### Key Insights
Recently, the U.S. Department of Energy (DOE) released a report alerting to potential blackouts if coal and gas power plants are allowed to retire. However, three clean energy groups assert that this report lacks a serious evaluation of reliability and resource adequacy. They filed a formal request for a rehearing to contest the report’s findings.
The organizations—Advanced Energy United, the American Clean Power Association, and the American Council on Renewable Energy—argue that what is labeled as a “report” is merely a tool to bolster DOE’s regulatory efforts. They describe it as “arbitrary and capricious,” aimed at increasing federal intervention under the Federal Power Act.
Interestingly, the Department of the Interior has already referred to this DOE resource adequacy protocol in an official action. They indicated concerns about the capacity density of energy projects, particularly pointing out wind and solar energy as “inefficient.”
### Insights on the Situation
The DOE has 30 days to respond to the rehearing request. Caitlin Marquis, Managing Director of Advanced Energy United, shared in an interview that if the DOE denies the request, the groups would have 60 days to seek judicial review.
Marquis expressed hope that the DOE engages with their concerns, as they have presented strong counterarguments. The report is criticized for making unrealistic assumptions about load growth and other factors that will affect energy reliability through 2030. Kent Chandler, a former official with the Kentucky Public Service Commission, remarked that the analysis does not accurately reflect the complete picture of where resource adequacy stands today.
Chandler noted that the report assumes ongoing retirements of coal, gas, and oil power plants, and that only advanced projects will be ready by 2030. Further, it seems to overlook significant energy sources expected to come online soon, such as a major nuclear plant in Michigan.
On the demand side, the DOE estimates significant load growth, predicting that around 50 gigawatts of U.S. data center capacity will be added from 2025 to 2030. However, Marquis mentioned that these expectations are higher than other credible forecasts.
Chandler pointed out that the DOE’s assumptions also simplify the complexity of different energy types’ reliability contributions. For instance, their analysis of gas-fired plants fails to account for potential failures, such as those caused by weather-related fuel supply issues.
Grid operators like PJM Interconnection have noted that during peak winter times, the reliability of these generators may not meet the demand.
Despite regulators knowing the existing reliability issues, Marquis noted that the DOE dismisses their potential to ensure adequate resources and maintain reliability going forward.
Making decisions based on this report could lead to a more expensive energy grid, without adequate planning. The DOE might mandate the retention of less economical fossil plants, which could end up costing consumers approximately $3.1 billion annually by 2028, according to a recent consultancy report.
Marquis argued that a utility rate case would be a more effective tool to consider all available solutions and costs, rather than relying on a measure that could significantly raise costs for consumers.