This fall, the Colorado Public Utilities Commission greenlit Colorado’s biggest wind project to date. State regulators approved Xcel Energy’s Rush Creek proposal, allowing the utility to construct and operate a 600 MW wind farm in eastern Colorado.
This new project will generate about 350 construction jobs, building the infrastructure needed to power 180,000 homes with clean electricity. Vestas will manufacture the wind turbines for the project at its local Colorado facilities, while federal tax incentives will reduce project costs by more than $400 million – savings Xcel can pass on to ratepayers over the 25-year life span of the wind farm. The project is an over $1 billion investment, and Xcel chose wind because it was the cheapest source of energy, out-competing traditional fuels over the project’s life span.
The Rush Creek project is just one example of how wind (and solar) energy continues to transform Colorado’s energy industry. This transformation is helping clean Colorado’s air and grow its already booming economy with good local jobs, with over 5,000 in the wind industry – and it is doing so while keeping Colorado’s electricity bills lower than the national average. Renewable energy has quickly become one of the cheapest energy sources utilities pursue when adding new generation to the electrical grid, and Colorado is no exception.
Coloradans enacted the first-ever, voter-approved renewable energy standard in 2004, and the standard has been increased several times over the years. The current standard is 30% by 2020 for investor-owned utilities, and the state’s largest utility, Xcel, is on track to exceed the goal. Large electric cooperatives serving more than 100,000 square meters must achieve 20% renewables by 2020. Another important Colorado law, the 2010 Clean Air Clean Jobs Act, retired older coal-fired power plants in favor of cleaner energy sources and implemented safeguards to limit methane emissions over a short four-year period to meet federal air quality standards.
Colorado has a long history of working to clean its air and has done so in a way that has kept the economy moving along. (The state’s unemployment rate is currently a low 4.2%.) In 2015 alone, Colorado’s installed wind power eliminated 8 million metric tons of carbon-dioxide emissions. And because Colorado has made such tremendous progress in adding new renewables and switching older coal-fired power plants to cleaner fuels, the state has a relatively smooth path toward compliance with the U.S. Environmental Protection Agency’s Clean Power Plan, which would reduce greenhouse-gas pollution if the plan is upheld by the courts.
Wind developers eager to utilize the federal production tax credit have strengthened the wind industry over the past several years, and by using those tax credits, technological advancements have helped bring the cost of wind power down tremendously. The price utilities pay for wind has fallen by 66% in recent years, and it’s now the cheapest source of new electric generating capacity in some parts of the country. Furthermore, Colorado tax policy also has contributed to the renewable energy industry’s growth in the state.[adleft zone=’190′]
In 2015, the Colorado General Assembly amended the Enterprise Zone Investment Tax Credit (EZ ITC), which provides incentives for businesses to locate and expand in economically distressed areas across the state. Many of those areas are in rural Colorado, where wind capacity factors are high and landowners are eager to host wind turbines. The tax credit update offers renewable energy companies the ability to monetize EZ ITCs associated with new investments made after Jan. 1, 2015. Companies that choose credit monetization would return 20% of the credit value to the state. In exchange, the company would receive 80% of the credit value up to an annual cap of $750,000. Therefore, businesses now have an incentive to make significant investments in renewables in places where the state needs them most.
Investment in rural Colorado is needed, and the state is seeing those investments start to pick up. In a recent report released by Progressive 15 (an organization made up of 15 rural counties across Colorado’s eastern plains), renewable jobs in Colorado’s rural eastern counties topped 4,000, along with hundreds of millions of dollars made in local investments. This is a critical financial boost for rural counties, where fewer and fewer individuals and families can make a living in their hometowns. Renewable energy is now providing an anchor for these Coloradans to live where they want and keep local economies strong.
Renewable energy – in particular, wind, with its potential along Colorado’s eastern plains – is making tremendous investments in local economies. The Progressive 15 report finds renewables contributed over $7.2 million in annual property taxes and $7.5 million in annual landowner lease payments, citing wind industry sources. This money provides a new tax base and helps farmers who have been struggling to make ends meet to keep making a living from their land.
And local governments and landowners aren’t the only beneficiaries: From 2000 to 2016, the report estimates $2.7 billion in direct and indirect economic output from the construction of renewable energy facilities in the 10 counties studied.
In 2007, total installed wind capacity in Colorado was 1,067 MW. By the end of 2016, that number will have tripled to over 3 GW. These projects have translated to hundreds of millions of dollars in state and local investments that created thousands of jobs; provided lease payments to farmers and landowners; and added to local government coffers to buy fire trucks, fund public libraries and more. This growth is certainly happening across Colorado’s eastern plains, but it is also happening across the country. Earlier this year, the total installed capacity of wind in the U.S. surpassed 75 GW, and another 20 GW is set to come online in the near future.
Utilities serving Colorado customers, including Xcel, Tri-State Generation and Transmission, and Black Hills Energy, are continuing to acquire wind energy. In ongoing integrated resource planning dockets at the Colorado Public Utilities Commission, both Xcel and Black Hills anticipate competitive procurement that could lead the way to even more cost-effective Colorado wind and solar development.[adleft zone=’190′]
The core infrastructure needed to expand deployment of wind in Colorado – transmission lines and electricity grid operational improvements – is also advancing. The Mountain West Transmission Group is a new cooperative effort that includes Public Service Co. of Colorado, Basin Electric Power Cooperative, Black Hills Corp., Colorado Springs Utilities, Platte River Power Authority, Tri-State Generation and Transmission, and Western Area Power Administration. The group aims to create a single multi-company transmission tariff and explore market alternatives to existing regional transmission organizations. A stakeholder process and comment period are expected in the first quarter of 2017. The Mountain West Transmission Group’s efforts could have significant impacts on renewable energy development in Colorado, and renewable energy advocates and developers expect to engage as much as possible to ensure that those impacts are positive.
Sarah Propst is executive director of the Interwest Energy Alliance, a regional partner of the American Wind Energy Association. The advocacy is a nonprofit trade association that represents U.S. companies in the renewable energy industry, bringing them together with regional, nongovernmental organizations in Arizona, Colorado, Nevada, New Mexico, Utah and Wyoming. She can be reached at email@example.com.