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New DOE report backs EPA air quality laws; experts urge utilities to increase demand response systems to meet demand

December 6, 2011

The U.S. Department of Energy (DOE) said this week that the implementation of new air quality rules will not hurt electric grid reliability.

The DOE released a comprehensive study outlining the effects of a number of laws enacted by the Environmental Protection Agency (EPA). The EPA is mandating that utilities and other power providers either upgrade antiquated power plants or decommission them if they cannot adhere to the regulations, which seek to curb a rise in greenhouse gas emissions.

The Electric Reliability Council of Texas (ERCOT) argued the rules could cause power outages on its power supply network, which functions independently. A report issued by the North American Electric Reliability Corporation (NERC) corroborated such an assertion, finding that the decommissioning and suspension of work at certain power plants in Texas could prompt electricity shortfalls as soon as 2013.

However, as the government pushed forward with plans to upgrade the nation's electric grid and implement smart grid technologies, the DOE asserted such claims are baseless, AOL Energy reports. In a 33-page report released this month, the DOE addressed the effects of the EPA's Cross-State Air Pollution Rule (CSAPR) and the Mercury and Air Toxics Standards (MATS), concluding that power plant closures would not result in energy supply constraints in any region of the U.S.

"DOE examined resource adequacy in this case compared to the planning reserve margins for each region. The analysis finds that target reserve margins can be met in all regions, even under these stringent assumptions. Moreover, in every region but one (TRE), no additional new capacity is needed to ensure resource adequacy in the Stringent Test Case beyond what is projected in the Reference Case," according to the report.

Some utility executives doubted the findings, but analysts said that electric grid operators could prevent power supply disruptions through the use of smart grid technologies. Overseers of the electric grid could augment their demand response systems, according to experts, which would help to curtail peak energy use.

Demand response management enables utilities and other power providers to balance electricity supply and demand during periods when consumption rates soar. For example, this past summer searing temperatures blanketed portions of the U.S., driving electricity consumption rates to their highest yearly levels. While in the past such an uptick would have spurred power outages, the precipitous rise in energy demand was offset in many regions through the use of augmented demand response resources.

Utilities are increasingly working with firms such as North America Power Partners (NAPP) to increase their demand response programs. NAPP cultivates relationships with large-scale energy users – normally businesses – through which they agree to curb their energy use during times of peak electricity demand.

Companies that participate in demand response programs access a new revenue stream, with many proving to be beneficial even if they are not asked to reduce energy use. Moreover, utilities are able to more effectively balance supply and demand, which enables them to reduce the occurrence of power outages.

In its report, the DOE noted "demand response or energy efficiency programs … might be deployed quickly to help maintain adequate resources when plants retire." Federal officials, including Democratic Massachusetts Congressman Edward Markey, have urged the government to further study how demand response systems could help to forestall power outages and balance the supply constraints and steadily rising demand. The DOE's study underscores how electric grid operators can ensure reliability through existing and emergent smart grid technologies.