May 5, 2021 - Not so long ago the electric vehicle (EV) revolution seemed far more hype than substance. But global EV sales were up 40% in 2020, the world’s major automakers are falling over one another to announce all-electric futures and the Biden administration appears to be all in, announcing that the federal vehicle fleet will go all electric and pledging $174 billion to accelerate the national pivot to EVs.

The question now isn’t whether the EV revolution will arrive, but rather will the electricity grid be able to handle it when it does?

The Federal Energy Regulatory Commission (FERC) has been grappling with just that question and what should be done to prepare. "I think everyone realizes we're in the midst of a strong wave in terms of moving forward with electrification," FERC Chairman Richard Glick said during his opening remarks at a recent technical conference on the issue.

Panelists at the conference didn’t mince words. According to a strong consensus, the electrification of transportation, heating and other end uses, viewed as critical to meeting the nation’s emission reduction goals, will require the nation to double its electricity load by 2050. Ella Zhou, senior modeling engineer at the National Renewable Energy Laboratory, told the FERC conference that meeting that future will require “a doubling of generation capacity in all regions by 2050."

The era of flat electricity demand is about to come to an abrupt end with huge ramifications for how we should be shaping energy policy. Judging by the reliability concerns already plaguing Texas and California and beginning to spread to other wholesale electricity markets, we’re woefully unprepared for the change now on our doorstep.

The reliability and affordability of the nation’s electricity supply is already a life-and-death matter. The February catastrophe in Texas was a stark reminder. But shifting heating, transportation and other industrial uses onto the shoulders of the grid will make the stakes that much higher. There will be even less room for error.

But instead of acknowledging the coming surge in demand and working to strengthen the grid, mainstream energy policy seems determined to dismantle the very sources of power that continue to underpin reliability. The nation’s coal fleet appears squarely in the bullseye of those that misidentify near-term national emissions reduction targets as an end game while global emissions continue to rise.

With demand about to takeoff, it’s abundantly clear that new additions of intermittent power should come on the shoulders of existing dispatchable capacity, not in place of it. For too long flat electricity demand has been used as a poor excuse to dismiss reliability concerns about shrinking reserve margins and the erosion of fuel-secure dispatchable generation. Those excuses can now be firmly put to bed.

As this winter made clear, coal capacity remains essential in many states. It’s capacity that will be desperately needed to ensure balance, affordability and reliability in the years ahead. It’s an essential bridge to where we hope to go but maintaining it will require significant changes to market design to ensure it’s there when we need it most.

Markets must be given the tools to properly compensate the security and reliability provided by existing fuel-secure, dispatchable generation. As FERC grapples with an electrified future, determining how best to value and compensate these capabilities through the marketplace should be at the top of the priority list.