In 2024, the Colorado Energy Office (CEO) commissioned a report from Ascend Analytics, entitled Pathways to Deep Decarbonization in Colorado’s Electric Sector by 2040, to evaluate the potential to achieve near-zero and zero greenhouse gas emissions from the electricity sector by 2040.
The study examined a business-as-usual—or Economic Deployment—scenario and six other scenarios that achieve zero carbon emissions by 2040. Notably, the report claimed that “with careful planning, Colorado can move to a reliable, affordable, and deeply decarbonized electrical grid by 2040.”
However, an analysis conducted by Always On Energy Research (AOER) found Ascend Analytics’ preferred zero-emissions by 2040 scenario, the “Optimized 100” scenario, hereafter referred to as the “OT100” scenario, would lead to higher costs than using natural gas or nuclear power to meet Colorado’s energy needs and cause massive rolling blackouts.
➤ AOER found that the true cost of the OT100 scenario is an additional $114.3 billion through 2040 compared to operating the current grid. If these costs are discounted at a six percent discount rate, as was the case in the Ascend analysis, the costs would be $56.6 billion, which is $5 billion higher than the costs reported in the Pathways to Deep Decarbonization Report conducted by Ascend Analytics.
➤ These higher cost estimates are due to several factors, including the fact that AOER estimated additional transmission line expenses, while Ascend did not, and AOER used current capital costs assumptions for new electricity generation facilities, rather than future projections, and more realistic costs for green hydrogen.
➤ OT100 scenario costs explode after 2040, costing an additional $214.6 billion through 2050, due to the high cost of using capital-intensive 12-hour battery storage and green hydrogen as a fuel for power plants to generate electricity during periods of low wind and solar generation.
➤ The OT100 scenario would result in rolling blackouts in 2040 during periods of low wind and solar output when there is not enough electricity stored at battery storage facilities to keep the lights on.
➤ From 2045 through 2049, the blackouts would be massive, with the longest blackout lasting 66 hours and the largest causing 59 percent of the state to suffer from power outages at its peak. These blackouts occur because the state would run out of stored hydrogen needed to generate electricity during low wind and solar output periods and charge the batteries on the system.
➤ These blackouts would be costly to Colorado’s economy. AOER identified a hypothetical nine-day period in 2047 where Colorado would experience 136 hours of blackouts, which would cost Colorado’s economy more than $5.2 billion in lost economic activity.
➤ Using natural gas to replace all but one of Colorado’s coal plants (Comanche 3) and meet the growing demand for power would only cost an additional $9.5 billion through 2040 and $15.3 billion through 2050, compared to operating the current grid. This makes the 2050 cost of using natural gas far less than the $214.6 billion in the OT100 scenario. This Natural Gas scenario would have zero blackouts and cost a fraction of the price of the OT100 scenario.
➤ Colorado could build 15,500 megawatts (MW) of new nuclear power, batteries, and combustion turbine natural gas plants for an additional $73 billion through 2040 and $145.9 billion through 2050, compared to operating the current grid. This means using nuclear power, natural gas, and battery storage will cost $41.3 billion and $68.7 billion less than the cost of the OT100 scenario, respectively, while achieving emissions reductions of 90 percent with zero blackouts.
➤ This plan balances costs and emissions reductions while taking advantage of recent legislation allowing nuclear power to qualify as a “clean” resource for meeting the Centennial State’s decarbonization mandates.
All energy decisions have trade-offs. Using natural gas power plants to meet growing demand will provide the lowest-cost electricity for Colorado families and businesses, but achieve the fewest emissions reductions on a per megawatt hour (MWh) basis. Nuclear can achieve reliable electricity with large reductions in emissions, but at a higher price tag than natural gas. The OT100 scenario is the worst of all worlds, subjecting Coloradans to high prices and rolling blackouts, but it would reduce emissions the most.
Click here to read the full issue paper Colorado’s Green Hydrogen Boondoggle by Isaac Orr and Mitch Rolling.
