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Colorado Will Need Significant New Energy Resources by 2025

DENVER, CO -- A new study concludes that Colorado will need to build a significant number of power plants in the next 18 years, in addition to aggressively building new renewable energy facilities and ramping up energy conservation efforts, in order to meet the state’s anticipated growth in demand for electricity. The study, done by the Colorado Energy Forum (CEF), a non-profit, non-partisan think tank, concluded that even if Colorado fully meets the requirements of the new Renewable Energy Standard (RES) law passed by the Colorado Legislature earlier this year, the state will still need to build additional generation capacity or conserve energy to satisfy the need for an additional 3,700 to 4,500 megawatts of power.

“The CEF expects that these requirements will be met through a combination of increased energy efficiency, renewable resources, emerging generation technologies and conventional generating resources,” according to the study, which can be found here. That conclusion is based on earlier analysis by the CEF, issued in September 2006, which found that Colorado must add approximately 4,900 MW of new generation resources or conservation by 2025 in order to meet anticipated customer electricity needs. Colorado’s investor-owned utilities are now required under the RES law to obtain 20 percent of their electricity from renewable sources such as wind and solar by 2020. Large municipal utilities and rural electric cooperatives must achieve a renewable energy goal of 10 percent by 2020.

The top lines of both graphs show that Colorado will need 4,900 of additional capacity by 2025. The lower line on the left graph shows that renewable resources required under the RES contribute over 1,100 MW by 2025 under the high capacity credit case. The right graph shows that renewable resources contribute over 300 MW by 2025 under the low capacity credit case. The gap must be met with additional resources such as energy efficiency, more renewables, emerging generation technologies, and conventional generating resources. The CEF analysis estimated that more than 3,300 MW of wind generation and nearly 200 MW of solar generation must be deployed in order to meet Colorado’s RES. However, after taking into account the intermittent nature of many renewable energy resources, especially wind and solar, a gap in needed power supplies of between 3,700 and 4,500 megawatts will still exist.

“When taking into account the intermittent nature of wind and solar resources, we estimate that the reliable capacity credit for these renewable resources ranges between 330 MW and 1,122 MW,” according to the study’s authors. “This means that even after the requirements of Colorado’s RES are met, significant amounts of new electric generating capacity still will be required to meet the state’s needs. Based on the assumptions and data in this study, Colorado will need to address additional resource needs in the range of 3,700 MW to 4,500 MW by 2025.” Bruce Smith, Executive Director of the CEF, said: “This is a realistic assessment of what will be required in Colorado in order to maintain the reliability of our electric system. In other words, this is what we have to do in order to ‘keep the lights on’ as we move toward an aggressive build-out of our abundant renewable energy resources.” “We are also going to have to build hundreds of miles of new transmission lines in order to maintain system reliability,” Smith said.

“Building this new power generation and the electric transmission to deliver that power to consumers is absolutely critical to ensuring that Colorado’s economy remains competitive and vibrant into the next decade and beyond,” Smith added. The CEF took “no position” on how new resource needs should be met but believes it is important to understand the effects of the RES in the context of the state’s overall future electricity requirements. “Higher electricity rates could make the Colorado economy less competitive, and if the state’s utilities are not able to meet the expected growth in future demand, reliability will be decreased, with a huge financial cost to Colorado,” the study concluded.

About The Colorado Energy Forum

Based in Golden, the Colorado Energy Forum is a non-profit, non-partisan educational foundation that works to educate Colorado citizens on the need for increased investment in Colorado’s energy infrastructure so that economic growth, job creation, and conservation can be maintained in our state for future generations. It is governed by a Board of Trustees and is led by Executive Director Bruce Smith, who served for 13 years as Director of Colorado Public Utilities Commission. Further information can be obtained by calling (720) 635-5477 or by visiting www.coloradoenergyforum.org.