Note: This post represents the latest edition of Independence Institute’s annual analysis of federal electricity data distilled for Colorado. Click here to see past editions.
While Colorado’s electric grid has been in flux for years, 2024 may come to be remembered as the turning point for Colorado’s energy future.
The U.S. Energy Information Administration (EIA) published its latest Electric Power Monthly report late last month. The new edition provides data gathered through December 2024. The data is preliminary and will continue to be refined by the agency until it releases its final Electric Power Annual report this October. Until that time, however, it offers the most comprehensive and up-to-date look at how Colorado’s electricity sector performed last year.
Here are some of the key data points and what they say about how Colorado’s electric grid changed in 2024.
Generation
Coal was no longer king of Colorado’s grid in 2024. The resource was dethroned as the single-largest source of utility-scale electricity generation for the first time in at least 40 years, perhaps ever.
Instead, natural gas led the pack among individual resources, generating 30.4 percent of the state’s electricity on the year. Gas was followed closely by wind, which provided 30 percent of the state’s power last year. Meanwhile, coal—which generated a third of the state’s power in the preceding year and was responsible for 68 percent of the state’s power as recently as 2010—provided just 28.1 percent of Colorado’s in-state electricity generation in 2024.
Overall, fossil fuel-fired generation provided roughly 59 percent of the state's electricity in 2024, while renewables of all forms produced 41 percent of the utility-scale electricity generated in the state.
Gas generation secured the top spot thanks to a modest increase (3.4 percent) in output from 2023. Overall, natural gas-fired power plants generated more than 17.8 terawatt hours (TWh) of electricity in 2024. By contrast, coal-fired generation declined more than 12 percent, accounting for just under 16.5 TWhs of electricity.
Among renewables, wind generation rebounded last year after a year-over-year slump from 2022 to 2023. Wind generation increased by more than 9 percent in 2024, producing more than 17.3 TWh of electricity.
Utility-scale solar generation saw a 37 percent production boost last year, continuing its rapid growth in Colorado. Nevertheless, it remains a relatively small share of the state's overall electricity portfolio for now.
Hydroelectric power generation remained relatively flat from the previous year and still makes up a minor share of the state's power production. Electricity produced from biomass declined 39 percent year-over-year.
Net Summer Capacity
Colorado’s net summer capacity, defined by the EIA as the maximum output its generating resources can supply to the grid during periods of summer peak demand, increased in 2024 compared with 2023.
The state’s total 2024 system net summer capacity was roughly 19.8 gigawatts (GW), up from 19.5 GW in 2023. That modest bump was almost entirely attributable to increased solar and battery storage capacity.
Fossil fuels were responsible for around 10.4 GW of that capacity, while renewables and storage provided the remaining 8.4 GW.
These numbers are expected to continue shifting in renewables' favor as utilities and independent power producers work to meet the state's aggressive decarbonization mandates.
According to EIA data, at least 138 MW of new gas, 400 MW of new solar, and 20 MW of new battery storage projects are expected to be completed and in service throughout 2025. Meanwhile, approximately 1,267 MW of existing coal capacity in Brush, Craig, and Pueblo is slated to be retired by the end of the year.
Annual Capacity Factors
An electric resource’s “capacity factor” refers to the ratio of electricity actually produced by a generating unit compared to the theoretical maximum it could have produced if it operated at continuous full power during a given period of time.
As intermittent renewable energy resources like wind and solar become increasingly responsible for Colorado's energy supply, capacity factor data takes on a heightened role in explaining future reliability concerns with the state's electric grid. Unlike the thermal plants (coal and gas) that have traditionally formed the backbone of the Colorado's electric system, intermittent renewables cannot modulate their output to meet system demand. They simply produce what they can when weather conditions permit.
For 2024, Colorado’s wind fleet had an average annual capacity factor of 38 percent, while the state’s solar resources had an average annual capacity factor of 24 percent. Both are roughly in line with national capacity factor figures.
Average Electricity Prices
In 2024, the average retail price of electricity delivered to Colorado's residential ratepayers was 15.06 cents per Kilowatt hour, up around five percent from the 14.32 ¢ / kWh paid in 2023.
Colorado's rates were again lower than the national average of 16.48 ¢ / kWh for residential ratepayers in 2024. However, Colorado's average retail rates were about seven percent higher than the average paid by residential customers in the broader eight-state Mountain West region, which includes Arizona, Idaho, Montana, Nevada, New Mexico, Utah, and Wyoming. In fact, Colorado's rates were higher on average in 2024 than every individual neighboring Mountain West state.
