Avoid a U.S. Energy Crisis

Author: Rich Nolan
U.S. Energy Crisis

The United States is vulnerable to an energy crisis if we don’t carefully manage the energy transition. Europe’s own historic, self-inflicted crisis serves as a warning to what could happen if U.S. decisionmakers follow Europe’s lead by focusing too heavily on the grid of the future, neglecting the energy realities of the present. Dismantling existing energy infrastructure, including dependable coal plants, has left Europeans without a backup plan when weather-dependent renewables provide less than expected power generation and natural gas supplies are stretched thin.

The U.S. is on track to make the same mistake if we don’t prioritize smart policies to maintain the fuel security provided by essential coal plants that can deliver the dispatchable power we need, for when we need it most.

The European energy crisis is a failure of policy

Europe is currently facing an unprecedented energy crunch generating soaring power prices for Europeans. 

Europe’s hurried shift from traditional power sources to intermittent renewable generation has created gaps in reliability. As a result, a combination of weak renewable generation and skyrocketing natural gas prices are forcing countries to pay top dollar to import fuel from others who are eager to cash in during this period of high demand. Unfortunately, those premium electricity prices trickle down to and must be paid by everyday citizens. Italians were warned to expect a 40 percent increase in their bills over the next several months. In Spain and Portugal, average wholesale power prices have tripled in just several months, with the U.K. experiencing even higher rates.

Europe’s poor policy and planning is exposing consumers to crushing costs and causing manufacturing facilities to shut down with protests erupting across the continent. Even with financial aid, surging energy prices are falling disproportionately on those least able to bear them. Many of society’s most vulnerable must now choose between heat, medicine or food. 

The United States is vulnerable to an energy crisis

The United States is vulnerable to a similar energy crisis because there is major gap between energy policy and energy reality. Elected officials are accelerating the closure of coal plants that can produce power 24/7 even before renewable transmission infrastructure is planned or built, or yet-to-be-developed grid scale battery capacity is created. The energy policy and reality gap has already failed the American people several times. Last year, blackouts in both Texas and California cost lives and hundreds of billions of dollars in damages and bills.

Despite this potential threat, legislators are doubling down—the exact opposite approach of what Americans want. In fact, according to recent polling, 72 percent of Americans are concerned that the speed of the transition to intermittent power sources is coming at the cost of grid reliability. In addition, 85 percent of Americans are concerned about rising energy prices and for more than 40 percent of low-income households, the rising cost of energy has become a top concern.

Americans’ concerns will likely grow as consumers try to stay warm this winter, while facing the sticker shock of a nearly 6 percent increase on cost-of-living year over year and natural gas prices that have surged by more than 180 percent over the past 12 months. The U.S. Energy Information Administration is projecting that heating costs for homes using natural gas will average nearly $750 this winter, up 30 percent from last year. 

Those higher energy prices have the potential to accelerate inflation, dampening consumer spending and pumping the brakes on our economic recovery.

We need smart energy policy focused on affordability and reliability

U.S. energy policy is at a crossroads and lawmakers have a serious decision to make about our future. The U.S. must maintain the fuel security provided by coal plants throughout the energy transition to ensure that reliability and affordability are not sacrificed under the guise of progress.