Fuel Diversity Makes Sense


Even while the warm weather of August is still in our minds, I want to bring you back to the extreme cold that held New Jersey in an icy grip for the last two winters.

Temperatures plummeted and customers throughout the Northeast had their heaters running nonstop to keep their homes warm. Demand rose so much that power plants were not able to buy enough natural gas to run. Fortunately, there were other power plants available (including our own) that could run on other fuels – coal and oil for instance – so that electric service was not disrupted.

A company like PSEG needs to be prepared at all times of the year, whether it’s bitterly cold or sizzling hot. Having power plants that can handle a diverse range of fuels is especially critical during extreme weather events like the polar vortex or prolonged heat waves. Keeping costs low or environmental concerns might lead one to prefer a particular fuel type, but electric reliability really calls out for access to a diversity of fuels.

In recent years, abundant, low-cost natural gas supplies have transformed our nation’s energy picture and enabled us to provide significant savings to customers. However, it is important not to become overly dependent on a single fuel. “Don’t put all your eggs in one basket” is a time-tested principle that many investors use to reduce risk and achieve their objectives. As with investments, so with fuels: There’s a powerful case for diversification.

PSEG has long set out to operate power plants that run on a variety of fuels and technologies. Our ability to use alternate fuels helps us respond quickly to our customers’ needs. Our Salem and Hope Creek Nuclear Generating Stations play a key role in providing New Jersey and the region with reliable, emissions-free energy. We have invested billions of dollars in state-of-the-art systems to reduce emissions substantially across our gas and coal generation fleet. In addition, we have a growing portfolio of solar energy facilities in New Jersey and around the country. We are proud to show it’s possible to power the economy, provide good jobs for people and protect the environment at the same time.

Fuel diversity matters not just from our perspective. It makes sense for America, too. Protecting against over-reliance on a single fuel is a foundation of energy security. If history is any guide, it’s more prudent to plan for a multi-fuel future rather than expect a single fuel to do it all. And it’s equally important to be smart about fuel use by tapping into the enormous power of energy efficiency, which for good reason is often called the first fuel of the future.

Nuclear, coal and natural gas have large roles in the U.S. electric generation mix – together, accounting for about 90 percent of the total output. Nuclear produces most of the nation’s emissions-free energy – as well as New Jersey’s. Natural gas has been the fuel of choice for most power plants built in the U.S. during the past decade. Due to lower gas prices and tighter emissions controls, coal is being used less – but still plays a vital role in ensuring electric reliability, particularly in the Midwest and the southern U.S.

Renewable energy is further diversifying the energy mix – and playing an essential role in greening it, too, with new, clean power to fight climate change and create jobs. Solar and wind power are growing rapidly, but have a ways to go to become cost competitive. As intermittent resources, they must also be supplemented by other technologies to ensure the electricity remains there at the flip of a switch.

Behind the scenes, fuel diversity plays an essential role in enhancing reliability. It acts like an extra line of defense against possible supply shortages or interruptions. That’s good for our customers’ pocketbooks, too. When energy producers have different fuels and generation technologies at their disposal, they are better able to meet the market’s needs at the lowest possible cost to consumers.

Energy needs will continue to evolve, and we are never sure of what the future landscape for our fuels might look like due to cost shifts and technological breakthroughs. It’s important to keep open a wide range of good fuel options as part of a balanced resource mix. Fuel diversity is a smart investment for our nation’s energy future.

malikShahid Malik
President PSEG Energy Resources & Trade

Shahid Malik, President PSEG Energy Resources & Trade


Leave a Reply

  • The external press reports many different viewpoints about the US’s energy future and most are negative towards fossil and nuclear stations. This post by Shahid Malik provides a cogent argument why a multi-fuel strategy is good for the US as well as for our company for now and for the future.

  • I’m curious about the seasonality of PSEG’s not insubstantial solar ‘fleet.’ Do you see a drop in output from the various solar farms and pole-top panels around the state during the winter months?

    • Hi, Susan. Thanks for your question. Generally speaking, annual solar output follows a curve that is related to the amount of irradiance, or sunlight, that hits the solar panels on any given month. In New Jersey, solar output is typically at its lowest during December, January, and February because there are only about nine hours between sunrise and sunset, the angle of the sun is lower in the sky during those months and also because snow-cover can sometimes be an issue. As the days grow longer heading into the summer solstice and the sun moves higher in the sky from day-to-day, solar output also increases. The peak months occur roughly in the May/June timeframe when temperatures are still relatively cool (which is good for solar production) and the state sees around 15 hours of sunshine daily with long periods of mid-day peak sun.

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