ORIGINAL REPORTING: Customer Demand And Economics Move Rural Co-ops To New Energy
How rural co-ops are shifting to a cleaner power mix; Driven by wind credits, low gas prices and consumer demand, rural co-ops are finding new ways to grow renewables
Herman K. Trabish, Aug. 21, 2017 (Utility Dive)
Editor’s note: Economics continue to drive the exciting power mix transition described here but it has slowed in response to the uncertainty created by federal anti-New Energy policies.
The generation mix of rural electric cooperatives is changing at the same swift pace as the rest of U.S. power system. The biggest changes are in wind energy and natural gas investment. Wind was the biggest non-hydro renewable resource deployed by cooperatives in 2017 and an estimated 850 MW of new wind capacity was planned by the end of 2018, accounting for nearly two-thirds of planned additions in that period, according to the National Rural Electric Cooperative Association (NRECA). To make room for the new generation resources, co-ops shuttered or converted 700 MW of coal between 2014 and 2016, and are expected to shutter or convert up to 1,344 MW more by 2028, eliminating roughly 8% of co-op coal capacity.
The main growth drivers for co-ops, just as for the market at large, is the federal production tax credit (PTC) and state renewables mandates, according to NRECA. Another major factor are rapidly falling costs for new technologies. The combination of these factors has driven power purchase agreement (PPA) prices from an average $70/MWh in 2009 to an all-time lows of below $20/MWh this year, making wind an offer co-ops can’t refuse. And low gas prices have spurred a shift from coal-fired generation, which has typically dominated co-ops' power mixes. But those are not the only solutions co-ops are examining to achieve a cleaner power mix. Some co-ops are advocating for policy changes to encourage investment in electric vehicles and water heaters, to obtain more system flexibility… click here for more
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