PA Environment Digest Blog: Pennsylvania’s Electric Grid Is Dependent On One Fuel To Generate 59% Of Our Electricity; Market Moving To Renewables + Storage

On March 7, the Independent Fiscal Office issued its latest Pennsylvania Electricity update that reports the electricity grid is dependent on one fuel for 59% of the state’s electricity generation-- natural gas-- followed by nuclear power-- 31.9%, coal-- 5.4% and 3.7% from other sources.

In 2000, the electric generation fuel mix was 57% coal, 36% nuclear, 2% renewable, 2% petroleum and 1% gas. Read more here.

In 2010, the mix was 48% coal, 34% nuclear, 15% gas and 2% renewables. Read more here.

In 2017, electricity generation was 35% coal, 35% nuclear, 23% natural gas, 6% renewable, biomass and other. Read more here.

In 2021, 53% of electricity generation came from natural gas, 31% from nuclear, 12% from coal and 4% from renewables and other sources, according to the U.S. Energy Information Administration.

These changes in the coal-fired and nuclear power generation mix were caused by competition from natural gas driving them out of the generation market. Read more here.

Now the trends are that renewables are pushing out gas and coal because wind and solar are cheaper. Read more here.

A Third, A Third, A Third

This mix is far from the one-third, one-third, one-third electric generation base that previously provided stability to Pennsylvania’s electric grid.

Sen. Gene Yaw (R-Lycoming), Majority Chair of the Senate Environmental Resources and Energy Committee, correctly said in March of last year we need base electric generation fueled by a diverse mix of “fuels” to remain stable. Read more here.

“I think about five years ago I toured with the Committee, the PJM site in Valley Forge. And I know one of the comments made at the time was that Pennsylvania had almost a perfect energy mix at that time,” said Sen. Yaw.

"We were about a third, a third, a third [in sources of fuel to generate electricity-- coal, natural gas and nuclear].”

“We didn't have any reliability issues at all.” Read more here.

Stabilizing PA’s Electric Grid

Stabilizing Pennsylvania’s electric grid doesn’t mean force feeding the grid to become more dependent on one fuel.

The state certainly has plenty of gas-fired generation, but as we’ve seen gas infrastructure has vulnerabilities and is subject to price spikes, and nuclear electricity generation capacity is significant.

What we haven’t decided is what will make up that third leg to restore price and grid stability-- but there are significant renewable and storage facilities coming online.

The question is-- will it be fast enough?

Market Moving To Renewables + Storage In Big Way

The new electric generation project in the PJM Interconnection queue to be connected to the grid shows the market is moving in a big way to renewables + storage.

On January 22, the PJM Interconnection reported 40 Gigawatts of new electric generating capacity had cleared its review process in 2023. It expects to clear another 26 GW of capacity in 2024 and 46 GW of new generation in 2025. Read more here.

PJM said the new generation capacity includes almost all investor-driven renewable energy and storage-- 50.8% solar, 14.1% solar+storage, 12.7% storage and 6.1% wind.

Of the 72 GW of new generation in the queue, there are 108 projects in Pennsylvania with a capacity of just over 5 GW, according to PJM. Read more here.

PJM has been saying for some time fossil fuel generation resources are retiring faster than they are being replaced by renewable generation and storage and urged states to avoid policies to push generation off the grid before adequate capacity can replace it. Read more here.

PJM recommended states enact policies to facilitate quicker deployment of new generation and electricity transmission infrastructure in the transition to a clean energy grid. Read more here.

PJM and its stakeholders have also been working to overcome the vulnerabilities experienced in the natural gas infrastructure during Winter Storm Elliott in December 2022 and Winter Storm Gerri in January 2024 that caused significant, unanticipated gas-fired power plant outages. Read more here.

In addition to questions about the reliability of natural gas during more extreme weather events, electricity generators have said the historically low PJM wholesale electricity prices are not high enough to support baseload power plants like coal, natural gas and nuclear. Read more here.

How To Fill The Hole

In addition to the steps PJM is taking with its stakeholders, there are others being considered.

Community Solar

The General Assembly is considering legislation authorizing community solar programs that will dramatically and quickly expand private investment in solar energy facilities in Pennsylvania and create thousands of jobs, without costing taxpayers a penny. Read more here.

A Penn State economic study found that community solar projects are projected to create 12,000 total jobs in the Commonwealth and generate a $1.8 billion stimulus for the economy. Read more here.

This legislation has been pending for years.

Distributed Energy/Virtual Power Plants

In a major rulemaking initiative, the Public Utility Commission is seeking comments from stakeholders and other concerned parties about the use of Distributed Energy Resources and virtual power plants to help increase energy efficiency, enhance service and potentially lower costs. Read more here.

Priority Climate Action Plan/Clean Energy/Energy Efficiency

The Department of Environmental Protection submitted Pennsylvania’s Priority Climate Action Plan to EPA on March 1 that calls for much more rapid introduction of renewable energy generation and storage to the electric grid.

It calls for the use of federal resources available under EPA’s Climate Pollution Reduction Grants to expand the use of low carbon fuels in industries, bolster on-site renewable energy, expand distributed energy, pair investments in clean energy resources with energy efficiency and adopt permit reforms to ensure new, clean generation can be sited and deployed in a timely way.

DEP anticipates submitting an application for $500 million to support these and other climate-related initiatives under this program. Read more here.

Expanding Renewable Energy Standards

The General Assembly is considering an expansion of the renewable energy standards in the state Alternative Energy Portfolio Standards to achieve 30% renewable energy by 2030 and specifically increasing the solar energy target. Read more here.

This legislation has been pending for years.

Banning LNG Gas Exports To China/US Competitors

On February 28 in Congress, Ohio US Senator Sherrod Brown and Oregon US Senator Jeff Merkley introduced the Protecting American Households from Rising Energy Costs Act, legislation that would ban the export of crude oil or liquefied natural gas (LNG) to our biggest adversaries: China, Russia, Iran, and North Korea.

“It’s time to stop raising prices for Americans by sending LNG to our adversaries,” said US Senator Merkley. “I’m partnering with Senator Brown to fight to lower energy prices for working Americans.”

“We should not allow American liquid natural gas to fuel China’s state-sponsored industries. The Chinese Communist Party uses that energy to cheat and undermine Ohio production and Ohio jobs,” said US Senator Brown. “Blocking China and other adversaries from obtaining our LNG will protect our national security, and keep more of this energy in America, helping bring down prices for Ohioans.” Read more here.

Pittsburgh-based EQT natural gas driller wants to “unleash” LNG gas exports and the CEO has said we have a “duty” to export gas to China. Read more here.

Pennsylvania now only uses about 25% of the gas produced here and the remainder is used out-of-state and exported. Read more here.

Taking action to lower natural gas prices will also reduce electricity rates since generation has become more and more dependent on gas. Read more here.

The dramatic spikes in natural gas cost as a result of the Russian war in the Ukraine and international markets now setting the price of gas in Pennsylvania are still being felt in Pennsylvania’s electricity rates, as the Public Utility Commission has repeatedly warned electricity consumers. Read more here.

Related Articles - Natural Gas Price Spikes:

-- Guest Essay: A Conservative Argument For Clean Energy -- Follow The Market, Fossil Fuels Are No Bargain [PaEN]

-- Guest Essay: Key To Lower Energy Prices And Energy Freedom Is Diversifying Electricity Generation With Solar, Renewable Energy [PaEN]

-- Guest Essay: Energy Independence Is A National Security Issue - By Lt. General Richard Zilmer, USMC (Ret.), Pennsylvania Native [PaEN]

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-- Pittsburgh Business Times: Pittsburgh-based CNX Resources Latest Local Gas Driller To Cut Back On Production [To Raise Gas Prices]

-- Bloomberg: Natural Gas Prices Jump As EQT Slashes Output To Fight Glut

-- Reuters: US Natural Gas Producers Reduce Output In 2024 [To Raise Prices] While Demand Rises To Record High, US EIA Says

-- Forbes: U.S. Natural Gas Production Set New Record, But Don’t Expect Relief On Your Heating Bills [LNG Exports Link U.S. To High Prices] [PaEN]

-- Reuters: Chinese Company Wants Say In Louisiana LNG Gas Export Facility Permit Extension

-- PUC Again Reminds Consumers Of Dec. 1 Price Changes: Natural Gas (+149% to -64.2%); Electric (+18.8% to -25.7%) [PaEN]

-- PUC Alerts Consumers To Electricity Price Changes Coming June 1-- From 20.7% Increase To 17% Decrease; Driven By Price Of Natural Gas [PaEN]