5 min read
18 Jun 2019
5 min read
18 Jun 2019
Colorado Governor Jared Polis’ commitment to transitioning his state to 100% renewable energy by 2040 would yield a range of benefits for his state. However, there are challenges to be surmounted - read on to learn about how Colorado is working towards a smart clean energy transition.
Newly-elected governor Jared Polis – who ran on an ambitious climate change platform, including transitioning his state to 100% renewable energy – has called it as much himself. Should Colorado achieve this goal, it’ll leapfrog the other U.S. states transitioning to clean energy, most of whom have targeted the mid-2040s to complete their renewable energy transitions. Based on stakeholders’ responses there is much excitement, tempered with some trepidation, around this vision.
State Rep. Chris Hansen, whose constituents have been vocal in expressing their support for renewable energy and concerns about climate change, speculates that the state’s broad public support for clean energy is because “Colorado is a place where people can see the impacts of climate change very easily. It shows up in snowpack, water availability, and more. This has meant more consensus and support for clean energy.”
president and CEO of Holy Cross Energy, the first Colorado electric utility to announce ambitious clean energy goals, predicts that Colorado residents and businesses can look forward to improvements in local air quality, new jobs in the clean energy
sector, and opportunities to start new businesses in the clean energy space.
However, Rep. Hansen continues, despite Coloradans’ enthusiasm for renewables, price and business-friendliness remain first-order concerns. He says, “The average citizen – the average electricity customer – thinks at a fairly high level that they’d like to see cleaner energy, cleaner air, and cleaner water without their bills going higher. They want to see change happen quickly, without affecting competition and business-friendliness in the state.”
Philip Rutkowski, Regional Director of Wärtsilä’s North America Business Development and Sales team, adds, “Utilities have a three-pronged problem: reliability is their biggest, most important issue, followed by cost, and then public perception. Utilities have to convince the public that they’re being as clean and renewable as possible while maintaining reliability.”
In an April 2019 report commissioned by the Colorado AFL-CIO, the Political Economy Research Institute (PERI) at the University of Massachusetts Amherst estimated that about USD 2.7 billion per year in energy efficiency investments from 2021–2031 and USD 11.8 billion per year in clean renewable investments over the same time period would be needed to achieve the goal of a 100% renewable electricity supply by 2040.
By these estimates, total annual clean energy investments in Colorado would come out to USD 14.5 billion a year, assuming the state’s economy grows at an average annual rate of 2.4% over that period. Based on these figures, PERI estimates that USD 2.7 billion in energy efficiency investments would create around 29,403 direct, indirect, and induced jobs each year; and USD 11.8 billion in clean renewable investments would create around 81,538 direct, indirect, and induced jobs each year.
Mark Dyson, a principal in the Rocky Mountain Institute’s Electricity Practice, notes that in communities that previously relied on coal industry
jobs, this transition necessarily “will involve a change in employment and local economic drivers” for previously coal-dependent areas. However, new opportunities also arise thanks to the growth of the renewable energy industry. Dyson
points to Xcel Energy’s plan in Pueblo, Colorado – where the company is reinvesting some of the avoided operating costs from replacing two of its Comanche coal units with USD 2.5 billion in renewables and battery storage into job retraining
and economic development opportunities for workers and the community – as a model for transitioning to renewables without leaving people behind.
Across Colorado, utilities are testing a range of technologies and operating models for transitioning to renewables. Rutkowski says this makes Colorado a great proving ground for Wärtsilä’s technology, as the state is unique in having a mix of technologies across a large number of utilities, making it like “a lab of utilities” that can demonstrate new technologies and best practices to each other. Thus, Rutkowski says, “There are lots of opportunities [for utilities] to learn from each other and help get each other up to speed on what Wärtsilä can offer. We’ll wait to see who’ll take Wärtsilä up on our technology.”
Rutkowski adds that Wärtsilä’s technology and already-deployed capacity in North America make it the “ultimate backstop” for utilities. He says, “If utilities can get their energy through 100% renewables, that’s great and they’ll never need us. But if they do need a backup, we’re there. The fact that we have close to four gigawatts installed and operating in North America says to utilities, ‘here’s a viable solution we can use.’ If we don’t run that often because the renewables are doing their job, that’s good too.”
Given the Rocky Mountain Institute’s perspective on what a 100% renewable energy future means, Dyson isn’t so sure flexible generation is necessarily the path forward. While he says that increasing recognition that flexibility is “the new currency of the energy grid across the country” is a positive, he also points out, “The flexibility that you get from a gas project comes at an operating cost and a risk. Gas prices are currently low, but volatile and subject to risk from future carbon legislation. There are a number of studies showing, depending on what you believe gas prices will be in future, that the energy you’d get from gas will be obtained more inexpensively via batteries or other generation.” He adds that Western states will eventually have to work together to improve transmission, potentially eliminating the need for flexible generation.
Rutkowski, from Wärtsilä, seconds Dyson’s comments about the new transmission improvements and how they “will improve the reliability of the overall electric grid” but also emphasises that regardless of natural gas prices “which by most estimates look to remain flat or drop in price in the foreseeable future” according to Rutkowski. “A flexible resource like a Wärtsilä plant, which has a fantastic simple cycle heat rate, and allows the customer to ‘only turn on those engines that it needs and turning them off as soon as they are not needed’,” allows customers to minimise their operating costs and risks.
However, if Colorado achieves its clean energy goals, there’s a broad consensus that it’ll benefit the state. Rutkowski says clean energy gives Colorado to showcase itself as a place that says, “we are the way of the future” and demonstrate that it cares about the environment. This, he says, will help the state appeal to younger, educated workforce and attract businesses. As Colorado ramps up its renewable energy investments to transition to cheaper, cleaner energy sources, ordinary residents and businesses can expect low-cost energy that they feel good about as well as improvements to their surrounding environments.