How Colorado’s largest utility plans to get to 80% renewables by 2030
by Allen Best
Comanche 3, the newest coal-fired unit in Colorado, will be the last to close, at least if Xcel Energy has its way.
Xcel, the majority owner of the plant, announced Wednesday that it wants to continue operating the plant until 2040, but at a third of its operating capacity after 2030.
Maybe it will, but Xcel has some answering to do in months ahead when it will be forced by state regulators to defend the erratic operations of the troubled coal plant. Comanche 3 has been down for repairs for a third of the time since it began operations in 2010, including most of the last year.
Alice Jackson, chief executive of Xcel’s Colorado subsidiary, defends Comanche 3 as having several vital functions. It has, when operating, provided power at a low cost, and it will continue to provide jobs in Pueblo and a tax base in Pueblo County, easing the transition to clean energy.
But the plant also can provide important generating certainty. Xcel, says Jackson, believes the costly repairs are a thing of the past. And if the plant were retired, the generating capacity would have to be made up elsewhere—and not necessarily with renewables.
“This gives us the opportunity to allow technology to advance to get to net-zero,” she said.
And despite the troubled coal-mining operations in Wyoming and elsewhere, she said Xcel is confident of deliveries needed to supply Comanche with fuel.
Xcel is hurrying along the decarbonization path. The singular statistic coming out of a preview of the plans the company will be submitting to Colorado regulators in March is electrical generation by 2030 that will consist of 80% renewables. That’s 85% reduction in carbon emissions as compared to 2005, an improvement of 5% from the goal announced by the company little more than two years ago.
It proposes to achieve this new low-carbon mark by converting the Pawnee plant near Brush from coal to natural gas by 2028. Earlier this year it announced plans to close its two units at Hayden, one unit in 2027 and the next unit in 2028. It had previously announced plans to close Comanche units 1 and 2 in 2022 and 2025 respectively.
These plans were announced at a press conference that also included cameos by Gov. Jared Polis and representatives of unions and a leading environmental organization after opening remarks by Ben Fowke, the Minneapolis-based chief executive for Xcel Energy.
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Fowke sought to embellish Xcel as a leading utility in decarbonization in Colorado and beyond. At least 20 other major utilities have followed in Xcel’s decarbonization footsteps since the company’s 2018 attention-grabbing announcement.
Technology has allowed this decarbonization, Fowke said, but stakeholders have clearly said they want it. And the direction of the marketplace is clear, he added, as it “greatly rewards companies that do and quite frankly punishes those that do not.”
As it retires coal plants, Xcel proposes to add 2,300 megawatts of wind power, 1,600 megawatts of large-scale solar power, and 400 megawatts of energy storage. The company also proposes 1,300 megawatts of distributed generation solar resources, such as community and rooftop solar.
All this, said Polis, represents an alignment of economic, environmental, and public health benefits.
“Xcel is showing that this transition to renewable energy can be done in a way that not only saves people money and creates green jobs, but that it also reduces air pollution in Colorado and Colorado’s contribution to climate change.”
But Xcel also proposes to add 1,300 megawatts of natural gas, either through construction of plants or acquisition of existing capacity. However, it plans to end 1,400 megawatts of existing natural gas, either through retirement or allowing contracts to lapse.
Still, this was a red flag to at least the Sierra Club. “Xcel has done a great job marketing itself as a climate leader without actually being one. Xcel can either be a climate leader or it can plan to waste more money on gas and keep burning coal,” said Anna McDevitt, the Sierra Club’s Beyond Coal Campaign representative in Colorado.
Western Resource Advocates was largely supportive of the proposal. Jon Golden-Dubois, president of the organization, said Xcel is actually aligning its investments to correspond with its goals. Other utilities have followed Xcel’s lead in setting goals, he said, and “now it’s time for those same utilities to come to the table where Xcel is with concrete actions to align with their words.”
But there are questions in the particulars that the Colorado PUC will likely be asking during the next year. Erin Overturf, deputy director of the Clean Energy Program at Western Resource Advocates, said commissioners should be thoughtful about how to avoid stranded costs. Will a gas plant constructed in 2028 be justified if, for example, a Biden Administration succeeds in its announced goal of cleaning the nation’s electric grid completely of carbon by 2035.
Overturf suggested that when Xcel solicits resource capacity, the answers to the perceived needs may not necessarily lead to natural gas in the same way that Xcel models have indicated will be necessary.
She also noted that having a natural gas plant doesn’t mean that it will be used, except at pinch times, such as to meet peak demands or as backup when renewables fail to deliver, such as during the mid-February deep chill. Wind turbines were idled then, even those winterized to -22 F, because there was little to no wind.
Jackson, in an interview after the press conference, didn’t defend natural gas as the bridge fuel without end. She spoke about hydrogen and ammonium-hydrogen blend, storage medium that would allow utilities to harvest and then store renewable energy for lengthy periods, something not possible with existing lithium-ion batteries. They have a storage capacity of four hours.
“There’s a lot of thinking in that area right now, just as there was a lot of interest in wind and solar 10 and 15 years ago,” she said. “So there’s a lot more to come. This is where we need to be now,” she said of the natural gas—and coal—component.
For now—if Xcel’s announced plan plays out—the 750-megawatt Comanche unit will stay in play, even if in diminished capacity.
Colorado’s largest coal plant, it was controversial when approved by state regulators in 2004. Opponents in 2003 told state regulators that it was an investment in a soon-to-be-outdated technology, that wind in particular was coming on. PUC commissioners were unpersuaded and approved the $1 billion plant, most of which remains to be paid for.
Members of the Colorado PUC in May unanimously agreed that an investigation was needed into whether continued investment in Comanche 3 was justified, given its frequent need for repairs. The PUC made that decision formal in October. The report is due to PUC members in the next few weeks.
In January, shortly after Comanche 3 resumed operations after being off-line for much of the prior year, an organization called Institute for Energy Economics and Financial Analysis issued a report that concluded that closing the plant was the best thing for ratepayers. The plant was originally expected to continue operations until 2070.
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