AE Renewable Energy Costs

Blessed with abundant natural resources and effective market-based rules and incentives, Texas has leveraged federal policies to become America’s biggest renewable energy success story, especially with wind power.

Austin Energy was at the forefront of action in Texas, and for many years did an exceptional job capitalizing on cost-effective renewable energy opportunities. The following demonstrates Austin’s past success.

“Current” Costs: The last “all in” comparison of Austin Energy’s actual electric generating costs from different sources was provided by the utility for 2008. The bottom line: Efficiency and renewables are among the lowest cost of all options.

FOR DETAILS & SUBSTANTIATION OF COSTS

Energy Efficiency: $24 per MWh saved.

Renewable Energy: $33 per MWh produced

Nuclear Power: $35 per MWh produced

Coal Power: $41 per MWh produced (if including actual spending for pollution control equipment);

$25 per MWh (if only counting fuel, operations & maintenance expense.)

Natural Gas Power: $66 to $126 per MWh produced.

SOURCE: PowerSmack, based on various Austin Energy sources provided in 2009.

Future Costs: The generation plan is largely about what new sources will be used in the future. On pure economics, new wind and solar are attractive relative to their fossil fueled and nuclear counterparts. Wind power is the lowest cost of all new energy sources in Texas. Of resources primarily used to meet peak energy needs, solar is now cost competitive with natural gas turbines.

SOURCE: Slide 28, Larry Weis, Austin Energy presentation to City Council, Dec. 9, 2010.

Past Costs: For the first time on Thursday, Austin Energy disclosed its historical renewables costs (kudos to Larry for providing that). It says AE’s wind and landfill gas contracts have been extremely cost-effective, between 2 and 4 cents/kWh – this is cheaper than any new power option, cheaper than AE’s average cost of generation (5.6 cents/kWh in 2008), and generally less than what AE charges customers just to fuel its polluting power plants (3.65 cents/kWh in 2008 & 2009).