Colorado electric customers could save $2.5B if coal plants replaced by renewables
If Colorado’s coal plants were replaced with a mix of wind and solar backed by battery storage and natural gas, the switch could save electric customers almost $250 million per year, or roughly $2.5 billion in net present value through 2040, according to a new report from Community Energy.
The study, prepared by Vibrant Clean Energy, also finds that new clean energy resources would cut annual carbon emissions in the state by almost 65 percent over time.
“Colorado has the opportunity to lead decarbonization in the power sector while lowering customer bills by an average of five percent and providing coal-plant owners the opportunity to recover sunk costs associated with retiring aging coal plants,” Eric Blank, founder and strategic lead at Community Energy, said. “The key to unlocking these benefits is to create a legal framework that enables utilities to voluntarily retire the coal plants. Otherwise, it could take years to negotiate or litigate utility cost recovery, replacement power costs, and impact on local communities.”
The significant economic benefit of retiring aging coal plants is primarily driven by the fact that new wind and solar facilities are now less expensive to build than the operating costs of the aging coal fleet. Further, there is an opportunity to recover up to $1.5 billion in undepreciated asset value by the coal-plant owners to facilitate the voluntary phased retirement of the coal plants.
“The Community Energy sponsored study confirms and quantifies what we’ve been seeing elsewhere – wind and solar are now cheaper than the operating costs of many aging coal plants. Colorado is blessed with some of the best solar and wind resources in the country, which should allow for a quicker and a more affordable transition to clean energy,” Chris Clack, CEO of Vibrant Clean Energy, said.
