Aggressive decarbonization of the electricity sector is the least costly path to achieving Colorado's carbon emissions-reductions goals, according to a Sept. 28 report by the Natural Resources Defense Council and the Sierra Club.
The report was discussed at the Oct. 12 meeting of the greenhouse gas subcommittee of the Colorado Air Quality Control Commission.
The Colorado Department of Public Health and Environment at the meeting compared NRDC's model to two separate greenhouse gas models: a draft model produced by the CDPHE and an emissions-reduction "roadmap" published Sept. 30 by the Colorado Energy Office (see CEM No. 1610). Each model represents different paths to reaching the statutory GHG emissions-reduction requirements of 26 percent by 2025, 50 percent by 2030 and 90 percent by 2050, relative to 2005 levels, as set out in HB 1261.
The models produced by the CDPHE and the energy office estimate emissions reductions in the electricity sector dropping to around 8 million metric tons per year by 2030, compared with a 2005 baseline of 40.2 MMT. The CDPHE model included an increase in natural gas usage as coal declines through 2030.
NRDC and Sierra Club in their report modeled a scenario in which the electric sector decarbonizes as quickly as possible, decreasing GHG emissions to 1.3 MMT per year by 2030—a 98- to 99-percent reduction in carbon emissions and significantly more than the 80-percent reduction by 2030 that Xcel Energy-Colorado voluntarily pledged in 2018 and the Colorado Assembly codified into law in 2019's SB 236. The environmental groups' model also assumes a scenario in which all coal units in the state are retired by 2025.
"Decarbonization in the electric sector is really going to drive the least cost, the least emissions, and I think in terms of feasibility, there are some big levers we can use on the electric-sector side that don't exist or are less feasible on the building or transportation side," Ariana Gonzalez, director of Colorado policy for NRDC's climate and clean-energy program, said.
Josh Korth, lead technical analyst at the CDPHE, told the air commission that his department has some doubts about that analysis.
"The NRDC/Sierra Club effort is the most optimistic with the utility sector," he said. "We have a few concerns about whether that is truly feasible in Colorado given that Colorado is not part of a regional transmission organization, and we have some very distinct operating companies within the state."
Overall, however, across the various sectors each of the three models estimates broadly similar emissions reductions overall for 2025 and 2030.
"There are three different approaches to achieving those statewide goals," Korth said. "All of these efforts show the importance of implementing a broad suite of legislation, regulation, [and] policies that really do look economywide. This has to be a broad look that focuses on where that energy is created as well as how that energy is used."
Gonzalez stressed to the subcommittee that pushing for decreased emissions in the electricity sector would be the least costly pathway.
"What we found was moving slowly on the electric sector meant that it was more expensive overall, even more expensive than completely getting rid of all fossil fuels, and it also left more emissions cumulatively," she said.
Xcel Energy-Colorado in Sept. 18 comments to the subcommittee said that while the AQCC has proposed to incorporate mandatory closure dates for coal-fired power plants into its regional haze rulemaking, forthcoming on Nov. 19, it did not "see the need" for further action from the committee on the planned retirements.
"Rather, the Electric Resource Plan process is the best place to evaluate resource needs and steps necessary to meet the emission reductions goals; indeed, it is the ERP process and its tried and true planning architecture that has put Xcel Energy on the aggressive and industry-leading carbon reduction pathway it is on and that will continue through this next ERP cycle," the company said.
Xcel also urged the committee to consider the cost of building electrification in its decision-making, noting that without technological innovation, transitioning away from natural gas might carry a "significant cost premium" for customers.
Tri-State Generation and Transmission Association in Sept. 18 comments to the subcommittee urged against expediting planned closure dates of coal-fired generating units on the grounds that it "will cause great harm to individuals, farms, ranches, businesses, municipalities, counties and taxing districts that are striving to adapt to the changing rural landscape."
Tri-State and Xcel are due to submit their ERPs to the Colorado Public Utilities Commission in December and March, respectively. The plans "will give [the AQCC] very good clarity as to what the next 10 years of emissions look like," Korth said.
The three models considered by the AQCC also differed in their projections for the transportation sector. The energy office roadmap assumed the most aggressive zero-emission vehicle sales, with close to 100-percent adoption by 2050. But all three noted that widespread electrification will be necessary to bridge the gap between the 2030 and 2050 goals, with the NRDC model suggesting that electrification of the transportation and building sectors is downstream of decarbonizing the electricity sector.
The subcommittee also discussed a draft resolution on a "backstop" policy proposed by Western Resources Advocates, which would periodically assess whether the state is on track to meet its targets and potentially add hearings or rulemakings if it is not (see CEM No. 1604). The resolution is due to be revised and brought to the full commission at its Oct. 22 meeting.