As Colorado cruises into winter with an already record-breaking snowstorm, it’s important to remember how fortunate we are to have fossil fuel powered electric generation. Lest we forget that last spring, Xcel Energy’s subsidiary in Minnesota forced their customers to turn down their thermostats to 60 degrees during minus 14-degree nights in order to conserve natural gas, which had to be reallocated in order to keep the lights on in Minnesota. The reason for this? The installed solar capacity was producing only 8 to 10 percent of its potential output due to snow cover.
When it is blizzarding outside and temperatures are falling into single or negative digits, I want the inside temperature to be at least 70 degrees – not 60.
If you find yourself in agreement with me, then I suggest you read our latest study that quantifies Governor Polis’s plan for a 100 percent renewable energy standard in Colorado by 2040. We at the Independence Institute’s Energy and Environmental Policy Center are concerned about the financial fall-out of this transition and so decided to quantify his lofty goal ourselves. In our recently released report, we estimate that the cost to keep our lights on, and our houses warm, with an electric grid powered solely by renewables could easily reach $941 billion, or almost half a million dollars per family of four.
To transition to 100 percent renewables, Colorado will have to build thousands of megawatts of wind and solar and hundreds of miles of new transmission lines, in addition to paying for the early retirement of existing fossil-fuel power generators and for wind/solar farm curtailment, siting, and decommissioning. All of this will be expensive, nearing a total of $41.1 billion. However, that amount is minuscule compared to the largest expense—the cost of building the required storage capacity.
As a result of not being able to rely on natural gas generators as backup, to ensure reliability and maintain the quality of life Colorado residents expect (i.e., not curtail their daily electricity usage), the state will have to invest heavily in storage, most likely in the form of batteries.
Hypothetically, utility-scale battery systems can support a 100 percent renewable powered electric grid, but it is a hugely expensive, not to mention risky, method to keep our lights on. We project the necessary battery storage will cost at least $900 billion and probably upwards of $4 trillion, and this figure even considers an anticipated drop in pricing. The final figure will depend on the type of renewable energy generation built, the permitting and interconnection fees, and the expenses associated with operating and maintaining the systems.
But if the ultimate goal is to reduce carbon emissions, then Governor Polis and our elected officials owe it to Coloradans to consider the two alternatives we discuss in the report. The first is building nuclear energy capacity. The second is incentivizing behind-the-meter storage capacity. Both have costs, but both also have benefits—the most noteworthy and bipartisan being that they’ll reduce the power sector’s carbon footprint.
Nuclear power is expensive upfront, but once built, it has the lowest levelized cost of energy (LCOE). Nuclear power plants also employ thousands and provide steady state and local tax revenue. Additionally, nuclear power is a condensed form of energy; a single pellet of uranium the size of a small pencil eraser has the same amount of energy as 17,000 cubic feet of natural gas, 1,780 pounds of coal, or 149 gallons of oil. As a result, a nuclear generator’s footprint is much smaller than a utility-scale wind farm. For example, a 671 MW nuclear power plant in Minnesota sits on 215 acres, whereas a 600 MW wind farm in Colorado sits on 95,000 acres. Building nuclear capacity would also avert millions of tons of carbon emissions.
The second alternative is to build behind-the-meter (residential) storage. It is an expensive route—even if behind-the-meter storage systems makeup only a small fraction of the required battery capacity, the total price could be tens of millions of dollars higher. But, behind-the-meter systems come with avoided costs. There will be less need for new transmission lines, and they will have a smaller environmental impact because they are installed typically on already developed land.
Small scale residential energy generation has an unquantifiable benefit of individual investment and the elimination of wealth redistribution from captive ratepayers to utility shareholders. Individuals or families investing in residential storage are investing in themselves rather than paying a monopoly utility. Said a different way, if people were to purchase and install behind-the-meter storage, they would be laying the foundation for future wealth creation through peer-to-peery energy trading networks or by simply reducing their monthly electricity bills.
Is there an innate problem with utility-scale renewables and battery systems? Theoretically, no. But is there a financial problem? Yes. The total cost of Governor Polis’s goal should raise a red flag in everyone’s conscious. As stated in our report, those of us living in Colorado will be guinea pigs for testing whether or not a grid can be powered solely by renewables. Oh, and it’s going to cost us, aka the guinea pigs, thousands of our hard-earned dollars.
We Coloradans deserve both transparency and a spot at the table to decide how and if we want to actually pursue Polis’ plan. Because if our elected officials don’t allow for at least that, we may realize we can’t afford to keep our lights on and our houses warm in the midst of a freak blizzard.
Brit Naas is an energy policy anlalyst at the Independence Institute’s Energy and Environmental Policy Center.