Eroding Diversity in U.S. Power Grid Will Mean Greater Price Fluctuations, Higher Bills and Negative Impacts to Economy
New York (September 19, 2017) – The U.S. power grid is on track to lose cost effective power supply diversity, a trend that will raise the cost and variability of power bills and create negative macroeconomic impacts that would ripple out through the broader U.S. economy, a new study by IHS Markit (Nasdaq: INFO), a world leader in critical information, analytics and solutions says.
The new study, titled Ensuring Resilient and Efficient Electricity Generation: The Value of the Current Diverse U.S. Power Supply Portfolio says that current policy-driven market distortions will precipitate a less efficient diversity portfolio where some U.S. power systems could have no meaningful contributions from coal or nuclear resources and a smaller contribution from hydroelectric resources. They will rely on a tripling of the current 7 percent reliance on wind, solar and other intermittent resources, and on natural gas-fired resources to supply the majority of generation.
To illustrate what is at stake if nothing is done to arrest the erosion in the cost-effectiveness, resilience and reliability of the current U.S. power supply mix, the study compares the actual industry performance of recent years (2014 to 2016) with that of a less efficient diversity portfolio case over the same time period.
