Six Months Later: How Is Austin Energy Doing On Its Solar, Renewable, and Efficiency Goals?

Photo: ©albradenphoto.com

By Cyrus Reed

[Update: July 1, 2015: On June 25, Austin City Council approved a contract for the independent study. However, City Council chose to award the contract to Navigant Consulting. Navigant is expected to produce a draft within the next three to four months of the independent study on the generation plan. In addition, Austin Energy also made a full presentation of the results of the Solar RFP, and announced that 1,295 MW of the solar responses were offered at prices below AE’s 2014 150 MW Recurrent Solar Project, which have been announced to be roughly $50 per MWh. Austin Energy said they would not be coming back with recommendations on a new contract with solar providers until this fall, in part to wait for the results of the independent study.

Also, now is the time to tell Mayor Adler and your City Councilmember to fund low-income energy efficiency programs; additional clean energy programs like community solar; and the retirement of our aging fossil fuel power plants!]

As most readers of our blog know, on December 11, 2014, the Austin City Council adopted a new generation resource plan that establishes long-term goals for Austin Energy for 2025. So how is Austin Energy doing?

The plan established a process for ending the use of the two natural gas steam units at the Decker Creek power plant and ending the use of our share of the Fayette coal plant beginning in 2022. The Gen Plan also calls for an independent study to examine the economic and environmental pros and cons of investing in a new more modern combined-cycle natural gas plant at Decker or Sand Hill, as well as prospects for investing in renewable energy, energy efficiency, energy storage, and/or purchasing power off the market as an alternative to building a new natural gas plant.

Among other provisions, the Gen Plan established:

• A 200 MW local solar goal by 2025, of which 110 MW must be customer-sited solar
• A 750 MW non-local utility-scale solar goal by 2025
• An overall 55% renewable goal by 2025
• A goal of reducing peak demand by 900 MW between 2007 and 2025, including at least 100 MW of demand response
• A 30 MW goal for local storage between 2015-2025

Finally, the plan requires that Austin Energy also issue a Request For Proposals (RFP) for up to 600 MW of solar and issue a Request For Information (RFI) for up to 170 MW of large-scale energy storage resources to get more information about their potential.

So how are they doing?

First, Austin Energy recently released updated figures for solar, efficiency, and demand response through 2014, while also announcing that two new wind plants had increased our use of renewables. The news looks pretty good on that front.

Solar, Local Solar, and Efficiency Goals Updated

As the table shows, updated information from 2014 as well as estimates for 2015 indicate Austin Energy is on its way to meet the local solar and efficiency goals. Most recently, Austin Energy announced it had reached an agreement with PowerFin to build its first community solar project of 2.3 MW. Interestingly, the project will be boosted by Austin’s first large-scale battery project – a 1 MW battery pack added to the community solar project to boost and extend solar use, bringing the total project to 3.3 MW. In addition, Austin Energy is looking at expanding the city’s use of chilling stations – a form of thermal storage – through an additional downtown plant that should be completed next year. Recently, the City Council approved a new $4 million contract to begin design of the additional chilling station, while another contract to add chilling capability at the Domain is also on the City Council agenda for June 18. While it’s only a start, Austin Energy would increase its utilization of energy storage as a resource to help us stabilize the grid and meet peak demand with several additional MW online by 2016.

Getting to at least 750 MW of non-local utility scale solar is still a ways off, but with the first 150 MW currently being constructed in West Texas, and more recently, an RFP for the additional 600 MW of solar being issued, these goals seem achievable. At a recent Electric Utility Commission meeting, Austin Energy reported, in fact, that they had received more than 140 separate proposals from more than 30 solar firms. Clearly, solar power is available. Austin Energy actually reported that if all of the proposals were added cumulatively, there were nearly 8,000 MW of projects being proposed. Austin Energy will be making a full presentation of the results of the RFP at the next Austin Energy Oversight Committee hearing next week.

Austin’s overall renewable goals also received some good news when its two most recent power purchase agreements (PPA) for wind came online this spring. With the operation of these two projects, Austin Energy now has about 1,300 MW of wind under contract.

According to an Austin Energy press release, the 300 MW Jumbo Road wind project came online on April 22. The PPA for this wind power has a term of 18 years. In addition, Duke Energy’s 200 MW Los Vientos III project began commercial operation on April 24. Austin Energy will purchase power from Los Vientos III for the next 25 years.

Austin Energy estimates that it has reached nearly 30% renewable energy in 2015, even before the new community and large-scale solar plants come online in 2016. With those additions, Austin will have met its 2020 goal to reach 35% renewable energy four years early and will be well on its way to reaching 55% by 2025.

What about large-scale energy storage and the independent assessment of a new natural gas plant (or other alternatives)?  

Expect action soon.

While Austin Energy did issue an RFP for the independent six-month study, some contract issues delayed selection of a contractor. Now, however, Austin Energy is seeking City Council approval of selecting an energy consultant called Pace Global on June 18. If selected, this company would then prepare a draft study, which would likely not be available until late fall at the earliest, delaying consideration of either a new natural gas plant or an alternative until late in the year. [Update: City Council decided to push its decision on selecting a contractor for the independent study to its June 25 meeting.]

Also somewhat delayed is the proposed RFI to look at large-scale storage, though Austin Energy is indicating it will issue the RFI soon to look at the potential that large-scale storage could play a role in our generation mix.

While the future of the 2025 Gen Plan is still uncertain in some areas, it is moving forward. The goals – seen by some as way too aggressive and others as not aggressive enough – are being confirmed as achievable and cost-effective.

Stay tuned for more updates!