Since 2004 ━ when Colorado became the first state in the U.S. with a voter-approved renewable-energy portfolio standard ━ Colorado has been shifting toward clean, low-cost wind and solar. Since 2010, Colorado’s renewable-electricity generation ━ led by wind and solar ━ has more than tripled, accounting for 30% of the state’s total generation in 2020.
Today, Colorado ranks seventh nationwide in installed wind power and 11th in solar.
Continuing this shift, Colorado’s largest utility provider, Xcel Energy, generated 37% of its electricity from in-state renewable resources in 2020, an increase of 30% from the previous year.
In August 2018, Colorado regulators approved an Xcel plan that will close two coal-fired power plants decades ahead of their original closure dates — a plan that will achieve nearly 55% renewable energy by 2026 and save Colorado customers hundreds of millions of dollars by replacing higher cost coal generation with lower cost renewables.
In 2019, legislation built on this success by requiring Xcel to take the next step in meeting its customers’ energy needs with low-cost, pollution-free wind and solar and incentivizing other utilities to do the same.
Looking at the cost of closing Colorado’s coal-fired power plants is a bit like considering the replacement of an old car. For many of us, there is a moment when we must consider whether it still makes sense to keep spending more money on the old car we have, or if it’s a smarter move to get a newer, lower-maintenance — and, in this case — electric car.
It’s important to recognize that keeping the old car isn’t free.
We have costs for gas, and we also have costs for maintenance and repairs that increase as a car ages — and then there is the air pollution the vehicle generates.
While we might not readily consider this a cost, air pollution creates very real impacts and costs for Colorado communities and businesses. In contrast, a newer electric car does not have a cost for gasoline, and it will require far fewer repairs and greatly reduce air pollution.
This isn’t a perfect analogy, of course, but it illustrates an important point that was missed in an April 13 Colorado Sun article about Xcel’s latest proposal to close many of its coal-fired power plants. Customers pay the costs to build and maintain coal units regardless of when those units retire, and there are savings from replacing expensive coal units with cheaper renewables.
If the coal plants were kept running, customers would have to continue to pay for them. This includes any previous capital costs that are being paid off, the costs of coal, maintenance of the aging power plants, required air pollution upgrades, and the eventual decommissioning of these plants.
Buying new wind and solar, like buying a newer electric car, has a cost. It also comes with big savings. There are no fuel costs for wind or the sun, and it costs far less to operate these new generation facilities.
As an example, when Colorado’s second-largest utility, Tri-State Generation and Transmission Association, decided to retire all of its Colorado coal plants, its CEO described a “green dividend” that low-cost renewables are bringing to its customers, allowing Tri-State to lower the rates they charge.
To determine the cost to Xcel customers of closing the utility’s coal-fired power plants requires some math. While we don’t know yet whether state regulators will approve in Xcel’s proposal, we do know that you cannot ignore this math when trying to figure out the cost to customers.
As with a car, we have to compare the total cost of meeting customer energy needs with coal-fired plants to the total costs and benefits of meeting the same needs without those plants.
Under Xcel’s 2018 approved plan and its proposed plan, the total costs of all of its future coal-plant retirements — including Comanche 1 and 2 near Pueblo, which will be retired in the next few years; as well as subsequent retirements of Hayden 1 and 2 and Comanche 3, and the conversion of Pawnee in Brush to natural gas — are projected to be very modest, with the extra costs of retirements largely offset by cost savings from lower-cost wind and solar.
And for these changes, we’ll get significant benefits from reduced air pollution — Xcel’s analysis shows a net savings of $1.5 billion when these costs are included — and Colorado gets 2,300 megawatts of wind power, 1,600 MW of solar, 400 MW of storage and 1,300 MW of “flexible dispatchable generation.”
Additionally, wind, solar, storage and transmission represent a tremendous rural economic development opportunity for Colorado. More than 62,000 Coloradans worked in clean energy statewide by the end of 2019 before the COVID pandemic took hold.
Revitalizing Colorado communities through investment in clean energy infrastructure is the road forward to clean air, job creation and economic recovery.
Will Toor is the executive director of the Colorado Energy Office. He is a former Boulder County commissioner and Boulder mayor and was director of the University of Colorado Environmental Center.