Introduction

Sometimes things are not what they seem. Nowhere is this more evident than in the realm of state and federal energy policies. In 2004, Colorado became the 17th state to adopt renewable energy standards when voters passed Amendment 37. Colorado reaffirmed its commitment to wind and solar energy in 2007 when the state legislature passed HB 1281, increasing the requirement for utilities to purchase renewable energy by 100%, and by adopting the Climate Action Plan in which renewable energy plays a central role in the state's strategy of reducing "greenhouse gas emissions by 20% below 2005 levels by 2020."¹ The expected environmental benefit of these measures is perhaps best summarized in this quote from Environment Colorado:

"Smog and air pollution continue to plague much of Colorado and part of the problem is caused by coal-fired power plants. Requiring a modest 10 percent of our electricity to come from renewable energy sources is equivalent to eliminating the pollution from 600,000 cars per year, thereby reducing smog and easing costly health problems."²

According to advocates, renewable energy will not only be a major tool to reduce our carbon output, but also, by displacing coal and natural gas, renewable energy will reduce smog and other air pollution, presumably by reducing sulfur dioxide (SO2) and nitrous oxides (NOX), principal components of ozone and smog.

This report, sponsored by the Independent Producers Association of Mountain States, concludes that the emissions benefits of renewable energy are not being realized as planned based on examination of four years of Public Service Company of Colorado (PSCO) operational history. Integrating erratic and unpredictable wind resources with established coal and natural gas generation resources requires PSCO to cycle its coal and natural gas-fired plants.³ Cycling coal plants to accommodate wind generation makes the plants operate inefficiently, which drives up emissions. Moreover, when they are not operated consistently at their designed temperatures, the variability causes problems with the way they interact with their associated emission control technologies, frequently causing erratic emission behavior that can last for several hours before control is regained. Ironically, using wind to a degree that forces utilities to temporarily reduce their coal generation results in greater SO2, NOX and CO2 than would have occurred if less wind energy were generated and coal generation were not impacted.

An analysis of the Electric Reliability Council of Texas (ERCOT), which also operates under a mandate to use renewable energy, validates the emissions findings for PSCO. The underlying problem is the same for both PSCO and ERCOT: the generation capacity of wind resources has become too large relative to the capacity that is available from coal and natural gas facilities. Natural gas-fired combustion turbines and combined-cycle facilities are designed to accommodate cycling. Because gas resources are insufficient to offset all of the wind energy produced in PSCO and ERCOT, coal units must be cycled to counterbalance the amount of wind that cannot be offset by natural gas. As a result, when the wind energy is generated at a high enough rate, PSCO is forced to scale-back generation from its coal-fired resources. But, coal equipment is not built for cycling. Coal boilers are designed to be operated as a base load resource – in other words, to operate at a consistent output level all the time. Cycling causes coal units to operate less efficiently and reduces the effectiveness of the environmental control equipment, substantially increasing emissions.

The results of this study help explain why PSCO’s coal-fired plants located in the Denver non-attainment area have experienced an increase in SO2, NOX and CO2 over the past few years. below shows the change in emissions generated at the plants in proximity to the Denver non-attainment area – Valmont, Arapahoe, Cherokee and Pawnee, and the Comanche plant located outside of Pueblo. Between 2006 and 2009 despite the introduction of over 700 MW of wind energy, all of the Denver area plants except Cherokee show higher levels of SO2, all show higher levels of NOX and all but Pawnee show higher levels of CO2. The Cherokee plant switched to a lower sulfur coal in 2008, thus, even the lower SO2 readings at that plant cannot be attributed to the benefits of wind energy. Furthermore, during the 2006-to-2009 period, generation from the non-attainment area plants fell by over 37%, which makes the increase in emissions even more significant particularly in light of the EPA’s announced intent to mandate tighter restrictions on SO2 and NOX emission levels by 2011.

The results also suggest that the problem will worsen over time unless mitigation measures are taken. The emission issues documented in this report are evident because PSCO has approximately 1,100 MW of wind capacity. Under the existing Renewable Portfolio Standard (RPS) and the current Integrated Resource Plan (IRP), wind capacity is anticipated to grow by a minimum of 100 MW annually through 2020. Moreover, the Colorado state legislature recently increased the RPS to 30% of sales by 2020, which will force PSCO to add even more wind capacity to its system. Unless the additional wind capacity is coupled with significantly more gas capacity, a reduction in coal capacity, or a combination of the two, the higher RPS will drive SO2 and NOX and possibly CO2 emissions higher, further exacerbating the ozone non-attainment area problems for the Front Range of Colorado.

There are national implications as well. Congress and the Obama administration are considering a national RPS. Before such a national standard is implemented, there is a compelling need to better understand where intermittent sources of energy such as wind can be integrated with existing nuclear, coal and natural gas capacity without producing cycling-induced emissions problems. The study’s findings relative to ERCOT in this respect are not encouraging. ERCOT, which has one of the nation’s largest natural gas-fired generation bases, acquires only about 23% of its energy from natural gas between the hours of 12:00 am and 8:00 am. Consequently, when wind comes online in ERCOT during the early morning hours, coal plants are forced to cycle. As cycling of coal plants is problematic in ERCOT, it is very likely that emissions will increase virtually everywhere else unless natural gas-fired generation is added simultaneously with wind.

Report Organization

This report is organized as follows:

o Chapter II provides an overview of PSCO’s generation capacity and utilization, basic data and analysis describing the various utilities and fuel sources that generate power in the state.

o Chapter III describes why coal plants are cycled, and what happens as a result.

o Chapter IV examines two specific “wind events,” quantifying the emissions and the implications of each, as well as how PSCO handled these events.

o Chapter V estimates the total incremental emissions that occurred as a result of using wind energy in the PSCO territory for 2008 and 2009.

o Chapter VI describes the interaction between wind, coal and natural gas in ERCOT, showing how the same dynamics evident in PSCO’s territory have emerged as the magnitude of wind generation has grown.

o Chapter VII examines the emissions implications of one possible mitigation measure: retiring Cherokee and Valmont coal fired plants and replace their generation with power produced from either the existing or new gas-fired facilities.

o Chapter VIII draws conclusions and suggests several recommendations regarding mitigation measures that might be implemented to improve the impact of wind on the PSCO system.

Data Sources

This report is built on a variety of publicly available primary and secondary data sources. The general descriptive information generally comes from basic Energy Information Administration databases including Forms 860, 861 and 423; the Federal Energy Regulatory Commission Form 1; PSCO documents, including their annual 10K financial report, and other reports available on the PSCO public website.

The core of the analysis is based on detailed primary information reported to the Federal Energy Regulatory Commission (FERC) and the U.S. Environmental Protection Agency (EPA) Page 12 of 77 by PSCO. FERC Form 714 data provides hourly load generation for operational control areas such as that of PSCO. Additionally, the Continuous Emissions Monitoring System (CEMS) of the EPA is the source of boiler-specific hourly generation and emissions data. This information is relied on heavily for the analysis of the July 2, 2008, and Sept. 28-29, 2008, wind events discussed in Chapter IV. Finally, ERCOT requires generators to publish on a 15-minute basis their generation by fuel and type of facility, enabling analysis of the interaction between wind, coal and natural gas combustion turbines and combined-cycle facilities in the ERCOT region. These data provide the analytical basis for the analysis of ERCOT operations in Chapter VI.

1 Colorado Climate Action Plan http://www.coloradoclimate.org/

2 Environment Colorado website, http://environmentcolorado.org/envcoenergy.asp?id2=22373

3 As used in this report, the term cycling refers to sudden increases or decreases in power generation output. Cycling occurs for a variety of reasons including making way for alternative generation, maintenance and/or equipment failure or sudden changes in load size.

To access the full document, click on the link below.