Policy Documents

How Less Became More...: Wind, Power and the Unintended Consequences in the Colorado Energy Market

Bentek Energy, LLC –
April 16, 2010

Sometimes things are not what they seem.  Nowhere is this more evident than in the realm of state and federal energy policies.  In 2004, Colorado became the 17th state to adopt renewable energy standards when voters passed Amendment 37. Colorado reaffirmed its commitment to wind and solar energy in 2007 when the state legislature passed HB 1281, increasing the requirement for utilities to purchase  renewable energy by 100%, and byadopting the Climate Action Plan in which renewable energy plays a central role in the state’s strategy of reducing “greenhouse gas emissions by 20% below 2005 levels by 2020." The expected environmental benefit of these measures is perhaps best summarized in this quote from Environment Colorado:

“Smog and air pollution continue to plague much of Colorado and part of the problem is caused by coal-fired power plants. Requiring a modest 10 percent of our electricity to come from renewable energy sources is equivalent to eliminating the pollution from 600,000 cars per year, thereby reducing smog and easing costly health problems.”

According to advocates, renewable energy will not only be a major tool to reduce our carbon output, but also, by displacing coal and natural gas, renewable energy will reduce smog and other air pollution, presumably by reducing sulfur dioxide (SO2) and nitrous oxides (NOX), principal components of ozone and smog.

This report, sponsored by the Independent Producers Association of Mountain States, concludes that the emissions benefits of renewable energy are not being realized as planned based on examination of four years of Public Service Company of Colorado (PSCO) operational history.  Integrating erratic and unpredictable wind resources with established coal and natural gas generation resources requires PSCO to cycle its coal and natural gas-fired plants. Cycling coal plants to accommodate wind generation makes the plants operate inefficiently, which drives up emissions.  Moreover, when they are not operated consistently at their designed temperatures, the variability causes problems with the way they interact with their associated emission control technologies, frequently causing erratic emission behavior that can last for several hours before control is regained.  Ironically, using wind to a degree that forces utilities to temporarily reduce their coal generation results in greater SO2, NOX and CO2 than would have occurred if less wind energy were generated and coal generation were not impacted.

An analysis of the Electric Reliability Council of Texas (ERCOT), which also operates under a mandate to use renewable energy, validates the emissions findings for  PSCO.  The underlying problem is the same for both PSCO and ERCOT: the generation capacity of wind resources has become too large relative to the capacity that is available from coal and natural gas facilities.  Natural gas-fired combustion turbines and combined-cycle facilities are designed to accommodate cycling.  Because gas resources are insufficient to offset all of the wind energy produced in PSCO and ERCOT, coal units must be cycled to counterbalance the amount of wind that cannot be offset by natural gas.  As a result, when the wind energy is generated at a high enough rate, PSCO is forced to scale-back generation from its coal-fired resources.   But, coal equipment is not built for cycling. Coal boilers are designed to be operated as a base load resource – in other words, to operate at a consistent output level all the time.  Cycling causes coal units to operate less efficiently and reduces the effectiveness of the environmental control equipment, substantially increasing emissions.

The results of this study help explain why PSCO’s coal-fired plants located in the Denver nonattainment area have experienced an increase in SO2, NOX and CO2Figure I-1over the past few years.  below shows the change in emissions generated at the plants in proximity to the Denver non-attainment area  – Valmont, Arapahoe, Cherokee and Pawnee, and the Comanche plant located outside of Pueblo.  Between 2006 and 2009 despite the introduction of over 700 MW of wind energy, all of the Denver area plants except Cherokee show higher levels of SO2, all show higher levels of NOX and all but Pawnee show higher levels of CO2.  The Cherokee plant switched to a lower sulfur coal in 2008, thus, even the lower SO2readings at that plant cannot be attributed to the benefits of wind energy.  Furthermore, during the 2006-to-2009 period, generation from the non-attainment area plants fell by over  37%, which makes the increase in emissions even more significant particularly in light of the EPA’s announced intent to mandate tighter restrictions on SO2 and NOX emission levels by 2011.