Natural gas push saddles West Slope with false hope

January 23, 2018

Colorado, renewable energy


Xcel’s predictions for changes in its energy mix under a new proposal. [Source: Xcel Energy]

Push for natural gas overlooks economic realities, opportunities

Guest post by Jeremy Nichols
Climate and energy program director for WildEarth Guardians
[Reposted with permission]

Mesa County commissioners are clamoring for a new natural gas power plant on the Western Slope, but their push for more fossil fuels stands only to block affordable clean energy and saddle the region with false economic hopes.

As the Sentinel recently reported, the commissioners called on Gov. Hickenlooper to urge Xcel Energy to build a new gas-fired power plant in the Piceance Basin. In a letter to the Governor, the commissioners claimed a gas plant would be an opportunity to create economic prosperity in rural Colorado.

If only this were true.

The reality is, the prospect of a new natural gas-fired power plant being built anywhere in Colorado isn’t likely. The reason is simple: cost. Xcel Energy’s own reports confirm this.

Earlier this month, the company released a report on bids it received for new energy projects to power Colorado. In the words of Xcel itself, the bids were “unprecedented.”

Consider that while the company received a little more than 3,000 megawatts in bids for new gas-fired generation, they received nearly 53,000 megawatts in bids for new wind and solar.

More importantly, these renewable energy bids absolutely crushed fossil fuels on affordability. The median bid for new wind projects was $18.10 per megawatt-hour. Utility-scale solar came out at $29.50 per megawatt-hour.

At the low end, the cost of new natural gas-fired electricity generation is reported to be $42 per megawatt-hour. That’s according to the financial advisory firm, Lazard, who every year releases a “levelized cost of energy report,” a detailed analysis on the overall costs of energy generation.

To emphasize, Xcel Energy has bids in hand right now to build new wind for less than half the cost of gas and new solar for three fourths the cost of gas.

The big news from Xcel’s report, however, was on the cost of storage. Wind and solar can be variable, requiring storage (i.e., batteries) to make these sources more reliable and dispatchable. When storage costs were added to wind and solar, the median bids ranged from $21.00 per megawatt-hour to $36.00 per megawatt-hour.

To doubly emphasize, Xcel Energy has bids in hand to build new wind and solar, and add storage, at a median cost that’s 50 to 85 percent cheaper than natural gas.

Given all this, Xcel would be crazy to invest in any new natural gas fired electricity generation.

And given this, Mesa County would be crazy to not be clamoring for Xcel to build new wind and solar on the Western Slope. Unfortunately, the commissioners are putting their weight behind natural gas and shunning renewables, as well as the jobs, infrastructure, and the new energy they stand to bring.

If it’s economic prosperity for rural Colorado that Mesa County Commissioners want, more gas is not even close to a solution. The real opportunity for Colorado’s Western Slope is to reap the rewards of renewable energy.


For more information

Daily Sentinel: Push broadens for natural gas-fired power plant on the Western Slope

Mother Jones: Renewable Energy Is Kicking Ass in Colorado

Post Independent: GarCo commissioners push for Xcel plant on Western Slope

Denver Post: Xcel Energy receives shockingly low bids for Colorado electricity from renewable sources

Denverite: Xcel wants to double renewable energy production in Colorado by 2026

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