Wind+solar trade for coal fails, but shows the path forward

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Coal is a passing source of energy. Great Britain, the home of the coal-powered Industrial Revolution – a place where coal had been burnt continuously for five generations of humanity, has glimpsed its new path forward this year.

In the United States, we saw 16 GW of coal retired last year, continuing the trend of no “net new” fossils since 2006. And across the country we are seeing electric utilities – even in those not politically inclined to do so – stating unequivocally that its time to trade out the fossils.

As the latest, Denver-based wholesale power provider Guzman Energy has proposed to Tri-State Generation & Transmission Association to “finance the accelerated retirement of nearly 50% of Tri-State’s coal capacity not already slated for early closure” and “replace the retired coal generation with a new portfolio that is in excess of 70% renewable.” Three coal plants in total, two in Colorado and one in New Mexico would have been closed by 2025 under the plan.

Tri-State declined the opportunity – for now – stating the deal “lacked any specific or meaningful detail or terms”, that Guzman’s terms to immediately enter into exclusive negotiations wasn’t necessarily in the best interests for Tri-State members, and because the non-profit Tri-State believes it can do it for cheaper than the for-profit Guzman.

The deal structure would see Guzman building approximately 1.2 GW of evenly split wind and solar power, as well energy storage all backed by natural gas. Guzman noted that the new source would replace all of the lost capacity and energy, per Tri-State’s definitions.

Per Clean Cooperative, Tri-State already plans to retire 527 MW of coal at two locations before 2025. Guzman’s proposal would add the 253 MW Escalante plant in New Mexico, as well the 448 MW Unit 3 at the Craig Generation Station, and the 410 MW Unit 2 that is partially owned (24%) by Tri-State at the same location.

But there is also push-back from the coal mining industry. Moffat County Commissioner Ray Beck commented on the potential closure of the Craig coal plant and mining facility, as proposed by Guzman:

If a coal miner or power plant employee is making $80,000, where are they going to? What are their options? Leave the community or leave the state … You are talking about crippling a community financially for a very long time.

Guzman said part of the package would be “substantial financial assistance to communities negatively impacted by the early retirement of coal plants.”

Also included in this proposal was a tool by which Guzman Energy would compensate Tri-State for increasing the cap on its members’ self-generation rights from 5% upwards.

Local politicians have jumped on the news to put pressure on Tri-State:

Per an analysis by Vibrant Clean Energy, it will take approximately 2.8 GW of solar power, 8 GW of wind and 765 MW / 3 GWh of energy storage to allow Colorado to shut down its 4 GW of coal by 2025. But it can do so while also lowering electric rates by 5%.