Governor-elect Jared Polis says moving Colorado toward more renewable energy will be a top priority

New report shows that renewable energy prices continue to decline, undercutting the costs of existing coal plants

By Joe Smyth | [email protected] | @joesmyth

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:

Polis: “We have a plan to get to 100 percent renewable energy by 2040 or sooner. We're going to do that by: raising the cap on solar gardens, allowing communities to invest in their own developments; reducing financing costs for home solar through a PACE program that was available for commercial and expanding that to residential; work through the authority the governor has appointing members of the Public Utilities Commission to make sure we focus on keeping rates low, cleaner air, doing our part on climate, and moving to renewable energy.
 
“The exciting thing is that Xcel will tell you today that new wind energy costs 20 percent less than existing coal. So the sooner we can recognize the benefits of the green energy economy, the greater the savings will be for Coloradan ratepayers.”
 
Moderator Nic Garcia: “Can you do all of that in your first year?”
 
Polis: “If Democrats win the legislature, I think we have a good chance of getting our agenda at PolisforColorado.com done.”

Democrats won a majority in the Colorado state Senate on Tuesday, and held their majority in the state House of Representatives.


New data show renewable energy prices continue to decline
Polis was referring to the bids for new renewable energy that Xcel Energy received in response to its Colorado Energy Plan, which showed that new wind and solar power in Colorado is now cheaper than existing coal plants. The Colorado Public Utilities Commission approved the Colorado Energy Plan in August, green lighting Xcel’s plan to shut down two units at the Comanche coal plant in Pueblo Colorado and replace that power with a mix of new wind, solar, and battery storage projects and existing natural gas plants.

Since those renewable energy bids became public in January, more reports have shown that new renewable energy is also cheaper than coal plants owned by other Colorado utilities. In April, a Moody’s Investors Service report showed that Tri-State Generation and Transmission Association’s coal plants are more expensive than new renewable energy. And in August, a report from the Rocky Mountain Institute found that Tri-State could save $600 million by shifting from coal to renewable energy.

At the Colorado Rural Electric Association Energy Innovations Summit last week in Denver, Tri-State's CEO said that Tri-State has moved to benefit from the declining costs of renewable energy, noting that “as these tax credits are trailing off, developers are getting unbelievably aggressive in their pricing. And so the last time we’ve gone out, we’ve been able to justify adding renewables simply because of the economies of that.”

And today, a new report from investment bank Lazard shows that prices for renewable energy have continued to decline. In its annual levelized cost of energy (LCOE)​ report, Lazard found that, “The mean levelized cost of energy of utility-scale PV technologies is down approximately 13% from last year and the mean levelized cost of energy of onshore wind has declined almost 7%.”​

Image from Lazard 2018 Levelized Cost of Energy report

The Lazard report also highlights that new wind energy is now often cheaper than running existing coal plants, while new solar power is about the same as existing coal - and that’s before taking into account the federal tax credits available for new wind and solar projects.

The low end levelized cost of onshore wind-generated energy is $29/MWh, compared to an average illustrative marginal cost of $36/MWh for coal. The levelized cost of utility-scale solar is nearly identical to the illustrative marginal cost of coal, at $36/MWh. This comparison is accentuated when subsidizing onshore wind and solar, which results in levelized costs of energy of $14/MWh and $32/MWh, respectively.

Image from Lazard 2018 Levelized Cost of Energy report

Further reading:

Financial Times: New wind and solar generation costs fall below existing coal plants

​Denver Post: Q & A: Gov.-elect Jared Polis, after Prop 112 defeat, talks drilling setbacks

Lazard: ​Levelized Cost of Energy and Levelized Cost of Storage 2018

​Media Matters: Climate change was "No. 1 topic" the public wanted to hear about in Colorado gubernatorial debate, moderator says

New wind and solar power in Colorado is now cheaper than existing coal plants

Moody’s report shows Tri-State’s coal plants are more expensive than new renewable energy

​Report: Tri-State could save $600 million by shifting from coal to renewable energy​