This is probably not the first place you’ve read about Georgetown,
Texas, the town of 55,000 that will be getting the equivalent of 100
percent of its electricity from renewable energy by 2017. But few
articles hit upon the two key reasons Georgetown was able to make this
move when so many other cities with abundant renewable resources (e.g. Tucson, Arizona) are stuck with a majority-coal-fired electricity supply.
If cities had these keys, many could obtain 100 percent renewable energy at a surprisingly low cost.
Key #1: Local Ownership
Just one in seven Americans gets their electricity from one of
about 2,000 municipal utilities, but these locally controlled utilities
allow a community to chart its own electric future. It’s the key behind Palo Alto’s surge toward carbon neutral electricity, toward Austin’s 35 percent renewable by 2020 goal, and Sacramento’s ability to pursue a 90 percent reduction in greenhouse gas emissions from electricity by 2050. Unfortunately, this local self-determination isn’t enough, because
there are many other municipal utilities with only a pittance of
renewable energy on their grid system. And that leads to…
Key #2: No Contracts
The Georgetown municipal utility closed its last power plant in
1945, and has contracted with third parties to provide electricity ever
since. With the expiration of its major supply contract in 2012, it was free to sign new contracts. This freedom is what has allowed other utilities like tiny Farmers Electric Cooperative in Iowa to become the number one solar utility in the country.
Georgetown didn’t pursue renewable energy for environmental
reasons, but simply because it was the best investment for their
customers. The 150 megawatts of solar PV and 145 megawatts of wind power
will supply as much as double the town’s annual electricity use,
ensuring sufficient supply year round even with fluctuations in sunshine
and wind, and allow the town to sell the excess into Texas electricity
markets. As attractive as the price — which was lower than the town’s current wholesale electricity costs —
the solar and wind contracts have zero volatility because they have
zero fuel cost, insulating Georgetown electric customers from rising
fossil fuel prices.
Self-Reliance not Self-Sufficiency
It’s worth noting that the solar and wind contracts don’t mean that
Georgetown will be completely reliant on the sun and wind. Their grid
remains interconnected to the rest of the Texas electricity system, so
in periods of zero wind and zero sun, the town can still tap into the
ERCOT spot market for power. However, the wind and solar resource tend
to balance one another. As the city’s press release notes, “This means that wind power can most often fill power demand when the sun isn’t shining.”
A Low Cost Copy?
Could other cities follow suit? If they had the two keys that
Georgetown did, almost certainly. ILSR’s analysis suggests that path to
100 percent renewable energy is surprisingly inexpensive. Our approach was to analyze the path to 100 percent renewable
energy via wind and solar power alone, for the largest municipal
electric utility in each state (i.e. cities with Key #1, and hopefully a
timeline to obtain Key #2). The following map shows that 15 of the
largest city-owned electric companies (mostly in the Midwest) could
contract for 100 percent renewable energy at 7.5¢ per kilowatt-hour
(kWh) or less. Another 18 could do so for less than 9¢ per kWh. The
final 14 could contract for 100 percent wind and solar for 10.3¢ per kWh
or less. Detailed assumptions and calculations are shown at the bottom
of this post.
The map is pretty clear: Georgetown may be the first municipal
utility to procure 100% renewable energy (and not just renewable energy
credits), but it won’t be the last. As costs continue to fall for
renewable energy, many more cities can make the rapid shift to 100% wind
and sun.
Photo credit: Jim Nix via Flickr (CC BY-NC-SA 2.0 license)
This article originally posted at ilsr.org. For timely updates, follow John Farrell on Twitter or get the Democratic Energy weekly update.
Assumptions
Costs
The cost of solar and solar resource potential was calculated using
the National Renewable Energy Laboratory System Advisor Model, with an
installed cost of $2.55/Watt, $20 per kilowatt annual maintenance costs,
use of both federal accelerated depreciation and 30% tax credit,
financing 100% of the system cost at 8% interest on a 10 year loan, a 5%
real discount rate over 25 years, and a 2¢ per kWh margin for the
developer.
The cost of wind power was calculated by ILSR assuming an installed cost of $1.63/Watt (source),
$49 per kilowatt annual maintenance costs, use of federal accelerated
depreciation but no tax credits, financing 100% of the system cost at 8%
interest on a 10 year loan, a 6% real discount rate over 20 years, and a
1¢ per kWh margin for the developer. The wind resource was based on a
weighted average of Wind Action’s 2011-13 capacity factor analysis where
available, LBNL’s Wind Technologies Market Report or an ILSR estimate
of 20% capacity factor (used for all states in the Southeast with no
current wind power installed). The reported cost on the map is the weighted average price of power, based on the mix of wind and solar resources.
Renewable Energy Mix
Cities (the largest municipal utility in each state) were assumed
to get a minimum of sufficient wind and solar capacity to meet their
annual peak energy use, from each technology (e.g. a city with a 150-MW
peak use would acquire a minimum of 150 MW of solar and 150 MW of wind
power). The capacity of the less expensive technology was then doubled
to ensure sufficient annual output to meet the city’s energy needs
(based on 2013 retail sales data from the Energy Information
Administration). In six cities, this figure (for solar) had to be
increased further to make sure that 100 percent of annual energy sales
could be met with wind and solar energy production.
For example, Rochester, MN, has a peak energy demand of 279 MW and
was assumed to purchase 279 MW of solar PV and 558 MW of wind power
capacity, producing 367,000 and 1,600,000 megawatt-hours per year,
respectively. The cost of purchased solar (9.3¢) was averaged with the
cost of purchased wind power (6.6¢) to get a blended cost of 100 percent
wind and sun of 7.1¢ per kWh.
http://www.renewableenergyworld.com/rea/blog/post/2015/04/can-other-cities-match-georgetowns-low-cost-switch-to-100-wind-and-sun
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