Submitted by Leslie Glustrom
In 2009 Xcel’s modeling showed that adding renewable energy to their system would lower system costs when a cost for CO2 emissions was added for fossil fuel resources.
Now, in the (attached) modeling results received from Xcel, the three most competitive wind bids received in January 2011 and discussed in the attached Xcel Bid Report, will lower Xcel’s system costs in Colorado–even without including a cost for CO2 emissions. To the best of my knowledge, this is the first time that this has been shown in Colorado.
The key spreadsheet showing this is LWG 2-1.Al. xls. The question asked can be found in the 10A-377E LWG 2 document. The fact that no cost on CO2 was included is found in footnote 3 on page 15 of the Xcel witness Kurt Haeger’s Rebuttal testimony which is also attached.
Under the assumptions tab in the spreadsheet, note that the cost of coal is assumed to stay essentially flat for the next 30 years, despite the fact that Xcel’s coal costs have been going up about 10% a year for the last several years….A more reasonable assumption about future coal costs would also help improve the modeling results for renewable resources. Similarly, if the actual cost of natural gas is higher than the projections shown, then the wind will save ratepayers more money. The natural gas cost projections are some of the lowest used by Xcel in recent years so it seems unlikely that natural gas costs will drop lower than the projections–but only time will tell.
The wind modeling results (which include the Production Tax Credit for wind), show what we have all been waiting for, which is that renewable energy sources can increasingly be justified on price alone–even without consideration of CO2 and other external costs. This bodes well for efforts to include more renewable energy in the future.
|2011 Wind RFP Bid Evaluation Report||1.8 MB|
|Attachment LWG2-1.A1||41 KB|
|10A-377E Haeger Rebuttal||512 KB|
|10A-377E LWG2||61 KB|
Photo courtesy of martinpro