Industry: Climate Fight Would Strain Electric Grid

Scaling up renewable energy on a national scale will strain the electric grid, and threaten blackouts, according to a new report by the American Electric Reliability Corporation, an industry group for utilities and other power producers.

But while the report outlines potentially serious consequences from regulating carbon dioxide to combat global warming, it concludes that the most important thing is that president-elect Barack Obama and Congress set a clear strategy so the market can respond.

If coal-fired power plants are closed, the report said, there could be too-little electricity generated to meet demand, and replacing the plants with natural gas could strain the current transmission system. Burning coal currently supplies half of the nation's electricity. Further, the electric grid is not up to the task of delivering electricity generated by wind and solar farms in remote areas to population centers where energy demand is high.

None of the issues outlined by the group are new, but they are real-world concerns that the nation will have to confront when it addresses global warming.

The Natural Resources Defense Council, which isn't necessarily a traditional ally of the NERC, largely endorsed the report's conclusions:

"Today's report makes clear that we need a climate policy for the United States that includes comprehensive solutions for our nation's energy challenges," David Hawkins, director of NRDC’s Climate Programs, said in a prepared statement. "We can make our nation's electric system more reliable, less vulnerable to blackouts, and less dependent on pricey fuels by tackling our climate and energy problems as one. Federal climate policy should include resources to upgrade the nation’s electric grid, expand efficient energy use, and increase our reliance on geographically diverse renewable energy supplies."

Global investors, according to Reuters, have a similar message for world leaders: They want clearly defined climate change policies so they know how to invest their money.

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