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Xcel Energy receives shockingly low bids for Colorado electricity from renewable sources
Solar and wind generation with storage now competitive with coal power
The Denver Post file
This is a file photo of Xcel Energy employees working on a utility pole on Stanford Avenue in Englewood.
By Aldo Svaldi |
asvaldi@**********.com | The Denver Post
PUBLISHED: January 16, 2018 at 8:13 pm | UPDATED: February 1, 2018 at 3:13 pm
Renewable-energy developers have offered to supply Xcel Energy with electricity at the lowest prices quoted in the U.S., including solar and wind options with energy storage priced below what coal-generated power in the state costs.
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“The response was amazing.The world is our oyster. It was like walking into a Las Vegas buffet,” said Erin Overturf, chief energy counsel for Western Resource Advocates, one of several environmental groups that want the utility to reduce its dependence on coal.
Xcel last year estimated it would need 450 megawatts of additional generation to meet future demand under its 2016 Electric Resource Plan.
In August, Xcel and several other parties reached an agreement known as the Clean Energy Plan to shutter two older coal plants in Pueblo, but only if lower-cost alternatives could replace their 660 megawatts, including the added costs involved with shutting the plants down 10 years early.
Backers of the plan estimated Xcel’s Colorado customers would save $175 million if wind bids came in at $20 megawatt hour (MWh) and solar at $30/MWh, Overturf said.
What they didn’t count on was how many bids would come in from the Nov. 30 solicitation, more than 430, with 350 just for renewables, or how low they would come in. Wind-only bids had a median price quoted of $18/MWh, meaning half of the bids were below that. Solar only came in at a median price of $29.50/MWh.
Wind costs less than coal, and solar has more recently become cost competitive. But both sources are intermittent, meaning they either need storage, such as batteries, or more reliable generation sources such as coal and natural gas to fill in the gaps.
What stands out about the response Xcel received is that wind sources with storage are now cheaper than coal generation, and solar plus storage is now cheaper than about 75 percent of coal generation in the state, according to CarbonTracker.
“As far as we know, these are the lowest renewables plus storage bids in the U.S. to date. The previously lowest known solar plus storage bid price was $45/MWh in Arizona in May 2017,” wrote Matt Gray, a senior utilities and power analyst with Carbon Tracker.