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Utilities with goals of producing 100 percent renewable energy in Colorado must figure out how to reliably deliver electricity when relying upon resources, primarily wind and sunshine, that aren’t always reliable.

The answer may lie in water, and some of that water may come from Colorado’s Yampa River.

Colorado’s two largest electrical utilities, Xcel Energy and Tri-State Generation and Transmission, are talking about the potential for green hydrogen and other possible storage technologies associated with their existing coal-fired power plants, at Hayden and Craig, in the Yampa Valley. Both plants are scheduled to shut down, with Hayden slated to close by 2028 and Craig by 2030.

Duane Highley, the chief executive of Tri-State, told member cooperatives in a meeting Aug. 4 that Tri-State and the State of Colorado have partnered in a proposed Craig Energy Research Station.

Hydrogen has been described as the missing link in the transition away from fossil fuels. It can be produced in several ways. Green hydrogen, the subject of the proposal at Craig, is made from water using electrolysis. The oxygen separated from the H2O can be vented, leaving the hydrogen, a fluid that can be stored in tanks or, as is in a demonstration project in Utah, in salt caverns. The hydrogen can then be tapped later as a fuel source to produce electricity or, for that matter, put into pipelines for distribution to fueling stations.

How much water will be required to produce green hydrogen isn’t clear. But the Yampa Valley’s existing coal-fired plants have strong water portfolios that could be used to create green hydrogen or another storage technology called molten salt. The latter is the leading candidate at the Hayden plant, co-owned by Xcel Energy and its partners.

Craig Generating Station in 2021 is projected to use 7,394 acre-feet of water, according to a Tri-State filing with the Colorado Public Utilities Commission. By 2029, the last year of coal generation at Craig, Tri-State projects water use will decline to 4,270 acre-feet.

Xcel Energy also has water rights associated with its somewhat smaller two-unit Hayden Generating Station.

When Tri-State first announced last year its plans to close its coal units, some hoped the utility would allow the water to continue downstream, aiding fish and habitat in the Yampa Valley. The Yampa, arguably Colorado’s least trammeled river, since 2018 has been plagued by drought. In early August, water managers placed a call on the middle section of the Yampa River for only the third time ever.

Western Resource Advocates, which works in both energy and water, has supported the green hydrogen proposal. But there’s also hope that a water dividend will still be realized in this transition, resulting in more water available for the Yampa, which is a major tributary to the Colorado River.

“If we do it right, we have the chance to equitably share the impacts and solutions to climate change all across Colorado and the West, with benefits for communities, economies and the environment,” says Bart Miller, director of the Healthy Rivers Program for Western Resource Advocates.

Green hydrogen, similar to wind and solar in the past, has a cost hurdle that research at Craig, if it happens, will seek to dismantle. The federal government’s Energy Earthshots Initiative announced in June hopes to drive the costs down 80% by the end of the decade. That is the program in which Tri-State hopes to participate.

Top, transmission lines from the Craig Generating Station cross the Yampa River in October 2020. Above, the Hayden Generating STation at sunset in March 2020. Photos/Allen Best

Tri-State’s Highley suggested at the meeting last Thursday that the Craig site should swim to the top of the proposals, because it is an existing industrial site, and the Craig and Hayden units also have high-voltage transmission lines. This is crucial. Those lines dispatch electricity to the Front Range and other markets but they can also be used to import electricity from the giant wind farms being erected on Colorado’s Eastern Plains as well as solar collectors on rooftops and in backyards.

In addition, Craig and Hayden have workforces that, at least in theory, could be transitioned to work in energy storage projects.

Western Resource Advocates, in a June 30 letter to the Department of Energy, made note of that consideration. “A green, zero-carbon hydrogen project at Craig Station is an opportunity to demonstrate how the clean energy transition can also be a just transition for fossil fuel-producing communities,” said the letter signed by Erin Overturf, the Clean Energy Program director.

Several state agencies will likely play a role, said Dominique Gomez, deputy director of the Colorado Energy Office, including the Office of Just Transition that was established in 2019 and the Office of Economic Development and International Trade.

At Craig, the vision is “to provide researchers access to the key resources necessary to perform their research, including water, transmission and site space,” Tri-State spokesman Mark Stutz said in an e-mail. “As the initial step, Tri-State and the state plan to engage a group of stakeholders to facilitate the development of the center.”

The Department of Energy has not indicated when it expects to announce the finalists or grant funding.

Water use will depend upon the size of the projects, said Xcel representative Michelle Aguayo in a statement. “It’s important to remember the amount of water used in power generation in Colorado is relatively small, representing 0.3% of water diversion in the state.”

Xcel already participates in a hydrogen pilot project in Minnesota, its home state for operations, and has proposed natural gas plants in North Dakota and Minnesota that are to be designed to use hydrogen technology when it becomes viable and cost-effective.

“As we’ve said before, we’re focused on identifying and exploring technologies that will allow us to bring our customers carbon-free energy by 2050, technologies that are not available or cost effective today,” she said.

This was originally published by Fresh Water News, a service of Water Education Colorado.

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