Opinion: Municipalization is an even better deal now


Last week, I heard about a radical improvement to battery storage. These “flow batteries” are much cheaper than the current technology, with costs expected to drop by half or more. Commercial production is anticipated within a few years. Less expensive batteries will allow wind and solar energy to serve our demands much more cost-effectively, because they allow us to match this variable supply to our relatively inflexible demand by storing renewably generated energy when supply exceeds demand and then using it when demand exceeds supply. This would be in addition to our current ability to manage demand by, for example, cycling cooling loads at peak times, creating ice at night (using the excess wind energy that occurs then) to do cooling during the day, or running clothes dryers at off-peak hours.
Not only do batteries allow a utility to flatten its demand curve, but they may allow the utility to avoid having to contract for committed backup power adequate for its peak load. When anticipating a period of little sun or wind, backup generators can charge the batteries during low-demand times, and the batteries then add to the supply when demand exceeds the capacity of the backup generation. And to the extent that industrial-scale battery installations (possibly located at substations) are cheap enough to make multi-day storage cost effective, then additional renewable generation can charge the batteries in anticipation of bad weather periods. Of course, all this requires careful management, but this technology is already in development.
With this reduction in fossil fuel use and backup generation, at a certain point the cost of fuel becomes less important than the cost of the generation equipment. This means that we could use e.g. internal combustion engines to power the generators; these are less expensive than gas turbines, though a bit less efficient. All this together very significantly reduces the overall capital cost.
Also, renewable energy keeps getting cheaper: Solar panel costs have dropped by 70 percent since 2009, and wind energy costs have dropped from a peak of nearly 7¢/kWh in 2009 to below 2.5¢/kWh in 2014(per Lawrence Berkeley National Laboratory.) By the time we fully “disconnect” from Xcel, these costs will likely be even lower. All in all, the timing is very good.
The global side of the economic picture is uncertain and complicated, but here’s some data that I’ve found: The International Energy Agency estimates the 2013 direct subsidies to the fossil fuel industries at over $500billion/year. The Climate Policy Initiative estimates that keeping global temperatures from rising more than 2 degrees C would cost around $1 trillion/year, but a study by Kepler-Chevreux (adjusted for current oil prices) estimates that we could save that amount in fossil fuel expenses. The IMF estimates the total of direct subsidies plus uncompensated costs to health, the environment, and climate change at $5.3 trillion/year (6.9 percent of global gross domestic product). Spending the direct fossil fuel subsidies on mitigation strategies would cut public costs by more than half, giving the remainder a very high benefit/cost ratio. This means that we as a global community can afford to mitigate the upcoming climate disaster. As Nike says, we need to “Just do it!”
Municipalization, by disrupting the status quo, can create space for the needed changes here in Colorado. Once Boulder shows the way, other cities that are currently stuck with fossil fuel-based utilities will create pressure so they too can go greener. Then the regulatory system will have to change, probably leading to the breakup of generation/transmission/distribution monopolies. Colorado’s coal plants, like those in which Xcel has invested nearly $1.4 billion in the last 10+ years and which are our single biggest source of GHG emissions, can then be abandoned and the money used for renewables, storage, and grid management, dramatically reducing emissions.(I note that a University of Michigan study says carbon sequestration is way more expensive than previously thought, so there’s no saving the coal plants.)
Boulder’s role is to help show the way to a cleaner, cheaper energy future and stimulate the kind of changes that are needed. And the muni is only one of our opportunities. For example, we could also stop subsidizing driving by replacing our regressive transportation sales tax with parking charges, and use some of the revenues to fund free transit. (This might also avoid the need for more road improvements, like now proposed for East Arapahoe.) But municipalization is the most important move we can make, both locally and globally. So let’s keep going.


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