Adding Remote Solar is OK, but Better Ideas Await Austin

by Mike Sloan. Oct 14, 2015.

I  was a member of the 2014 Generation Planning Task Force and, despite being a renewable energy consultant for 25+ years, did not vote in favor of the plan to add 600 MW of solar. (My reasons are explained below.) 

Regarding the expected October 15, 2015 vote on additional solar contracts for Austin Energy (AE),  I  offer the following thoughts in support of  those who favor  the solar contracts:

  •  OVERALL: it should be a pretty good long term deal but is likely to increase electric bills in the near term.
  • This solar deal is NOTHING like the 2008 biomass deal, which was a stinker environmentally (lots of stack emissions and water use) and super stinker economically (about 4X more expensive than current solar).
  • Locking in solar now takes advantage of federal tax incentives and low interest rates.

Some additional factors impacting the decision however:

  • Solar contract prices are likely to continue to decline (as stated by AE) but it may be several years before they drop below the level of current offers.
  • Additional solar investment seems at odds with city’s affordability goal and should be justified (e.g. that long term benefits outweigh short term added costs).
  • West Texas solar is not “local generation” and a moderate substitute for “ERCOT price spike” protection now provided by the Decker Gas plant, which conceptually the solar is intended to replace.

WHY I DID NOT SUPPORT THE 2014 GENERATION PLAN  (I abstained)

I strongly believed (and still do today) that there are more important actions Austin Energy should take, and that these have been pushed aside by focus on debate of local gas versus West Texas solar.  Hopefully Austin can address these issues going forward.

Austin should make Criteria-Based Decisions rather than Pre-Selecting Resources (e.g. Biomass & Solar)  “Affordability” and “Climate  Protection” were primary objectives of the 2014 Generation Plan yet the cleanest and cheapest options were not meaningfully considered.  Wind is cheaper than solar and, since it displaces coal use at night, reduces ERCOT carbon emissions much more than daytime solar (likely more than 2X more carbon reduction per $ invested by AE). Additionally, some local solar approaches are voluntary and require little if any investment by the city while providing many local benefits that distant solar projects do not.  Austin can improve in seeking out better ideas and getting more bang for its buck.

Utility Structural and Process Reforms Needed.  City staff, Council and the community seemingly do not share a common vision and their overall working relationship is much less than it should be. Moreover, the utility of today is not best suited to meet the needs of the future. It would be timely, if not overdue, for Austin to contemplate structural reforms such as business model, mission, transparency, technical support staff and governance.

Review and Refine Austin’s Affordability Goal.  It has been apparent for several years that Austin Energy would no longer meet the goal of being in the lower half of electric rates in Texas.  Austin can either ignore this aspect of the goal when making additional investments that put upward pressure on rates, or refine what the intended objectives of this affordability guideline should be.

Mike Sloan

  • Chairman – 1998 Sustainable Energy Task Force
  • Member – 2009 Generation Resource Planning Task Force
  • Member – 2014 Generation Planning Task Force
  • former employee (Solar Analyst) – City of Austin, Electric Utility Division
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