattered wind farms cannot provide smooth power."

Wellinghoff said renewables like wind, solar and biomass will provide 

enough energy to meet baseload capacity and future energy demands. 

Nuclear and coal plants are too expensive, he added.

"I think baseload capacity is going to become an anachronism," he said. 

"Baseload capacity really used to only mean in an economic dispatch, 

which you dispatch first, what would be the cheapest thing to do. Well, 

ultimately wind's going to be the cheapest thing to do, so you'll 

dispatch that first."

He added, "People talk about, 'Oh, we need baseload.' It's like people 

saying we need more computing power, we need mainframes. We don't need 

mainframes, we have distributed computing."

The technology for renewable energies has come far enough to allow his 

vision to move forward, he said. For instance, there are systems now 

available for concentrated solar plants that can provide 15 hours of 

storage.

"What you have to do, is you have to be able to shape it," he added. 

"And if you can shape wind and you can effectively get capacity 

available for you for all your loads.

"So if you can shape your renewables, you don't need fossil fuel or 

nuclear plants to run all the time. And, in fact, most plants running 

all the time in your system are an impediment because they're very 

inflexible. You can't ramp up and ramp down a nuclear plant. And if you 

have instead the ability to ramp up and ramp down loads in ways that can 

shape the entire system, then the old concept of baseload becomes an 

anachronism."

'A lot that is still not understood'

Asked whether his ideas need detailed studies, given the complexity of 

the grid, Wellinghoff said the technology is already moving that way.

"I think it's being settled by the digital grid moving forward," he 

said. "We are going to have to go to a smart grid to get to this point 

I'm talking about. But if we don't go to that digital grid, we're not 

going to be able to move these renewables, anyway. So it's all going to 

be an integral part of operating that grid efficiently."

The North American Electric Reliability Corp. reported last week on 

challenges in integrating a twentyfold expansion of renewable power into 

the nation's electricity networks but did not specifically address 

whether additional baseload generation would be needed. A spokesperson 

for NERC did not have an immediate response to Wellinghoff's comments today.

Revis James, who directs energy technology assessment for the Electric 

Power Research Institute, said recently that it is not clear how fast 

renewable energy can be added without creating reliability issues. "No 

one knows what the magic number is," he said. "Are we moving too fast? 

On the policymakers' side, there's a lot that is not still understood 

about the implications of a large share of renewables."

Impact on nuclear power

Wellinghoff's statement -- if it reflects Obama administration policy -- 

would be a huge blow to the U.S. nuclear power industry, which has been 

hoping for a nuclear "renaissance" based on the capacity of nuclear 

reactors to generate power without greenhouse gas emissions.

Congress created significant financial incentives to encourage the 

construction of perhaps a half-dozen nuclear plants with innovative 

designs, and Energy Secretary Steven Chu has promised Congress to 

accelerate awards of federal loan guarantees for some of these proposals.

But a major expansion in U.S. nuclear energy would require a high 

effective tax on carbon emissions from coal plants, or an extended loan 

guarantee and tax incentive policy, according to the Congressional 

Research Service and outside consultants. The leading energy bills 

before Congress do not provide more loan guarantees.

"If expansion of nuclear plants is the nation's policy, then Congress 

has to recognize that the U.S. energy companies cannot afford to do this 

alone," said Paul Genoa, policy director for the Nuclear Energy 

Institute, in a recent interview.

"The president needs to show his cards on nuclear energy," said energy 

consultant Joseph Stanislaw, a Duke University professor. "He cannot 

keep this industry, which must make investments with a 50-year or longer 

horizon, in limbo for much longer."

"I think [new nuclear expansion] is kind of a theoretical question, 

because I don't see anybody building these things, I don't see anybody 

having one under construction," Wellington said.

Building nuclear plants is cost-prohibitive, he said, adding that the 

last price he saw was more than $7,000 a kilowatt -- more expensive than 

solar energy. "Until costs get to some reasonable cost, I don't think 

anybody's going to [talk] that seriously," he said. "Coal plants are 

sort of in the same boat, they're not quite as expensive."

Can renewables meet demand?

There's enough renewable energy to meet energy demand, Wellinghoff said. 

"There's 500 to 700 gigawatts of developable wind throughout the 

Midwest, all the way to Texas. There's probably another 200 to 300 

gigawatts in Montana and Wyoming that can go West."

He also cited tremendous solar power in the Southwest and hydrokinetic 

and biomass energy, and said the United States can reduce energy usage 

by 50 percent. "You combine all those things together ... I think we 

have great resources in this country, and we just need to start using 

them," he said.

Problems with unsteady power generation from wind will be overcome, he said.

"That's exactly what all the load response will do, the load response 

will provide that leveling ability, number one," he said. "Number two, 

if you have wide interconnections across the entire interconnect, you're 

going to have a lot of diversity with that wind. Not all the wind is 

going to stop at once. You'll have some of it stop, some of it start, 

and all of that diversity is going to help you, as well."

Push for grid modifications

But planning for modifying the grid to integrate renewables must take 

place in the next three to five years, he said.

"If we don't do that, then we miss the boat,"Wellinghoff said. "That 

planning has to take place so you don't strand a lot of assets, a lot of 

supply assets."

Unlike coal and nuclear, natural gas will continue to play a role in 

generating electricity, he said.

"Natural gas is going to be there for a while, because it's going to be 

there to get us through this transition that's going to take 30 or more 

years."

Chu reiterated before the House Energy and Commerce Committee today that 

he supports loan guarantees for new nuclear power plants and is working 

with the White House on the issue.

"I believe nuclear power has to be part of the energy mix in this 

century," Chu said.

Chu also noted today that nuclear technology, along with renewables, is 

an area where the United States has lost its lead. "We are trying to 

start the American nuclear industry again," he said.

Coal currently provides half of U.S. power, while nuclear energy 

accounts for about 20 percent.

Senior reporter Ben Geman contributed.

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Nathan Willcox

Energy & Clean Air Advocate

PennEnvironment

1420 Walnut Street, Suite 650

Philadelphia, PA 19102

P: (215) 732-5897 F: (215) 732-4599

nwillcox@PennEnvironment.org 

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