Nov 26 - Las Vegas Review - Journal

Nevada utilities do not need to build coal-fired power plants to meet the state's growing demand for electricity at relatively low prices, a recently released study suggests.

"There is a high likelihood that energy alternatives (to coal) would satisfy Nevada's demands for future energy with lower costs and lower risks for ratepayers," said Ernie Niemi, senior policy analyst with ECONorthwest, the firm that conducted the study for the Nevada Clean Energy Campaign.

Renewable energy, such as wind and solar power, and energy conservation are likely to cost less than coal-fired power plants and also probably will meet the growing needs for electricity in Nevada, according to the study.

The organization that commissioned the study comprises 20 groups, including the Sierra Club, Western Resource Advocates and Southwest Energy Efficiency Project.

The study comes amid controversy over efforts by Sierra Pacific Resources, the parent of Nevada Power Co., and two independent power producers to develop coal-burning power plants in Nevada. Sierra Pacific proposes to build the $3.8 billion Ely Energy Center and a related transmission line to Ely. LS Power Group has similar plans for a power plant at Ely, and Sithe Global Power is pursuing plans to build a smaller coal-fired plant near Mesquite.

Coal-fired plants emit roughly twice the amount of carbon dioxide as natural-gas-fired plants per unit of electricity, and scientists generally believe that carbon dioxide emissions contribute to global warming.

The report, however, focuses on economic factors, rather than environmental ones.

The study indicates that renewable energy projects create more jobs than coal-fired plant projects except during the actual construction of the plants.

Coal creates one job per megawatt, according to the report. Solar creates between 7.4 and 10.6 jobs. Wind projects generate between 0.7 and 2.8 jobs.

"Job creation from energy efficiency measures over the long run would be two to 10 times higher than for coal," the study shows.

Wind and geothermal power, which comes from hot underground water and steam, can produce electricity for 5 cents to 6 cents per kilowatt hour, the report said. Solar prices weren't quoted in the study.

However, John O'Donnell, executive vice president of Ausra, said the cost of solar power is declining in relationship to conventional fuels.

"It's now reaching a price where (solar thermal plants are) competitive with gas-fired (generation)," O'Donnell said. Solar thermal plants use the heat of the sun to boil water and spin turbines that generate electricity.

Natural-gas-fired power plants generate electricity for 6.5 cents to 7.5 cents per kilowatt hour, according to the Public Utilities Commission.

Within three to five years, O'Donnell said solar thermal plants will be competitive with the price of power from coal-fired plants. He also anticipated new federal regulation of carbon dioxide gas emissions during that time period that will add to the cost of coal power.

Coal-fired plants can generate electricity for 5 cents a kilowatt hour, a price that does not include the potential cost of complying with expected federal carbon dioxide regulations, according to the study.

Congress is considering alternative ways to reduce carbon dioxide emissions, ranging from a carbon tax to a cap-and-trade system. Under a cap-and-trade system, industries can buy carbon credits to increase their emissions or sell credits to other companies and reduce their carbon dioxide emissions.

The study estimates that the cost of carbon regulations could range from 0.93 cents per kilowatt hour at the low end to 7.21 cents at the high end. Those costs would be added on top of retail electric prices which were 9.2 cents in 2005.

David Sims, director of project development at the Ely Energy Center, rejected those numbers, saying the cost would be less than the lower end of the study's range of estimates.

Sims said the arguments made in the report were made to the Public Utilities Commission last year by environmental groups who banded together as Nevadans for Clean and Reliable Energy. The commission, which was considering Nevada Power Co.'s long-term energy supply plans, rejected the arguments, Sims said.

"The commission agreed that a balanced plan of renewables and coal was necessary," Sims said. "It's nice to suggest (that renewable energy and conservation would be sufficient without coal power). But it doesn't meet the needs of the reality of the situation."

Nevada Power of Las Vegas and affiliated Sierra Pacific Power Co. of Reno will be overseeing renewable energy developments totaling $2 billion between now and 2015 in order to satisfy Nevada law on renewable energy, Sims said. Those investments include those by the utilities and by companies that contract to sell renewable power to the utilities.

Contact reporter John G. Edwards at jedwards@reviewjournal.com or (702) 383-0420.

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