Opinion: Our energy future


The Clean Air Clean Jobs Act (CACJA), passed by the Colorado Legislature in 2010, could end up committing us to a future tied to coal. This may seem counter-intuitive, since CACJA will lead to early retirement of some Metro-area coal fired power plants, and their replacement with cleaner gas fired plants.
Here`s the problem: CACJA ended up requiring us to pay Xcel the remaining balance due on the Metro-area coal plants, even though they will be retired before their useful lifetimes end. This is not a huge financial burden, as the early retirement is only a few years on average. But, in the process of implementing CACJA, the Public Utilities Commission approved Xcel Energy`s request to invest about $380 million to upgrade nearly 750 MW of non-Metro-area coal plants, and these plants have lifetimes extending out to 2041 for the biggest one. If these plants are then shut down relatively soon because we want less CO2 emissions, we`ll have to pay twice – once for coal upgrade and once for renewables. Another hit will come from the nearly $1 billion tied up in Xcel`s portion of the new Comanche3 coal fired power plant, which has a 60 year projected life. So Xcel`s coal investments create a strong financial disincentive to converting to a mostly renewable energy future.
There is also a technical issue. Coal fired power plants don`t work well with high levels of renewable energy. Coal plants are very costly and their output cannot easily be adjusted, so they generally operate at full power 24/7; that`s why they are called “baseload” plants. But the most common forms of renewable energy are inherently variable – the sun goes behind clouds, and wind speeds up and slows down.
Wind, which in Colorado blows more at night, and solar, a daytime source, match up reasonably well and thus can usually supply most of the demand during a given 24 hour period. Therefore, as renewable energy prices drop and we convert to more clean energy, we will need backup power to fill in the gaps, and to handle the times when renewables are not generating power and other options are exhausted. What we don`t need is large amounts of 24/7 coal-fired baseload power.
To address the variability of renewable energy sources, there are a number of options: Demand can be adjusted to follow the supply, e.g. by having switches on commercial air conditioners that the utility can turn on and off as needed. (This also reduces peak load, thereby reducing the capital cost of backup energy sources.) Gas turbine power plants can follow renewable energy`s fluctuations; they can be cranked up or down very quickly. Gas plants are also very efficient and emit much less CO2 than coal. Other options include using banks of batteries (becoming cheaper by the month), pumped storage (requiring two reservoirs, one above the other, like above Georgetown), or even making ice at night to use for cooling during the day. Other renewable supply sources, such as methane generators at waste treatment plants, can be used to fill in the gaps. Finally, energy efficiency is the most important investment, as it reduces total load and therefore the cost of both renewables and backup generation.
Colorado needs a long-term plan that identifies the most cost-effective path to achieve a very high level of renewable energy. This means not investing in baseload coal plants (also, coal prices have been escalating rapidly, and coal supplies are becoming more inaccessible) but instead putting our money in energy efficiency, demand management, gas backup generation, storage, and local generation sources that can work to support wind and solar.
Every city that has a franchise with Xcel should make an issue of not investing any more money in coal plants. The Legislature should set aside the $380 million coal investment that is part of PUC-approved plan, and direct the Public Utilities Commission to focus their next Resource Plan on a long-term renewables-based strategy. The Legislature should also consider lifting the current 2 percent rate impact limit on renewable energy investment, and require Xcel to pay for independent renewable energy using the same high rate of return we now pay Xcel for fossil fuel plants. If we act now, we can, over the long term, save both money and the environment.


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