The winds of change are talking in Colorado. A new study found that by ending power from aging, costly coal-fired power plants in the state, it could save electric consumers in the state $2.5 billion through 2040, while slashing emissions from electric generation almost 65 percent.
“Colorado has the opportunity to lead decarbonization in the power sector while lowering customer bills by an average of five percent and providing coal-plant owners the opportunity to recover sunk costs associated with retiring aging coal plants,” said Eric Blank, founder and strategic lead at Community Energy. “The key to unlocking these benefits is to create a legal framework that enables utilities to voluntarily retire the coal plants. Otherwise, it could take years to negotiate or litigate utility cost recovery, replacement power costs and impact on local communities.”
The new study from Vibrant Clean Energy and commissioned by Community Energy found that replacing coal plants in the state with wind and solar along with energy storage and natural gas power would save Colorado electric customers almost $250 million per year between now and 2040. The study used findings from recent utility commission filings in the state, which show that it’s now cheaper to build new wind and solar power facilities than it is to get power from coal plants.
“The Community Energy sponsored study confirms and quantifies what we’ve been seeing elsewhere—wind and solar are now cheaper than the operating costs of many aging coal plants. Colorado is blessed with some of the best solar and wind resources in the country, which should allow for a quicker and a more affordable transition to clean energy.”
It seems Xcel Energy, the largest utility in the state already knows this, as last year it announced it would move to 100 percent carbon-free energy not just in Colorado, but across all its states by 2050. In making the announcement in Denver in December, Xcel said that it’s making the move because of the low costs of renewable energy and customer demand, among other reasons.
Other utilities are making similar moves. Last month Berkshire Hathaway’s NV Energy announced that it would add in 1,001 megawatts of renewable energy and 100 megawatts of energy while retiring a coal plant four years early.
The new report from showed that coal plant owners could recover up to $1.5 billion in undepreciated asset value under a voluntary phased retirement of the coal plants as well. In calculating the recovery value, the study looked at the approach adopted in the recent Colorado utilities commission’s approval of retiring two coal units in Pueblo, Colorado early.Tweet