Colorado Renewable Energy Profile, Part 2

As discussed in Part one of this two-part feature, energy policy in Colorado has focused on developing and investing in renewable energy resources and energy conservation and efficiency as a pathway for economic development and mitigation of climate change ever since the November 2006 election of Bill Ritter as governor.

The state's electric utilities are key players as well. In addition to offering commercial and residential "green" power incentives, Xcel Energy — the state's largest supplier of electricity — is sourcing an increasing amount of electricity from renewable sources, including buying power from SunEdison's 8.22-megawatt (MW) solar PV farm in Alamosa — the largest built to date. Other leading renewable energy companies, such as the U.S. subsidiary of Denmark's Vestas, a world wind power industry leader, are building manufacturing facilities and bringing renewable energy jobs to the state.

With a wealth of public and private R&D resources, Colorado has also become an incubator for solar PV start-ups, a list that includes AVA Solar, Ascent Solar and PrimeSolar, all of which have attracted enough capital to move forward with plans to ramp up to commercial-scale manufacturing of thin film solar PV.

Yet despite the 2007 passage of a new version of Colorado's Renewable Electricity Standard, which raised the bar by calling for investor-owned utilities to source 20% of power supplies from renewable sources by 2020 and 10% for municipal electricity suppliers and co-ops, some industry insiders believe the targets are not high enough, and they're worried that renewable energy resource development and investment in the state will slow down just as activity elsewhere in the U.S. and around the world, scales up.

Approaching a Critical Juncture?

Following through on its early success in the renewable energy arena is now the challenge facing Colorado. Getting the state's two biggest utilities — Xcel and Tri-State Generation and Transmission Association Inc. — on board has been a big step forward.

"There are fantastic, wonderful things going on in Colorado with regard to solar and renewable energy, but there's huge uncertainty in the solar PV market at the moment as well," says Blake Jones, president of Namaste Solar and a board member of COSEIA, the Colorado Solar Electric Industry Association.

Xcel Energy runs Colorado's largest solar incentive program, one that Jones estimates accounts for well over 80% of activity in the solar PV market. He points out that while Xcel, according to the resource development plans it submits to Colorado's Public Utilities Commission, intends to install 16-18 MW of on-site PV in 2008, that figure drops to 12 MW in 2009, 8.5 MW in 2010 and 3 MW in 2011.

"Xcel's plans indicate that the market will shrink and go away at a time when the market elsewhere will be growing and booming," Jones cautions.

"A 2-MW project at Denver International Airport, a 2-MW project at Belmar [developed, owned and operated by MMA Renewable Ventures], a new neighborhood mall, a 1-MW SunEdison project on federal property...Just a handful of projects make up the majority of the 16 to 18 megawatts being installed this year," according to Jones.

"What we're finding is that the goals we set for ourselves are easier to achieve than what we originally thought...Many naysayers thought they were too aggressive originally. Well, within a couple of years those goals were revised and doubled in House Bill 1281...Now, we're finding ourselves in a similar situation. Utilities are finding that it's easier and cheaper to comply with the goals than previously thought.

"We need to work with the legislature, with Xcel, with the PUC and with all other stakeholders to figure out how we're going to keep the solar industry growing; otherwise we're in danger of losing all the jobs and business that have been created over the past three years."

Keeping the Snowball Rolling: Amendment 58

As Environment Colorado's energy advocate, Keith Hay is working to ensure that Colorado's renewable energy economy keeps growing.

"Both Amendment 37 and House Bill 1281 were always meant to be a floor and not a ceiling...What we're seeing is that some of the cheapest electricity available is coming from renewables," Hay told RenewableEnergyWorld.com. "We're looking at ways of working with the solar energy industry and legislators to ensure that Colorado's solar energy market will continue to grow."

Both Hay and Jones note that the extension and expansion of federal investment and production tax credits for renewable energy passed by Congress as part of the financial industry and economic rescue package provides a big boost.

Having been instrumental in advocating for passage of Colorado's original Renewable Electricity Standard — 2004's Amendment 37 — and last year's revised RES, Hay says that Environment Colorado's renewable energy effort is now focused on passage of Gov. Ritter's Amendment 58, which proposes to rescind an estimated US $300 million worth of longstanding oil and gas industry tax credits and direct the savings into educational system funding and investing more in developing renewable energy and clean technology companies.

This year's ballot (November 4) is the biggest in Colorado for 100 years and the oil and gas industry is spending a lot of money to oppose Amendment 58, Hay notes. "One thing we know is that we're going up against the richest, most well-funded industry group, and that we're fighting an uphill battle to convince Coloradoans they don't need to subsidize oil and gas at a time when they're making record profits."

From Top-down to Bottom-up

According to the Governor's Energy Office, 44 utilities — a mix of municipal, co-op and investor-owned — are involved in generating and transmitting electrical power throughout the state. Though Xcel and Tri-State account for the lion's share of the market, bringing the many smaller municipal utilities and co-ops on board in developing a renewable energy economy is critical to its success and long-term viability.

Some have been reluctant to adopt and promote renewable energy alternatives, preferring to take a wait-and-see approach while arguing that, at present, doing so would only jack-up customers' electricity and heating/cooling bills. Others are taking the renewable energy drive to heart, focusing on promoting and facilitating energy conservation and efficiency as a first step while working up some creative ways to tap into local, as well as more distant, renewable energy and power resources.

The Delta-Montrose Energy Association (DMEA) has been at the forefront of this kind of change. Delivering some 100 MW of power to customers throughout its territory on Colorado's Western Slope, DMEA is diversifying into power generation. It has set a goal of producing 5% of its power needs — all of which it currently purchases from Tri-State — from local renewable resources by 2010.

At present, it looks like much of that will come from small-scale hydropower, according to Phil Zimmer, DMEA's key accounts supervisor. "We have a lot of water, different watersheds...All the irrigation here is still done predominantly by flood irrigation...We plan to drop hydro plants where we have some fall without hurting anything just by using irrigation ditches."

"DMEA is a little different," according to Zimmer. In probable contrast to many of his peers, he says, "I don't think it's a threat to my job if we quit burning coal or natural gas." In fact, Zimmer and his colleagues at DMEA are making careers dreaming up ways of developing local renewable energy resources and finding affordable ways for customers to tap into them.

Geothermal and Small-scale Hydro

The co-op has been a pioneer when it comes to promoting and installing geothermal heating and cooling systems which, when coupled with an energy audit that can entail purchasing EnergyStar appliances, checking insulation and putting in compact fluorescent light bulbs (CFLs), can take care of 99% of a typical home's heating and cooling needs.

Geothermal heat pumps are nothing unusual and can be installed pretty much throughout Colorado, as well elsewhere in the U.S., according to Zimmer. "Geothermal is a big part of meeting our 2010 goal," he said. "We embraced the technology and taught people how to install them."

Having found that local contractors were reluctant to take on additional training, preferring instead to continue working with propane heating, ventilation and air conditioning (HVAC) systems, about ten years ago, DMEA formed its own team to take up the challenge. The initiative has proved so successful that the group has become a DMEA department.

"Probably 50% of new homes in the area are now going geothermal. It's taken a long time, but we found some creative ways to take the barriers out of the equation," Zimmer said.

Through its Geothermal Loop Tariff Program DMEA will install on-site geothermal loops for free, and then charge customers a low monthly fee so that "they don't have to come up with all the money to get started...I see a day when we can do that with solar panels."

With the geothermal heat pumps' manufacturer and DMEA tweaking the system's design and on-site installation process, DMEA has been able to lower the power, and cost, required to operate the system's electric pump and compressor relative to the equivalent amount of heating and cooling that takes place. "We've found that for every 1 kWh spent running the pumps the systems pump out 4-5 kWh in heating or cooling," Zimmer said.

Energy Conservation: The Biggest Bang for the Buck

Zimmer seems to have the somewhat odd habit of giving away things for free as part of DMEA's efforts to promote and facilitate energy conservation and renewable energy. His department recently gave away 100,000 CFLs in an effort to promote energy conservation.

By giving away those CFLs for free and reducing its members' bills — money saved that can be put towards hydro or solar — DMEA also reduced its own power bill, Zimmer notes. "That's how we're going to get where we need to go.

"The first step is energy efficiency. Renewables, solar PV, all that stuff's great, but my point is that you can cut your usage by a third to a half tomorrow if we all put our heads together — there's the easy money. Go out and save yourself money then look at adding renewable energy...Solar and wind are worth doing but they're still very expensive. The biggest bang for the buck is conserving energy."

Andrew Burger is a RenewableEnergyWorld.com international correspondent currently based in Colorado.