Interior West
Think Tank Releases Comprehensive Study for Western Power Grid Adding significant amounts of renewable energy resources and energy
efficiency measures to the Western power grid between now and 2020 would reduce
regional electricity costs by billions of dollars, according to a study by Western
Resource Advocates. The study, A Balanced Energy Plan for the Interior
West, concludes that using more renewables and efficiency in Colorado,
Utah, Arizona, New Mexico, Nevada, Wyoming, and Montana would also create a more
secure business climate by reducing economic and environmental risk. In some
risk scenarios, the region could save $5 billion annually by adopting a more
balanced plan. Western Resource Advocates (WRA) engaged the consulting firms Synapse Energy
Economics and Tellus Institute for portions of the analysis. They used the same
PROSYM model employed by the power industry to make predictions about energy
supply, demand, and costs, explained Nielsen. First, they modeled a future that
assumed the region would continue more or less as it is now, adding mainly new
coal and natural gas to meet growing demand for power. Then a scenario that
assumed an aggressive but doable set of energy efficiency steps and that 20
percent of the region’s electricity would come from renewables by 2020 was
analyzed. WRA ran a side-by-side comparison and found that while both systems
would be reliable, the benefits of the balanced plan compared to the “business-as-usual”
scenario were significant in terms of both costs and quality of life impacts. The report outlines several steps the public and private sector can take to
secure a more balanced energy future. Because they have the most to gain from
the more stable economic climate provided by a more diversified energy supply,
businesses can take the lead in advocating for a balanced plan. The study
highlights businesses around the region that are already making a difference,
such as IBM, PacifiCorp, and Alcoa. State and local level policies such as
renewable energy standards, which require that a portion of the energy consumed
in a given state be generated from renewables, are another important step. To download the report, click
here. Western
Resource Advocates is a solution-oriented conservation law and policy group
serving the Interior West. For more information e-mail Susan
Innes. Source: Western Resource Advocates
The Balanced Energy Plan addresses our need to diversify energy sources
and reduce the cost of electricity," said Joanna Prukop, New Mexico State
Energy Secretary. "This is the first study to do a hard-nosed comparison of
the costs of continuing to rely on fossil fuels as opposed to adding more
efficient, cleaner renewable energy sources. It will help further the regional
dialogue about the energy future of the West," she said.
The Balanced Energy Plan sought to do four things, said John Nielsen,
Energy Program Director for Western Resource Advocates, which produced the
report:
• Reduce and manage risk
• Lower the cost of electricity generation
• Reduce the environmental impact of power generation
• Ensure transmission and generation reliability
“This analysis shows that the region can depend on a broader diversity of
energy resources, using more renewables and efficiency to meet future electric
needs, while cutting costs, maintaining reliability, and managing risks,” said
Ron Lehr, a former Chair of Colorado’s Public Utilities Commission. “Reducing
pollution from the electric sector by 30-40 percent avoids future costs, and
liabilities, particularly for large electric customers,” he added. “Corporate
and government decision makers should be paying attention to these bottom-line
results.”
“We are very impressed with the findings of this study, and also with the
methodology behind it,” said Mayor Rocky Anderson of Salt Lake City. “In
July of 2002, Salt Lake City committed to a sizeable wind power purchase because
local government has a significant stake in reducing the risks and costs of
energy production, as well as reducing air pollution. This plan shows that it is
feasible to diversify energy resources in the West in a way that will benefit
not only our environment but will help stabilize electricity rates and increase
the security of our business community.”
Aspen Skiing Company also endorsed the concept of the Plan: “As one of the
region’s flagship ski areas, we are invested in a secure and healthy economic
climate for the Interior West,” said Auden Schendler of Aspen Skiing Company.
“We think climate change is the most important issue facing the region and
were excited to learn of the report’s finding that a more balanced energy plan
can reduce both electricity costs and greenhouse gas pollution.”
Nielsen explained that the main risk with the “business-as-usual” scenario
was its reliance on fossil fuels. This would expose electricity customers—especially
large ones—to rising or unpredictable natural gas prices, hydroelectric
shortages caused by drought, and future environmental regulations. “We think
it’s inevitable that carbon emissions will be regulated in the future.
Pacesetting utilities like PacifiCorp are already accounting for this when they
assess the cost of coal and other fossil fuel resources. When carbon is
restricted, it will be very expensive to address the carbon emissions from the
coal plants that are being proposed today,” Nielsen said. “If history is any
guide, those high costs will be passed on to customers, which is something any
large consumer of electricity, such as a business or a city administration,
should be concerned about.”
According to Nielsen, while both the “business-as-usual scenario” and the
Balanced Energy Plan account for an upgraded transmission system and both ensure
a reliable power supply, the Balanced Plan was found to have some significant
advantages. Compared to the business-as-usual scenario, the Balanced Plan would:
• Reduce the cost of providing electricity to the region by $2 billion per
year by 2020
• Help stabilize electricity rates by reducing reliance on natural gas
generation
• Reduce the cost of providing electricity by $2.5 billion per year by 2020,
if natural gas prices increase more rapidly than expected
• Reduce the cost of providing electricity by $4.9 billion per year by 2020,
if climate change regulations are adopted by the federal government
• Reduce nitrogen oxide and sulfur dioxide air emissions from power plants by
31 percent and 38 percent, respectively, by 2020, decreasing risks, costs, and
liabilities associated with the health impacts of air pollution
• Reduce carbon dioxide emissions, the major human-caused contributor to
climate change, by 42 percent by 2020.