CEO produced the Strategic Transmission and Renewables (STAR) Report in late 2010. CEO is continuing to enhance that STAR modeling in pursuit of a Balanced Energy Portfolio model.CA key part of the STAR project was the production of a 38-page detailed modeling of Colorado’s electricity sector out to the year 2050. Assumptions for load growth, fuel prices, cost and operating characteristics of new generation, renewable energy penetration levels and environmental compliance used in the modeling are conservative, transparent and defensible. The results indicate a variety of pathways for state electricity sector policymakers to consider.
The driving research question modeled was how Colorado can meet the Colorado Climate Action Plan (CAP) goal of an 80% reduction in carbon dioxide emissions by 2050 from a 2005 base. As the model results indicate, it can be achieved: furthermore, doing so will yield multiple benefits. Colorado’s population of 5 million is expected to grow to 9 million by 2050. A growing population coupled with a return to average historic levels of economic growth results in an imperative that new electric power infrastructure be planned and developed. The modeling results in the need for five key actions to secure Colorado’s strategic electric power sector: more energy efficiency, more utility-scale renewable energy, more high-voltage transmission, less coal-fired generation, and more natural gas-fired generation.
First and foremost, the modeling reveals how essential it is, from economic and environmental perspectives, to moderate the load growth (assumed to grow at 1.7 per cent per year to 2050).
The model selected utility-scale renewable energy as the preferred supply-side resource on the basis of its ability to reduce air pollution, reduce water consumption, and on the basis of being the least cost long-run resource, in large part because renewable energy does not incur fuel costs. However, there are operational limits on the penetration of variable renewable resources, and the model constrained the selection of renewable energy to conform to those operational limitations.
It is well-understood that substantial new high-voltage transmission infrastructure is a linchpin issue that needs to be addressed to enable Colorado to deliver the renewable energy to the markets. Transmission is an enabler that achieves a variety of economic objectives over a very long time period with comparatively minimal operation and maintenance expenses. As has been proven in Texas and elsewhere, the return on investment is fast, and transmission represents less than 10% of the customer’s electric bill.
The model analyzed Colorado’s coal-fired generation fleet, and determined that if the CAP goals are to be met, coal units should be retired when they reach the age of 45. Should the units not be retired and replaced at age 45, Colorado’s electricity sector will experience increasing operation and maintenance costs, and public health will be compromised.
Of critical importance, the state must expand deployment of efficient natural gas-fired generation. The nation’s natural gas supply has been expanded considerably in recent years, and price forecasts provide a greater confidence in price stability compared to the price volatility experienced over the past three decades. Gas-fired generation is particularly beneficial due to its unique ability to integrate variable renewable resources, while serving as a baseload resource.
The model assumed that by 2017 research and development activities will result in commercially available natural gas advanced combined cycle plants with 90% carbon capture and sequestration. These plants were assumed to have a lower capacity cost and lower operating cost than new conventional coal-fired generating stations without carbon capture and sequestration.