This article by Allen Best is excerpted from a longer article on BigPivots.com, shared on November 2, 2023. You can read the full story here.
Colorado can decarbonize its electricity very deeply by 2040 without busting the bank. But there’s a catch.
To hit this 98.5% decarbonization level will require accepting natural gas as 1% of the mix along with a small percentage of carbon-based electricity imported into Colorado.
And getting there will not require still-costly emerging technologies.
That’s the take-away from a modeling study commissioned by the Colorado Energy Office.
How about 100% emissions-free electricity? That can be achieved, and in several different ways — all of them at a higher price, according to the modeling conducted by Ascend Analytics, a Boulder-based company.
The company modeled two other scenarios deploying deep levels of geothermal, hydrogen, and advanced nuclear reactors as well as other emerging technologies. Still another scenario examined the cost of using simply wind, solar, and existing battery technology. And one scenario emphasized local generation.
These five other scenarios came in at prices of $47.1 billion to $56.2 billion in net-present value — all substantially higher than the $37.5 billion of the less-than-perfect scenario using some natural gas.
Burning natural gas on an as-needed basis to ensure reliability will produce 565,000 metric tons of emissions in 2040. That compares with 40 million tons in 2005, according to the modeling study. This scenario also envisions a higher share of electricity , about 17%, being imported into Colorado.
All the scenarios in the modeling assume substantial amounts of improved energy efficiency, in effect partially eliminating the need for new generation. All models also assume that Colorado utilities will, as required by a state law, be participating in some sort of regional market for electricity by 2030.
Will Toor, director of the Colorado Energy Office, called the study results “huge.”
“The biggest takeaway of the study is understanding that we can get very deep emissions reductions, nearly zero emissions by 2040 while minimizing costs to utility customers. That is not something that we understood going into this study,” he said in an interview.
“As we look at developing the policy framework for 2040, it will be very much informed by that understanding,” he added.
The modeling study will likely deliver the justification for a bill in the legislative session beginning in January that would propose a new emissions-reduction target for Colorado’s electrical utilities. Laws adopted in 2019 and in subsequent years tasked those utilities with reducing emissions 80% by 2030. Most and perhaps all seem to be on track to get there with relative ease.
Some utilities expect to get far higher—and soon. Notable is Holy Cross Energy, the electrical cooperative based in Glenwood Springs. It expects to achieve 92% emissions-free electricity by early in 2024 and has a goal of 100% by 2030.
Bryan Hannegan, chief executive of Holy Cross, has long said that the path to 90% was reasonably clear. The hard part, with answers still unknown, he has said, will be that final 10%. And unlike the path to 90%, that final leg will likely be more expensive.
The modeling has any number of assumptions. Some likely are further out on the limb than others.
All the scenarios assume a 40% increase in electrical demand across Colorado during the next 17 years. Population growth will drive some of this new demand. Increased demand will also result from electricity replacing fossil fuels in both transportation and building and water heating.
To satisfy this increased demand will require new generation. Just how much new generation will depend upon the type. Wind and solar exclusively from generators within Colorado coupled with battery storage would require 74,492 megawatts of installed capacity. Having natural gas available will require far less, 44,474 megawatts.
On a more micro level and with a concrete challenge, Platte River Power Authority — the supplier to Fort Collins, Loveland, Estes Park and Longmont — is putting together its resource plan looking out to 2030. Directors in 2018 identified a goal of 100% renewables by 2030 but also attached a handful of conditions to that goal. Five years later, Platte River’s planners don’t see a way to 100% by 2030, at least not without risking reliability or absorbing considerable costs. One scenario calls for 85% renewables. The plan, however, is not scheduled to be completed until June.
For an explanation of the reasoning for a unanimous resolution by Platte River’s board of directors, see a blog by Fort Collins Mayor Jeni Arndt, her city’s board representative.
Transmission, seen by many as critical to deep levels of emissions reductions, gets relatively little mention in the modeling report. Arguably, an entire scenario could be built around potential for transmission upgrades, such as greater ease of moving electricity between the Western Interconnection grid, of which Colorado is a part, and the Eastern Interconnection, which starts at Kansas and Nebraska.
Ascend Analytics had conducted similar modeling about deep, deep decarbonization of electricity for Los Angeles Water and Power. The question in that study was what would it take for Los Angeles to achieve zero-emissions electricity?
Twenty years ago Colorado and its electrical utilities almost entirely embraced coal generation as the cheapest energy source far into the future. By 15 years ago, that resolve had weakened. Voters had adopted the state’s first renewable energy mandate and legislators had upped it. Wind prices were swooping down. Not least utilities had become confident of keeping lights on while deploying wind and solar.
A watershed year was 2017. Xcel Energy, Colorado’s largest utility, which supplies roughly half of the electricity in the state, sought bids for new electrical generation. The low prices for wind and solar dramatically undercut those of fossil fuels. Proponents of renewables were elated. A year later, Xcel Energy announced its plans for 80% decarbonization by 2030. The paradigm had shifted.
Most of those wind, solar, and storage projects bid in 2017 have now or soon will go on line. Statistics for 2023 are not yet available. However, as of 2022, renewable energy accounted for 37% of the state’s electrical generation, with wind power accounting for four-fifths of that renewable generation, according to the U.S. Energy Information Administration.
Two coal plants have closed since 2017 and now eight more will be laid down before the end of 2031. One, Pawnee, located at Brush, is to be converted to natural gas.
Toor said his agency began having discussions in 2022 about the next steps beyond 2030. The questions guided creation of the modeling study. The state called in utilities, environmental groups, industrial sectors, and others for conversations about how to frame the study.
Ean Tafoya, the Colorado director for GreenLatinos, a national advocacy group, said he remembers the first meeting occurring in May. Based on the number of those interested in environmental justice invited to participate as stakeholders, he suspects dozens of stakeholders were involved.
The results of the modeling Tafoya described as “very promising.”
Read the complete story at BigPivots.com
Allen Best publishes the e-journal Big Pivots, which chronicles the energy transition in Colorado and beyond.