Renewables, Reliability, and Transmission

How do you feel when the lights go out? As was stated in the last post, easy answers are rarely wise answers, especially when complex systems are involved. In addition to raising our costs, the current push for a “100% renewable standard” in Columbia could also adversely affect our reliability of service.

Renewable resources do not function in the same way as dispatchable resources, and this can have unintended consequences for keeping our lights on. This was a lesson learned from the rolling blackouts in California in August of 2020. As we move towards cleaner energy, we should do so in a way that keeps the lights on and at a reasonable cost. This means better understanding the changes in planning assumptions and analysis that are needed to accommodate a shift to renewable resources, monitoring the use of those resources in the real world, and adjusting as needed.

Proponents of the “100% renewable by 2030” standard are also setting up a false dichotomy between the use of renewables for producing energy and the need for new transmission infrastructure. Like other production resources, renewable resources require an adequate transmission and distribution infrastructure. And climate change also increases the need for a resilient transmission infrastructure. Our costs of improving that infrastructure only increase with delay, and those increasing costs will make it more difficult to make the investments that renewable advocates seek.

Renewable Energy: At What Cost?

Easy answers are rarely wise answers, especially when complex systems are involved. So it is with the current push to move to a “100% renewable standard” in Columbia. That move could significantly raise our costs of electric service.

In general, using renewable resources costs more (average costs reported in the 2021 Columbia Water & Light Renewable Energy Plan were $36.51.MWH for renewable and $25.86/MWH for non-renewables). In recommending a move to a “100% renewable standard”, the Integrated Electric Resource Master Plan Task Force failed to present any analysis of the cost of doing so, although it did acknowledge that cost might be an issue. And many of those who appeared at the recent public comment session – backed by the Sierra club and the Climate and Environment Commission (CEC) – pushed for an even more aggressive standard of “100% renewables by 2030.” Again there was no discussion of the cost.

In order to meet this more aggressive target, we would be buying additional resources that we do not currently need to provide electric service to customers. As is laid out in the Siemens Integrated Resource Plan that was prepared for the task force, CWL is already overbuying resources to meet renewable goals. In fact, it is showing a “long position” through 2030. The additional costs of overbuying to meet renewable targets are not fully covered by the amounts received when the existing resources that are then displaced are resold. And if market rates at the time of sale do not meet planning projections — as happened in Texas when a municipal utility followed that same strategy – our costs to meet more aggressive renewable targets will be even greater than projected.

The Sierra Club of Texas has acknowledged that the move to incorporate more renewable energy into a municipal portfolio can be costly, and that affordability of electric service must be a key criterion in determining an appropriate plan. They also emphasized that any such plan must be the result of a robust and public engagement process. Both of these factors – affordability and sincere public engagement – have been missing in Columbia’s push to renewable energy. 

In 2004, voters in Columbia approved the existing renewable energy ordinance that set targets for acquiring renewable energy. These targets were specifically subject to a cost cap. That is, the cost of acquiring the renewable resources to meet the stated targets could not cause electric rates to increase more than 3% . The Task Force’s draft report that was provided for public comment reflected the CEC position that this cap could simply be removed by Council fiat and without putting the issue again to the voters. In approving its final set of recommendations, the Task Force correctly acknowledged the importance of maintaining affordable rates, and acknowledged the cap on increases. If there is to be a move to more aggressive renewable targets, the costs of that move should be fully disclosed, and the question of how to proceed should be again put to the voters.