City closing two coal-fired plants and replacing with natural gas as bridge to renewables
Colorado Springs significantly moved up the goal to decommission the Martin Drake coal plant downtown from 2035 to 2023 and is aiming to reduce the city’s carbon emissions by 80 percent by 2030 and by 90 percent by 2050.
The full plan to overhaul the plant tops $1 billion in budget and will involve using natural gas to bridge the gap to more renewable energy sources such as wind and solar, as well as upgrading the city’s electrical grid. The Ray Nixon plant, located about 20 miles south in Fountain, will also be decommissioned by 2030. Martin Drake and the Ray Nixon plant generate 416 megawatts of coal-fired power per year for Colorado Springs.
The important set of decisions was not made in a vacuum. Decommissioning Martin Drake fits into a statewide decarbonization plan, Colorado’s Just Transition law, which was passed in the 2019 legislative session. Plus, Colorado Springs residents own their city’s utilities like an estimated 2,000 other public utilities across the United States. The nine-member City Council serves as the Colorado Springs Utilities Board. On June 26, the board voted 7-2 in favor of decommissioning Martin Drake.
Effects on jobs, environment, other development
The utility plans to install six natural gas generators to be temporarily housed at the Drake site before the power plant goes off the grid by 2023. This transition will reduce the number of workers required to maintain the location from 80 to four.
According to Aram Benyamin, CEO of Colorado Springs’ utility, people will not lose their jobs due to the transition because they will all be retrained for new roles.
“I’ve said for many years that none of the workers should pay the price of transition,” Benyamin said. “I think I feel good that I’ve kept my promise.”
Andres Pico, a Colorado Springs city council member, emphasized that the decision to shift from coal to natural gas was largely borne out of economic concerns.
“The cost of maintaining and operating a coal plant, particularly with manpower, just didn’t compare to putting in those natural gas units that take four people to maintain,” he said.
Renewable energy is attractive to Colorado Springs because it has a more stable portfolio that is not exposed to risk, such as wars, disruptions in supply and regulation. Because of renewable energy’s high upfront capital cost, however, customers may not see their utility bills decrease.
“I wouldn’t call it a decrease,” Benyamin said. “It’s just tempering down the increases that we otherwise would have seen.”
Drake is Colorado’s last remaining coal plant in a downtown-urban area. Its closure will result in decreased air pollution and harmful emissions like sulfur dioxide. In general, marginalized populations and people of color live in areas that are more affected by pollution, and downtown Colorado Springs is no exception.
A peer-reviewed article for the journal GeoHealth found that the emission reductions from closing Drake will result in moderate health benefits for the region, especially for the areas closest to the plant where people with the lowest median incomes live.
Additionally, Drake’s eventual closure will allow space for new development projects in downtown Colorado Springs, The Colorado Sun reported in 2019. The U.S. Olympic and Paralympic Museum opened its doors in July, and a new soccer stadium just east of Drake is scheduled to be completed by spring.
Decommissioning in steps
Michael Avanzi, the Manager of Energy Planning and Innovation for the utility, said the goal is to install the temporary natural gas units either by the end of next year or early 2022. According to Avanzi, these generators are the last fossil fuel resource Colorado Springs is planning to add to the city.
The natural gas generators need to be up and running before Drake goes offline to ensure customers still receive reliable electricity. Until 2030, the energy lost by decommissioning Drake will be generated mostly by the coal-powered Ray Nixon and natural gas-powered Front Range power plants.
Avanzi said that the natural gas generators at the Drake site will be used sparingly, around 2 to 5 percent of the time.
“They’re really just there to provide that reliability and that resilience when we have our periods of peak demand on our system,” he said.
The gas generators will only be at the Drake site temporarily until they are moved to a more permanent location that is still being chosen. The transition, however, can only occur after the city’s electrical transmission system is upgraded, a $150 million project scheduled for completion in 2025.
A new backbone transmission line will connect the Drake location to the Kelker Substation and serve as the key to powering downtown Colorado Springs. The utility is also planning to make improvements to their existing substations, build new substations and upgrade existing transmission lines.
Benyamin said a key part of upgrading the transmission system is splitting the city into micro-grids, a first-of-its-kind undertaking in Colorado Springs.
The utility plans to bring on 400 megawatts of storage for renewable energy sources. In the micro-grid system, five or six homes will be hooked up to both the utility and battery storage. That way, when the utility goes down, people will still have stored electricity they can use to power their homes. Benyamin compared the micro-grid system to a community center shared between a group of homes.
“All of them can dump their solar electrons into storage, and they all use it as a community storage,” he said. “That is a more sustainable way of designing communities that might have no gas in them.”
Lofty solar and wind goals
All of that upgrading work will serve as a bridge to more sustainable energy sources. Colorado Springs signed a power purchase agreement with Boulder-based company Juwi Inc. for a 175 megawatt solar array to be built in El Paso County.
The array will also come with a 25 megawatt battery energy storage system that will be one of the largest in Colorado. Over 400,000 photovoltaic cells, which will power more than 55,000 homes per year, are scheduled to be completed by 2023.
Avanzi also said that the utility needs to add about 200 megawatts of wind energy to the grid before 2030, but they haven’t decided on a plan for that yet. By 2050, the goal is to expand wind energy to 500 megawatts.
Council weighed two options
In making the decision to decommission Martin Drake, the Colorado Springs city council had to choose between two pathways that would decide the future of the city’s energy development.
Portfolio 16 would have replaced the coal-fired Ray Nixon plant with natural gas generators while Portfolio 17 replaced only Martin Drake with natural gas, and energy lost after Ray Nixon closes will be made up by renewable sources. Over 30 years, Portfolio 16 would have cost around $36.27 billion, or $1.21 billion a year. Portfolio 17 is more expensive, clocking in at around $36.47 billion, or $1.22 billion a year.
The City Council, which also serves as the public utility’s board, voted 7-2 in favor of Portfolio 17, despite a recommendation from the Utilities Policy Advisory Committee to move forward with Portfolio 16. The UPAC, which is appointed by the council, backed Portfolio 16 due to a more reasonable amount of risk, solid financial projections and the proven uses of innovative technology.
Councilmembers Pico and Don Knight cast the two dissenting votes and favored Portfolio 16. Pico said he agreed with the UPAC that counting on expanded innovation and storage capacities of renewables is too risky.
“We’re not seeing renewables actually maintain reliability,” Pico said. “It’s both a technological risk, and proven performance doesn’t measure up to the expectations.”
Pico also said he thought the city’s goal for a 90 percent carbon emissions reduction by 2050 was unrealistic.
“Some hard engineering and financial realities are going to show up,” he said. “About somewhere between 50 to 70 percent (reduction), we’re going to hit the wall.”
The council’s vote to back Portfolio 17 represented a leap of faith in future technology. Benyamin said that though the technology needed for the 2030 transition doesn’t yet exist, he’s confident innovation will catch up.
“Eventually, 15 to 20 years from now … storage could be so reliable and so sophisticated that you don’t need any fossil fuel,” he said. “I think at the end we will get there. Right now, we are not.”