You probably haven’t heard about it. But one of the most critical energy developments in years is now gearing up for a major battle in America.
That’s a slate of new regulations around power pricing across the U.S. Which have been proposed by the Trump-era Department of Energy (DOE), in order to give coal and nuclear power generation a boost — opened for public comment this week.
Here’s the crux: the new DOE rules aim to ensure “reliability and resiliency” of power generation in America. By rewarding electricity producers who are able to generate continuous and steady power supply.
There are a couple of key pieces to the exact wording here. One being that electricity grid operators will be required to provide “full cost recovery” to some power-producing facilities. Specifically, those power plants that “maintain 90-day on-site fuel supplies”.
That basically means nuclear and coal-fired plants. With these solid-fuel driven facilities being the only ones that keep large fuel inventories on-site — unlike alternative generation methods like natural gas, hydro and renewables.
The cost recovery specification is critical here. As it would mean that grids would be required to ensure pricing that pays back coal and nuclear plant builders for all of their costs in putting up new facilities — likely meaning such operations would enjoy premium pricing.
If implemented, these rules would thus encourage the building of new nuclear and coal plants. Which proponents of the law say are necessary in order to provide stable baseload power to the grid.
But opponents of the rules disputed that belief in official submissions this week. With lobby groups from natural gas and renewables saying there is no evidence that America’s power system is lacking in reliability.
This is an absolutely critical development for all energy observers. Watch for a final decision coming very quickly — with DOE having set a target of just 60 days for full review. If this measure goes ahead, coal and uranium could get a significant lift in this major market.
Here’s to being reliable,
Dave Forest
Article by Pierce Points
