An analysis of the economic impacts of Xcel Energy’s proposed Rush Creek Wind Project indicates that the proposed investment in wind generation would produce net economic benefits for the state of Colorado. The study was prepared by the Leeds School of Business and funded by Xcel Energy.
Investing in 300 wind turbines made in Colorado that collectively produce 600 megawatts of wind energy would reduce “future generation of electricity using gas-fired and coal-fired resources.” Along with investments “in purchasing and erecting the wind turbines, the project will include the creation of access roads, pouring of foundations, installation of transmission lines, and construction of substations.” In total, the study projects that these investments will result in a projected net increase of 7,136 jobs (Table 1, page 6) in Colorado.
Reductions in operating expenditures, “notably – fuel costs,” will result in lower revenue requirements for Colorado ratepayers as wind generation lowers the projected revenue required to generate electricity by 0.7% (Table 3, page 12). From 2016 through 2040, the study projects that the combination of these savings for consumers and investment in renewable generating capacity will increase Colorado’s projected GDP by over $1 billion (Table 1, page 6).
You can access the full study here.
Today Xcel Energy reported first quarter net profits of $241 million dollars, a sharp increase over first quarter 2015 net profits of $152 million, putting the Minneapolis-based company on track for yet another year of roughly $1 billion dollars in net profits.
Colorado communities typically account for between 40% to 50% of Xcel’s net profits (see page 8 of Xcel’s latest annual report). 2015 was no exception. Last year, Coloradans sent over $468 million in net profits alone to Xcel, 47% of Xcel’s $984 million 2015 net profits on electricity and natural gas sales (see page 34 of Public Service Company of Colorado’s 2015 annual report).
A decade ago, Coloradan’s sent Xcel only $214 million in net profits (see page 23 of Public Service Company of Colorado’s 2006 annual report). In other words, in a span of 10 years, Xcel’s net profits from Colorado have more than doubled. A significant portion of that growth can be attributed to the combined expenditures of approximately $1.5 billion on aging coal plants on which Xcel receives both “return of” and “return on” those expenditures. Indeed, Xcel’s 2015 annual report states that increased net profits in 2015 were he “primarily due to the [Clean Air Clean Jobs] rider.”
In Xcel’s last report to the city of Boulder, Xcel stated that Boulder accounted for about 5% of its revenues (see item 9 on page 11 of Xcel’s 2010 report to the Boulder). Assuming that’s still the case (and that Boulder has a proportional contribution to Xcel’s net profit), approximately $25 million in after tax net profits alone was sent from Boulder to Xcel in 2015.
Imagine what Boulder – and Colorado – could do if a larger percentage of those millions of dollars remained closer to home, creating jobs and building a renewable energy-dominated 21st-century utility. Instead, Coloradans dollars are literally going up in smoke (Colorado spent roughly $250 million burning coal at Xcel plants in 2014, according to the Energy Information Administration’s Form EIA-923 fuel cost data) or heading off to Minneapolis to pay for Xcel’s expenditures on coal plants.
Colorado Senate Committee Kills Bill that Would Strengthen Climate Plan
A bill to require Colorado’s Climate Plans to include specific, measureable goals, deadlines, and annual reports on the state’s progress in reducing emissions was killed in the Senate Agriculture, Natural Resources, and Energy Committee last month.
While state law requires Governor Hickenlooper to publish a “Climate Action Plan” annually, his 2015 Climate Plan took “action” out of both the plan’s title and its contents. Proposing no new initiatives, the plan is a step backward for emissions goals, climate initiatives, and renewable energy in Colorado.
With Colorado’s leaders dodging responsibility for reducing greenhouse gas (GHG) emissions, Clean Energy Action decided to take a closer look at these emissions and exactly how they’re generated.
Where do GHGs come from?
It is widely known that activities like burning coal to produce energy and burning gasoline to power cars release carbon emissions into the atmosphere. But to be effective at fighting climate change, both the relative and total impacts of all industries must be considered. For example, natural gas was once touted as a “bridge fuel” which could help the United Statestransition to a renewable energy future, but now many question whether this would generate less harmful emissions.
While the focus of most environmental groups is on reducing combustion of fossil fuels (for good reason—it makes up almost 85% of emissions), industries like agriculture and manufacturing also have significant impacts. In order to uphold the climate agreement adopted at the United Nations Framework Convention on Climate Change (UNFCCC), plans to mitigate climate change must prioritize the most impactful GHG sources but also make inroads into limiting carbon emissions from diverse sources.
GHG inventories, which estimate the amount of emissions generated by various GHG sources in a region, have been performed at the national level as well as in some states and cities to inform climate initiatives and set a baseline for measuring changes in emissions levels.
Although every region has unique emissions which reflect the prevalence of different GHG sources, here we look at inventories done in the City of Boulder and the State of Colorado in addition to the entire United States. The Boulder and Colorado emissions generally reflect national trends but vary slightly based on local economic activity. For example, Boulder has no contributions from industrial complexes because they are simply not present in the city. Natural gas mining and distribution systems contribute a large fraction of Colorado’s emissions because Colorado is one of the major natural gas-producing states in the country.
At the national level, the primary GHG sources are:
- The combustion of fossil fuels for the generation of power and heat and combustion of fuel for transportation. Together these make up almost 85% of U.S. GHG emissions and additional GHG emissions occur during the extraction, production, and transportation of fossil fuels. Currently, inventories predict that these contribute somewhere between 3%-10% of total emissions but the scientific community has raised concerns that actual emission rates from these activities are much higher.
- The agricultural industry. Agriculture produces about 7.5% of national GHG emissions, mostly through the release of nitrous oxide from fertilizers and methane generated by enteric fermentation in cattle.
- Industrial complexes. Non-energy-related industrial activities like processing raw materials to make iron, steel, and cement generate over 6% of U.S. pollutants.
- Waste management. A small percent of GHGs are released during transportation, combustion, and decay of waste materials.
- Better reporting: The system of reporting responsibility for GHG emissions by adding up the emissions of the sources in a region has been criticized because it does not account for the impact of outsourced industrial activities. Many argue that consumption-based inventories which follow the purchases made by consumers to calculate the total carbon footprint of a population are more accurate tools for determining the effectiveness of climate mitigation policies and responsibility for GHG emissions than production-based accounting. For example, if you buy a product that was manufactured in China in a factory powered by burning coal and then shipped to the United States, current GHG inventories would show that China, not the United States, was responsible for the emissions associated with the manufacturing of your product. However, a consumption-based inventory would attribute all of the emissions associated with the production and transportation of the item to the region of the consumer that purchased it.
- More frequent inventories: The data used in the most recent U.S. GHG survey was collected in 2013 and inventories at the state and local levels were performed even less recently. Energy markets have shifted drastically in the last few years, so these inventories are already obsolete. For example, natural gas production has gone up significantly compared to coal production since the data was collected and thus emissions due to natural gas are almost certainly underrepresented in this report.
- Better measurements: Currently, the quantities of raw materials consumed in a region are reported by local companies and multiplied by combustion efficiencies published by the EPA to determine the total emissions of the region. This top-down method of calculating emissions from numbers reported by individual companies has several significant sources of error including reporting errors and deficits, inaccurate combustion efficiencies, and inability to calculate emissions generated during the extraction and transportation of fossil fuels. The most accurate means of quantifying emissions is to directly measure the pollutants at a site. This ground-up approach is currently too expensive to implement on a large scale but may soon be feasible.
While the UNFCCC requires that countries report their GHG emissions annually, it allows them to report data that is two years old which can lead to outdated emissions data at the national level. In the United States, there is no federal legislation requiring states to perform GHG inventories so little or no information is available on the emissions in many states. For example, Colorado’s most recent GHG inventory was performed to fulfill an executive order by Governor Ritter in 2013 but it used data from 2010 which is now decidedly outdated. Legislation requiring GHG inventories to be performed regularly at both state and national levels would help environmental advocates understand the importance of various GHG sources.
While ground-up measurements and consumption-based reporting are currently expensive and infeasible, they remain the gold standard for assessing emissions. We should continue to work toward developing the technology and global cooperation required to implement them.
Although current GHG inventories aren’t perfect, they provide valuable insights into the relative importance of various GHG emitters at the local, state and national level. They provide information that should guide environmental initiatives to maximize their impact.
Thank you to everyone who attended and participated in Clean Energy Action’s second annual Community Energy Fair! This year’s Fair was a huge success, drawing hundreds of people and raising thousands of dollars to support clean energy.
Participants enjoyed a prestigious speaker lineup, cookies baked in a solar oven, electric vehicles on display, opportunities to take action for a wide range of causes, and more.
** 2016 SPEAKER LINEUP **
9:00 AM Martin Ogle- “Fire and Photosynthesis; Our Energy Future”
Founder, Entrepreneurial Earth LLC; Chief Naturalist, No. VA Regional Park Authority, 1985-2012; long-time energy educator
9:30 AM Russell Mendell- “Yes for Health and Safety Over Fracking – CO Ballot Initiatives 75 and 78”
Clean energy advocate and activist working with Coloradans Against Fracking, Earth Guardians and other organizations
10:00 AM Dr. James White- “Climate Change: What’s happening now, and what’s to come”
11:30 AM Hunter Lovins- “Triumph of the Sun Revisited: It’s Over, Renewables Win”
12:30 PM Ken Regelson-“100% Renewables-Let’s Go!”
1:30 Dr. Kevin Trenberth- “Our planet is running a fever: global warming is happening”
2:30 Luke Straka- “Climate, Health, and the Latino Community”