American energy company Xcel generates and distributes electricity in eight states, but has traditionally favored coal. The regulator asked it to close down two aging coal plants, and replace them with something at least a shade greener. So it put out a request for offers from all technologies, and received 430 proposals back. The company found something remarkable when it ran the numbers. It found renewables cheaper than coal in many offers.
How Could There Be Renewables Cheaper than Coal?
The cost of solar panels, wind turbines, and storage batteries has plummeted in the past few years as economies of scale kicked in. Opinion leader Carbon Tracker commented on the offers for renewables cheaper than coal as follows:
“The median bid for wind plus storage appears to be lower than the operating cost of all coal plants currently in Colorado, while the median solar plus storage bid could be lower than 74% of operating coal capacity.” These median numbers were $21 per MWh for wind-plus-batteries, and $36 per MWh for solar-plus-batteries respectively.
Better Than an Oyster Buffet at a Las Vegas Casino
“The response is amazing,” a leading renewable advocate told Denver Post. “The world’s our oyster; it’s like walking into a Las Vegas buffet.” However, we think we need to be more cautious interpreting this development. The fact we now have renewables cheaper than coal in Colorado does not mean we are going to see the price of home solar installations plummeting too.
Nonetheless, this is a remarkable step forward for renewable energy in America. The coal lobby can no longer argue that green electricity is expensive. Moreover, we now have storage batteries to smooth delivery out.
In 1942, World War 2 began to swing in the Allies favor. A reporter asked British prime minister Winston Churchill “is this the beginning of the end?” The famous man retorted, “No, but it is the end of the beginning,” Do you think we have reached the end of the beginning in the battle against coal too?
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Preview Image: Craig Coal Power Station, Colorado
