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The Bottom Line on the New Energy Economy
Colorado Climate Action

Colorado Shows How It's Done
30% Renewables by 2020,  Efficiency, and Phaseout of Coal Plants
 
 Graphics: CO Climate Action Plan

April 24, 2010
by Craig Severance

As the U.S. Senate now prepares to consider a new climate bill, Congress can consider how readiily climate action can take hold, through the example of Colorado.  This politically diverse state has aggressively embraced climate action as a way to grow its economy.

Bipartisan Support. Colorado's action plan is noteworthy because key elements of the plan have received strong bi-partisan support, in a "purple" Swing State that is neither dependably  Democratic nor Republican.  As an example, the latest measure adopted -- a  bill to encourage conversion of older coal-fired power plants to cleaner natural gas -- was co-sponsored by the Republican Senate Minority Leader Sen. Josh Penry and several other Republicans, along with most Democrats and Democratic Governor Bill Ritter.  

This strong support for climate action is remarkable, considering Colorado is one of the nation's most heavily coal-dependent states. 

Coal Was King.  As recently as 2005, Colorado relied upon coal to supply over two thirds of its electricity, making Colorado far more dependent on pollution-spewing coal than the nation as a whole, which averages around half of  total electricity from coal.  Coal has been cheap yet produces massive carbon dioxide emissions which cause global warming.  The idea of a major coal-dependent state such as Colorado becoming a climate change leader was thus a daunting challenge.   

Colorado is nevertheless now leading the way to achieve one of the highest reductions in carbon emissions anywhere in the world.  Colorado is on track to achieve a total 30% reduction by 2020 in CO2 emissions from its electric power industry.  This is far ahead of 17% reduction by 2020 greenhouse gas reduction goals set in Congressional climate legislation -- showing that even a "coal state" can far exceed those goals.

As the nation's 8th largest coal-producing state, Colorado could have chosen to resist climate change action like many other states with strong coal lobbies.  However, led by Colorado's own citizens through a 2004 renewable power initiative, strong leadership by Governor Bill Ritter and bipartisan action by the Colorado legislature, Colorado is instead showing "how it's done" to the rest of the country and the world. 

Coal will still be an important part of Colorado's economy for many years to come  However, the state has chosen to also develop plentiful new energy resources which stand to produce far more jobs and economic growth.  

Colorado leaders also realized that if climate change was not addressed soon, other major Colorado industries such as agriculture and the ski industry would be seriously damaged by runaway global warming.

Renewable Energy Initiative Led the Way.   In 2004, Colorado voters approved a citizen Initiative to require Colorado's large utilities to supply a minimum 10% of electricity generation from renewable sources by 2015 for investor-owned utilities and by 2020 for municipal utilities serving over 40,000 customers. 

At the time, Xcel Energy, the state's largest utility, opposed the citizen Initiative.   Xcel had just signed a contract to construct the state's largest power plant, Comanche 3, an advanced 750 MW coal-fired plant near Pueblo, CO, now scheduled to come on line in 2010.  The utility at that time regarded renewable power mandates as impractical and costly.

Cost Control Key to Renewable Standard.   To keep the cost of conversion to renewables low, the Colorado Renewable Energy Standard set up a maximum rate increase limit of 2%/year to consumer electric rates that could be used to fund the extra cost of renewable energy resources. 

The Colorado Public Service Commission set rules to require each utility to show the cost of power production that met the Renewable Energy Standard vs. the cost from non-renewable power sources, and utilities were not allowed to collect more than a 2% higher rate increase per year to meet the RES requirement.  (When Rural Electric Cooperatives were added with a lower Standard in 2007, their cost control was set at 1%/year).

These strict cost controls have been key to the wide public support for the Renewable Energy Standard.  


Two Upgrades to Renewable Standard within Six Years.  As renewable energy advocates predicted when the Initiative was passed, if Colorado utilities tried renewable energy, they would like it. 

Xcel Energy has since become the nation's "greenest" utility.   Xcel became the nation's leading provider of wind energy, and offered powerful rebates to its customers to install on-site solar photovoltaics.

Xcel acquiesced to a 2007 upgrade to the Renewable Energy Standard by the Colorado Legislature that increased the Colorado RES to a minimum 20% renewables for investor-owned utilities by 2020.  That legislation also for the first time imposed an RES on Colorado's Rural Electric Cooperatives (REC's), to achieve 10% renewables by 2020.

This year, Xcel announced it was ahead of schedule and could actually achieve a 30% Renewable Energy Standard by 2020, while still staying within the 2%/year cost control. 

The Colorado Legislature responded to this good news by increasing the Colorado Renewable Energy Standard to 30% by 2020 for Colorado's investor-owned utilities.  Governor Ritter signed the new 30% Standard into law on March 22, 2010.  The new Renewable Energy Standard places Colorado 2nd only to California's 33%-renewables-by-2020 requirement.  

Renewable Energy Resources Abundant.  As Dr. Arjun Makhijani author of the book Carbon Free and Nuclear Free, has stated, ""The United States is a renewable energy paradise."   Colorado exemplifies this abundance of renewable power sources.


Colorado Wind Resource Map  (Purple Zones High Wind Areas)

Wind Power as Main Workhorse.  As shown in the above graphic, Colorado has very high quality wind power resources.  Colorado's utilities plan to have over 3,000 Megawatts (MW) of wind power farms owned or under contract by 2020.

Solar On-Site Photovoltaics.  Xcel Energy established a Solar Rewards program to encourage its customers to install solar photovoltaic (PV) systems on their own properties.  It is one of the most successful solar programs in the nation.  In 2009, Xcel more than tripled its goals for the program, and is now planning 257.5 MW of distributed power by 2020.   Xcel's program was designed to encourage the growth of a robust local solar PV industry by offering strong incentives in early years.  As the industry has gotten its feet and PV prices have come down,  Xcel has gradually lowered the amounts it pays for solar rebates.


Image: Skyfuel

Solar Thermal Concentrating Plants.   Colorado's San Luis Valley, in the south central part of Colorado, has intense sunshine typical of the desert Southwest.  Xcel Energy has planned additions of 750 MW of solar thermal concentrating power plants with heat storage, for the years 2016-2018.  A transmission grid upgrade to the area is already in the works.

Small Hydro, Geothermal Power.  Colorado has many potential sites for small hydro and geothermal power.  Many Rural Electric Cooperatives are now pursuing small hydro projects to utilize existing water flows in irrigation and municiipal water supply systems. 

22% Renewable Electricity Statewide by 2020.  The 30% RES for investor owned utilities and only 10% requirement for large municipal utilities and REC's means that overall Colorado will likely achieve about 22% of statewide electricity supplied by renewable power sources by 2020.    Colorado may well exceed the minimum, however if, similar to Xcel, the muni's and REC's "try renewable energy and like it".

Yet, Colorado did not stop there.  Colorado has also begun to phase out several old coal-fired power plants.

Coal Plant Phaseouts. 
On Monday, April 19th, Governor Bill Ritter signed HB 1365, to encourage the conversion of coal-fired power plants to cleaner natural gas.  Responding to EPA moves to limit traditional air pollutants on Colorado's metropolitan Eastern Front Range, the new law calls for Colorado's privately owned electric utilities to slash Nitrogen Oxide (NOx) emissions from at least half of their coal-fired power generating units by 2017.   While the utilities have the option to install NOx scrubbers, the bill is widely expected to result in the retirement or conversion of three coal plants to natural gas.   The bill was supported strongly by Democrats and several key Republicans, who cited the Bill alone would likely increase Colorado's distressed natural gas production by 15%. 


 Cherokee Power Plant Denver

Coal Plant Retirements May Reduce CO2 Another 8%.  This likely replacement of several Colorado coal fired power plants by natural gas will add another layer of CO2 reductions to Colorado's achievements. 

In addition to lowering emissions of toxic nitrogen oxide, particulates, and mercury from the coal-fired plants, replacement by natural gas power plants will lower greenhouse gas emissions because natural gas power plants produce roughly only half the CO2 emissions of coal.  

Xcel is already retiring two older coal-fired stations: the 66 MW Cameo  plant in Western Colorado, and the 160 MW Arapahoe power plant in Denver.  The new legislation now targets three much larger coal power plants:   the 717 MW Cherokee power plant near Denver, the 505 MW Brush plant in NE Colorado, and the 192 MW Valmont station. 

If all five coal fired power plants are retired, a total of 1,640 MW of old coal-fired power plants may be shut down.  Though Xcel is now completing its new 750 MW Comanche 3 plant, Colorado is still likely to reduce total net coal capacity by 890 MW.  Also, the new Comanche 3 plant is more efficient than the older plants being retired.

With the greater efficiencies of new plants, especially replacing coal with natural gas, retiring these 1,640 MW of older coal plants may add  approximately another 8% reduction to Colorado's electric power industry CO2 emissions compared to 2005 levels.   

Baseload Plants Don't Work Well With Renewables.  As Colorado utilities move to supply a high percentage of power from renewables, retiring "base load" plants such as coal becomes very important.   Baseload plants such as coal and nuclear power that are designed to run all the time have been called an "anachronism" by Federal Energy Regulatory Commission Chairman Jon Wellinghoff, because they don't work well with renewables.  They actually can get in the way, because the baseload plants are not designed to shut down when the wind blows or the sun shines.  

Wind power farms, for instance, typically produce total MWh's equivalent to around 38% of the energy that could be supplied if they ran at their peak MW output all year long.  A utility that relied on wind to supply 30% of its power supply would thus have to build thousands of MW's of wind farms. The wind farms are economical power as there is no fuel cost.  However, on a windy day all of those thousands of MW's of free power may all be available at once, and the utility will need to shut down fuel-consuming power plants to take advantage of this free power. 

If the utility has a large amount of its generating capacity in baseload power plants like coal or nuclear that cannot shut down quickly, the free renewable power may be wasted.   A far better complement to renewable power is a natural gas plant that can follow loads quickly, shutting down when the wind blows or the sun shines, and powering up quickly when needed.  Xcel Energy has acknowledged it may well never build another coal-fired power plant, after the controversy and costs around Comanche 3. 

Huge Response to Energy Efficiency Programs.   Despite the move to a greater percentage of kWh's from power plants that produce zero or low emissions, Colorado would still have a hard time reducing total emissions if consumers require far more kWh's than today.  It would be like buying more fuel-efficient cars, but driving more miles  -- the total amount of gas burned might stay about the same.

While consumers want improved lifestyles, increasing kWh use need not be part of that deal.  In fact, the better appliances, water heaters, and air conditioners on today's market use far less electricity.

This past week Colorado launched its Recharge Colorado campaign to encourage energy efficiency, and the response was overwhelming.  Consumers swamped the state's website with tens of thousands of applications for Federal Stimulus-funded and utility-funded rebates for efficient appliances and other energy saving measures.  Colorado has also worked for several years to train energy auditor firms around the state to begin to establish a foundation for a moe efficient building industry. 

Jobs, Jobs, Jobs.  Strong political support for climate action plans has not come solely because Coloradans are concerned about global warming.  Many politicians have not even considered climate change.

Development of wind and solar, construction of more efficient power plants, reviving Colorado's natural gas industry, and encouraging consumers to buy more efficient appliances all create local jobs. A study by Vote Solar and Environment Colorado of the 30% renewables requirement projected creation of 33,500 jobs and over $4.3 Billion of economic activity for Colorado.

If you ask a Colorado wind farm construction crew, a natural gas driller, or an appliance store salesman about climate change, you will likely get different responses.  Ask them about the need for jobs, however, and all will agree.   Colorado's climate action plans are working.


This article was published April 24, 2010 at www.energyeconomyonline.com.


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