New report shows that renewable energy prices continue to decline, undercutting the costs of existing coal plants
Colorado voters elected Jared Polis to be the state’s next governor on Tuesday, joining several other states that also elected governors who campaigned on clean energy. Polis campaigned on a platform that included bringing Colorado to 100% renewable energy by 2040, and in an interview with the Denver Post yesterday, said that renewable energy would be among his top priorities:
Is there anything in particular you plan on prioritizing?
Certainly, saving families money on health care, expanding access to preschool and kindergarten, and taking the steps to move toward more renewable energy will be among our top priorities both through executive actions as well as working with the state legislature.
In a debate last month, Polis emphasized that moving toward renewable energy could benefit ratepayers, because of the declining prices for new renewable energy:
The Colorado Public Utilities Commission approved Xcel Energy’s Colorado Energy Plan yesterday, greenlighting the plan to close two units at the Comanche coal plant in Pueblo Colorado, and replace that power with a mix of new renewable energy and battery storage projects along with existing natural gas plants.
Xcel Energy’s plan attracted national attention this year due to the proposals for large scale battery storage projects and unprecedented bids for cheap new wind and solar energy. In Colorado, the plan attracted support from labor, business, environmental, and community organizations, thanks to its expected economic and health benefits.
A report this week from the Colorado Fiscal Institute found that closing the two coal units would reduce air pollutants in Pueblo and Colorado, leading to fewer asthma attacks, emergency rooms visits, and other health problems. A June report from the Leeds School of Business at the University of Colorado Boulder found that the plan would create hundreds of new jobs, boost local tax revenue, and provide a net positive economic impact to the state - mostly by avoiding nearly $1 billion in coal purchases from Wyoming.
Wind energy projects are increasing jobs, tax revenue, and lease payments to landowners in the Eastern Plains of Colorado - and in the process, attracting support from leaders of both major parties in the state.
State legislators and other officials joined Xcel Energy and wind turbine manufacturer Vestas this week to highlight the economic benefits of wind energy in eastern Colorado, with a tour of the 600 megawatt Rush Creek wind energy project. The wind energy project in Cheyenne, Elbert, Kit Carson and Lincoln counties is currently under construction, and is expected to come online in October 2018.
“Wind is a huge win-win for rural Colorado,” said Shawn Martini, Vice President of Advocacy for the Colorado Farm Bureau. “Rush Creek is just one project and we’re poised to see even bigger investments should Xcel Energy’s Colorado Energy Plan be approved by the Colorado Public Utilities Commission, which, for the growth and health of our communities, we hope they do.”
Xcel Energy’s Colorado Energy Plan would mean a major expansion of renewable energy in the state, including additional major wind energy projects in eastern Colorado. According to an analysis from the Leeds School of Business at the University of Colorado Boulder that was filed last week last with the Colorado Public Utilities Commission (PUC), the Colorado Energy Plan would result in net economic benefits in Colorado, including a net increase of 549 jobs.
Colorado Energy Plan analysis shows switching from coal to renewable energy will boost jobs and local tax revenue
Two reports this month provide new details about Xcel Energy’s Colorado Energy Plan, including a glimpse at even lower bid prices for new renewable energy projects in the state, and an analysis of the impacts of the plan to jobs and tax revenue in Colorado and Pueblo County.
Xcel Energy's proposal would close two of the three units at the Comanche coal plant in Pueblo, Colorado, and replace that power with a mix of new resources including 1100 megawatts of wind energy, 700 megawatts of solar energy, 275 megawatts of energy storage projects, and the purchase of 380 megawatts of existing natural gas capacity. The Colorado Public Utilities Commission (PUC) is considering the proposal, and several labor, environmental, business, and community groups in Colorado are engaged in that process.
In January, we saw the bid prices for new renewable energy projects that Xcel Energy received, which showed that new wind and solar power in Colorado is now cheaper than existing coal plants. Those renewable energy project bid prices were so low, they attracted interest from a wide array of energy industry analysts and publications. But that earlier report only showed median prices of the bids that Xcel had received: $18/MWh for new wind energy, $30/MWh for new solar projects, and $36/MWh for solar with battery storage projects.
This month, Xcel Energy filed a more in-depth report with the Colorado PUC, which provides additional details about the renewable energy project bids it received. And while the new report doesn't include pricing details for specific projects, it does show the price range of bids that came in below those median prices:
The Preferred CEPP includes unprecedented low pricing across a range of generation technologies including wind at levelized pricing between $11-18/MWh, solar between $23-$27/MWh, solar with storage between $30-$32/MWh and gas between $1.50 - $2.50/kW-mo.
The lower end of those ranges rival some of the record-breaking low solar energy prices we've seen in recent months around the sunny Southwest.
A glimpse of the "infinite scalability" of energy storage, and some other key takeaways from this very exciting utility bid solicitation
After I posted Xcel Energy’s report showing unprecedented low prices for renewable energy and storage bids, several energy industry experts added some helpful context and analysis of the implications of these bids.
Much of that discussion focused on the low bid prices for projects that would combine renewable energy with energy storage. The Xcel Energy report showed that the median bid price for solar and storage projects was $36/MWh, while the median bid price for wind and storage projects was just $21/MWh. There were also seven bids for combined wind and solar and storage bids, with a median price of $30.60/MWh.
"The numbers in these bids are the lowest prices we have seen for any combination of renewable plus battery storage," said Ravi Manghani, director of energy storage at Green Tech Media.
Matt Gray, Utilities & Power Senior Analyst at Carbon Tracker, added: “Based on our modelling, the median bid for wind plus storage is lower than the operating cost of all coal plants currently in Colorado, while the median solar plus storage bid is lower than 74% of operating coal capacity.”
Utilities in Colorado are planning to add a lot more renewable energy over the next few years, for a variety of reasons. I’ve looked at a couple of the trends driving this energy transition such as 100% renewable energy commitments from the utilities’ major customers, including towns and cities like Pueblo and Boulder, and major companies like Aspen Skiing Company, Google, Vail Resorts, IBM, Anheuser-Busch, and New Belgium.
But perhaps the biggest reason that utilities in the region are pursuing more renewable energy is that the low costs of wind and solar energy have continued to fall, opening up a huge market: replacement power for existing coal plants.
Cheap renewable energy has already meant that when utilities needed new power generation in recent years, they have mostly chosen renewable energy. Nationwide, wind and solar power represented about two-thirds of all the new electricity generation capacity that was brought online in both 2015 and 2016, according to the US Energy Information Agency.
But as the costs of building new wind and solar projects have kept dropping, renewable energy is now becoming cheaper even than continuing to run existing coal-fired power plants - as Colorado Governor John Hickenlooper recently noted, “Coal is no longer the low-cost fuel."
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