Credit to Author: Darrell Proctor| Date: Sun, 13 Jan 2019 18:35:08 +0000
Colorado-based Tri-State Generation and Transmission Association, a group cited by analysts for its high wholesale power costs and its reliance on coal-fired units, on Jan. 11 announced a 100-MW project that will more than double its solar power portfolio.
Tri-State in a news release said the Spanish Peaks Solar Project near Trinidad, Colo., will be developed by Boulder, Colo.-based juwi Inc., part of Germany’s juwi Group. Tri-State said it will buy the project’s output under a 15-year power purchase agreement (PPA). The company said construction of the project, located about 130 miles south of Colorado Springs near the border with New Mexico, is expected to begin in 2022, with commercial operation expected in 2023.
The project, which encompasses 660 acres, includes more than 300,000 photovoltaic solar panels on single-axis tracking arrays. It will be built adjacent to Tri-State’s 30-MW San Isabel solar plant in Las Animas County, the utility’s first project with juwi. That facility came online in 2016.
Tri-State serves customers in Colorado, Wyoming, Nebraska, and New Mexico. Most of its generation comes from coal-fired units at the Craig Generating Station in Craig, Colo., a 1,303-MW plant with three units, one of which—the 427-MW Unit 1—is scheduled to retire by year-end 2025. The installation of catalytic selective reduction technology on the 427-MW Unit 2 at the plant brought Craig a Top Plant award from POWER in 2018. The plant’s Unit 3, which also has advanced emissions reduction technology, has generation capacity of 448 MW.
The company’s other coal plants include the 100-MW Nucla Station in Nucla, in southwest Colorado, which is scheduled to be closed in 2022. The company closed the nearby New Horizon Mine, which supplied coal for the Nucla plant, in 2017.
A recent report commissioned by clean energy developer Community Energy Solar of Pennsylvania, and completed with modeling by Boulder-based Vibrant Clean Energy, said Colorado ratepayers could save $250 million each year over a 10-year period—and $2.5 billion through 2040—if the state replaced its coal plants with renewable energy, along with natural gas and storage. The report noted, “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 a clean energy future.”
Fourth Utility-Scale Solar Project
Tri-State in a news release said Spanish Peaks is its fourth utility-scale solar project and first renewable energy PPA after it issued a request for proposals (RFP) for renewable energy supply in June 2018.
“Tri-State secures renewable energy with the highest value at the lowest cost for our member cooperatives, and this is our largest, most cost-effective solar project to date,” said Mike McInnes, Tri-State’s CEO, in the release. “By developing renewable projects through Tri-State, our members take advantage of an economy of scale unavailable in smaller projects. We’re pleased to once again collaborate with juwi on a project that benefits all of our members and further diversifies our power supply.”
Tri-State in its release said “Nearly a third of the energy consumed by Tri-State’s members comes from emissions-free renewable energy.” The utility said it has 85 MW of solar power in place, and has added more than 475 MW of utility-scale solar, wind, and renewable projects to its generation profile since 2008.
Expensive Coal Plants
A 2018 report from Moody’s Investors Service said that most coal plants owned by municipal utilities and generation and transmission associations are more expensive to operate than new renewable energy projects. Moody’s noted that “72.3% of these plants, or about 65.0 gigawatts, have operating costs exceeding $30 per megawatt hour, which Moody’s views as the threshold above which coal plants are vulnerable to be displaced by cheaper generation options.”
The report provided details about several coal units, including Tri-State’s, noting the company’s operating costs were between $33.63 and $36.80/MWh. Moody’s said it views $30/MWh as the threshold above which coal plants are vulnerable to have their generation displaced by cheaper options.
One of Tri-State’s members, Delta-Montrose Electric Association (DMEA) in Colorado, is trying to get out of its contract with Tri-State. The group said it wants to use more renewable and locally generated power than it can under the current contract. DMEA also has been vocal with complaints about Tri-State’s power rates, and in December 2018 said it wants an exit from Tri-State’s wholesale contract in part because Tri-State relies too much on coal-fired generation.
Virginia Harman, schief operating officer of DMEA, told Colorado Public Radio: “Average member rates have increased by 56% since 2005. That’s more than double the increase of the Consumer Price Index. And that stands in stark contrast to the overall energy market in which prices have decreased significantly.”
Harman said Tri-State, despite its RFP for renewables, is not doing enough to replace fossil fuels with wind and solar. Harman said DMEA is prevented from generating from wind and solar because the Tri-State contract limits local renewable power generation at 5%.
“We would like to exceed that,” she said. “This is a way for us to look at more diverse energy mix and increased local generation.” DMEA has asked the Colorado Public Utilities Commission to decide a fair rate that DMEA would pay to end its contract with Tri-State. The group said it would then buy power from Guzman Energy Group, the wholesale power provider for the New Mexico-based Kit Carson Electric Association, which exited its agreement with Tri-State in 2016.
—Darrell Proctor is a POWER associate editor (@DarrellProctor1, @POWERmagazine).