The Data are In: Renewable Energy Is Cheaper Than Coal in Colorado
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By Audrey Wheeler
Renewable energy provides tremendous benefits to Colorado. Wind and solar employ more than 15,000 Coloradans and bring needed dollars to rural areas. So far, construction and operation of wind power has had an estimated $2.7 billion economic impact on Colorado’s eastern counties alone. Meanwhile, clean energy saves us money by keeping our air clean, preventing pollution-related health problems, and slowing our contributions to climate change.
But over time, it’s become clear that there’s another huge benefit of renewable energy that doesn’t get discussed enough: it’s become cheaper than coal in Colorado as well as many other places across the nation.
To take a step back: as recently as 2008, coal powered half of America’s electricity. In seven short years, it has dropped to one-third of our energy supply. While natural gas is responsible for some of this shift, wind and solar energy are playing a growing role as they continue to take off around the country. Wind powers around 36 percent of Iowa’s electricity generation, the largest percentage of any state. In Colorado, it’s about 17 percent, while solar is 1 percent.
Prices of renewable energy have been been dropping over the past decade. The cost to install solar has fallen by more than 70 percent since 2010. Changes in solar panel cost over time can be explained by Swanson’s Law, which states that the price of solar panels decreases by about 20 percent for every doubling in global solar capacity. The law reflects a phenomenon seen across the economy: new industries face a major learning curve, and as they improve, prices fall. In 2015 — the biggest year ever for solar installation around the world — prices fell by 5 to 12 percent. While solar may not always be able to out-compete coal on the short-term time scale, the cost depends on where you are in the country and who is buying solar power (residents or utility companies). Meanwhile, it continues getting cheaper each year.
When it comes to wind production, the savings are in large part about physics. Manufacturers increased the length of wind turbine blades over the past several years, while engineers have added more height to wind turbine towers. This has caused big changes to power production and efficiency, and has brought down the cost of wind energy. Now, wind is the cheapest form of energy available in many central U.S. states, including Colorado.
Moreover, coal has several hidden costs that make it fundamentally more costly than renewables. It is expensive to extract and it is a finite resource, whereas once wind turbines or solar panels are installed, the wind and sunshine are free. When the actual fuels used are free and the only costs are the systems for generating energy, it is a huge leap for society.
But we’re not the only ones who are noticing that renewables are cheaper than coal. Here are business leaders and elected officials are touting the fact:
David Eves, president of Xcel Energy’s operations in Colorado:
“We know our Colorado customers and communities want affordable energy from increasingly clean energy sources, and it is our goal to provide what they value. The Rush Creek Wind Project [will] be one of the largest wind projects in Colorado, with the lowest-cost energy on our Colorado system.”
Colorado Governor John Hickenlooper:
“The average price of wind energy declined nationwide by more than 50% from 2009 to 2014, while average solar energy prices declined more than 78% over the same period. Natural gas prices are at historic lows. One current Colorado wind project, our largest ever, will employ 350 people in its construction and is expected to save ratepayers $400 million over its lifetime.”
Republican Iowa Governor Kim Reynolds:
“Wind energy brings 9,000 jobs and more than $13.5 billion in investments [to Iowa] — and we’ve done it all without sacrificing price or reliability. In fact, Iowa has the most reliable electric grid in the country, and the average energy cost for all sectors here is the sixth cheapest in the nation.”
Stephen Byrd, of Morgan Stanley research:
“Numerous key markets have reached an inflection point where renewables will have become the cheapest form of new power generation by 2020, a dynamic we see spreading to nearly every country we cover.”
Alice Jackson, vice president for strategic initiatives at Xcel:
“We don’t even look at coal anymore.”
Michael Taylor, senior analyst at the International Renewable Energy Agency:
“What Colorado is experiencing is what is happening around the world. It is now quite an outdated opinion to consider renewables the more expensive option.”
Some might argue that this progress, and plummeting renewable energy prices, are due to assistance from the federal government. But government investment is critical for nascent technologies and for setting up new infrastructure and industries. As one news outlet put it, these subsidies are “an investment to drive renewable energy costs down by expanding the market and capturing economies of scale.” Just as it was government, not business, that first got a man on the moon, government investment can jumpstart the industry.
Not only is renewable energy cheaper than coal, it is also incredibly important when it comes to jobs. Indeed, there are more renewable jobs than coal jobs in America. Nationwide, twice as many Americans work in solar as in coal, and solar is creating jobs at about twelve times the rate of the rest of the economy. Colorado’s solar employment increased by 20 percent from 2015 to 2016, and now has roughly 8,000 solar jobs, while wind employs about 7,100 Coloradans. In total, clean energy employs 62,000 Coloradans today, which dwarfs the 4,600 jobs provided by coal, oil, and natural gas generation combined, as well as the roughly 1,200 coal mining jobs.
In addition to jobs, renewable energy is a boon for our state when it comes to certainty for utilities and businesses. As the New York Times put it:
“The clean energy push allows…utilities to lock in low power prices for decades, creates manufacturing jobs, puts steady money in the hands of farmers who host wind turbines and lures big employers who want renewable power.”
And finally, when considering the price of different types of energy, some of the largest costs are the ones unseen by energy companies or politicians. These are the costs to society for polluting our air and harming our health. Though these costs have been ignored for most of our history, that does not mean they are not important. Power plants fueled by coal or oil emit dangerous pollution that damages our health and our atmosphere. These include mercury, other toxic metals such as arsenic, chromium and nickel that can cause cancer, and acid gases that cause lung damage and contribute to asthma, bronchitis and other chronic respiratory diseases. Coal plants also emit fine particle pollution, which causes premature deaths from heart attacks, bronchitis, and asthma.
The numbers vary, but researchers agree that considering these long-term, big-picture costs increases the price of fossil fuels. Estimates range from 5.7 extra cents per kilowatt-hour to 26.89 cents per kilowatt hour. These costs, which include the economic, health, and environmental damages, are directly passed on to the public. This includes the public health burden of air and water pollution, and the increased healthcare costs for those impacted.
Further, when we mine and burn fossil fuels we release greenhouse gasses — mostly carbon dioxide and methane — into the air. These gasses are thickening our atmosphere and causing global climate change, which will have long-term disastrous effects on every species on the planet (including us). The economic impacts of continuing business-as-usual instead of acting now to reduce our carbon emissions are daunting.
One of the most prominent false ideas carried by fossil fuel advocates and lobbyists is that renewable energy is more expensive than coal. While this may have been true 20 years ago, it’s time to put that idea aside. The U.S. is in the midst of a major transition to clean energy. As consumers demand access to cleaner energy and cleaner air and our technologies improve, prices for renewables are falling across the board. With market forces increasingly favoring renewables, dirty energy is no longer a smart investment.
Are you wondering if it is possible for the U.S. to run entirely on clean, renewable energy? It is. Read more here.
Are renewables reliable? Yes. Don’t they provide spotty energy? No. Read more here.
Like this story? Learn more about the key environmental issues in Colorado at ConservationCO.org.
