Moving Towards a Sustainable Electric Utility Sustainable Energy Options There are many ways for Austin Energy (AE) to reach carbon neutrality by 2020. If the US decides to regulate carbon dioxide emissions AE would face a business choice: whether it wishes to reach carbon neutrality by potentially paying hundreds of millions of dollars in carbon fees, taxes, or For Austin Energy March 2009 offsets, or whether it wants to invest in new sources of renewable or nuclear energy that cost more to build than its proposed energy resource plan but less to operate under a carbon regulation regime.

AE’s proposed resource plan appears to be a reliable, low cost, and low risk investment plan compared to the other seven scenarios evaluated by the project team. However, it also reduces direct CO2 emissions the least because AE continues to burn coal at a constant rate through 2020. If AE A Policy Research wishes to reduce its carbon footprint significantly by 2020 one option is to reduce its reliance on coal. For More So-called “clean coal,” nuclear, biomass, and geothermal create opportunities for replacing AE’s Project of the Lyndon B. Information current pulverized coal-fired baseload generation capacity with cleaner forms of baseload power. Johnson School of Biomass and geothermal resources face availability constraints that limit their potential to replace all

of AE’s current coal baseload power usage. It is not known if AE could build clean coal facilities Public Affairs If you would like to learn with carbon capture and storage at the necessary scale to replace FPP on its own by 2020. Additional more about Austin Energy, Sustainability nuclear or natural gas power generation capacity remain reliable substitutes for coal baseload power the LBJ School of Public generation. Co-sponsored by Austin Affairs, or Solar Austin, Sustainability is a please visit the following Energy and Solar Austin Renewable sources of energy present the most sustainable options for generating electricity, but are relative term regarding web sites: expensive and uncertain given the variable nature of solar and wind. Energy storage could help the degree of impact that reduce carbon dioxide emissions if coupled with onshore wind investments to reduce the risks www.austinsmartenergy.com a particular activity or associated with the variable nature of wind. The cost of implementing new renewable power www.utexas.edu/lbj power generation generating technologies, particularly solar technologies, into AE’s resource portfolio would need to www.solaraustin.org drop considerably between 2009 and 2020 to make a high renewable investment scenario cost technology has upon the Exploring Future Energy Options

competitive with AE’s proposed energy resource plan. environment and the This brochure presents a brief overview of availability of resources the findings of a research project on AE Power Generation Mix by Source (FY 2007) for future generations. “Sustainable Energy Options for Austin Therefore, one activity or Energy.” Several reports were prepared Purchased Renewable Power Energy technology that poses during the 2008-09 academic year by a 9.6% (landfill gas, less adverse policy research project team composed of solar, wind) graduate students from multiple departments 5.1% consequences for future Coal of The University of Texas at Austin through 32.2% generations than another the Lyndon B. Johnson School of Public Nuclear activity or technology is Affairs. The project was commissioned by 25.8% more sustainable for the Drafts of the summary report and full-length report can be accessed online at the following website: the City of Austin (on behalf of Austin Natural Gas purpose of electric Energy) and Solar Austin, a Central Texas 27.3%

generation. non-profit renewable energy organization. http://www.utexas.edu/lbj/news/story/732/ Source: Austin Energy

This report seeks to identify feasible and cost-effective investment opportunities for Carbon Austin Energy (AE) that can help contribute AE Direct CO2 Emissions by Source (2007) to the creation of a sustainable electric utility. Neutrality Purchased The report set the target of achieving zero net Power carbon dioxide (CO2) emissions by 2020 as 3% Carbon neutral status is an interim goal towards achieving a achieved by reducing sustainable electric utility. Natural Gas carbon dioxide emissions 26% The power generation mix that AE to the greatest extent implements in the future will represent a Coal 71% possible and then major portion of its cost of service and will balancing the remaining be a significant contributor to either carbon dioxide emissions increasing or reducing AE’s carbon footprint. Source: Austin Energy with measurable and The resources used and technologies reliable carbon dioxide implemented will influence how AE and Austin are perceived as a sustainable utility Austin Energy faces the dilemma of meeting storage methods or by and a sustainable city, respectively. AE’s the energy needs of the public while purchasing offsets. future energy portfolio will affect customer accounting for potential carbon regulation, electricity rates and AE’s capacity to public perception of conventional energy contribute assets to the City of Austin resources, and cost and reliability issues budget. associated with new, clean sources of energy.

Austin Energy Storage “The Holy Grail” Climate Austin Smart Energy

Protection Utility-scale energy storage Clean – Reliable – Efficient technologies may allow

Plan (ACCP) In 2008, Austin Energy released its “Smart electric utilities to store Energy Resource Guide” and launched a public low-cost off-peak 2007 electricity generated from engagement process to gather input from wind to yield electricity Source: Austin Energy citizens and stakeholders on the future during peak usage periods.

Austin Energy investment decisions the city can make. Energy storage may Portfolio Analysis Simulator perform a highly valuable will: AE has proposed adding 1,000 Photo: Dan Herron Source: Austin Energy operation for electric additional MW of power In order to assess power The following power generation The simulator generates the utilities that would increase Austin Energy Proposed Resource Plan generation capacity to its generation options, the project types are potential inputs in the following charts and graphs to  Establish a CO2 current resource mix by 2020. team designed a user-friendly model: demonstrate how the choice of the value of variable cap and reduction Since releasing this plan, AE spreadsheet relying on Microsoft  Pulverized Coal; energy source affects system renewable energy sources plan for utility has made considerable efforts Excel to automate calculations  Coal-fired integrated reliability, carbon emissions, (particularly wind). The to engage its customers in a and displays. This simulator gasification and combined and costs: spreadsheet can calculate public dialogue regarding the emissions. allows a user to compute cycle with carbon capture  Annual generation capacity by benefits of energy storage proposal and the future energy consequences of resource and storage; resource through 2020; by transferring stored options for AE. The following additions and subtractions made  Nuclear;  Annual electricity production  Only make new additions to AE’s resource mix to AE's resource mix between  Natural gas fired by resource through 2020; power generated during off- have been proposed: combustion turbines  Hourly load profile by resource peak periods to peak investments in 2009 through 2020. Inputs for meeting peak demand in and combined cycle; carbon-neutral  200 MW of combined- include potential power 2020; demand periods. cycle natural gas additions  Wind (on-shore and off- generation and associated  Annual carbon emissions power generation. at Sand Hill by 2013; shore); technology investments and the profile through 2020; Demand-Side  100 MW of additional associated availability factors,  Biomass (wood waste);  Potential annual carbon costs or profits;  Reduce peak Note: The 8.7% wind and 50% solar are the amount of capacity that can be biomass by 2016; capacity factors, capital costs,  Coal co-fired with biomass; Management counted on during peak demand hours.  600 MW of net on-shore fuel costs, and levelized cost of  Landfill gas;  Potential costs to offset Source: Austin Energy remaining carbon emissions; (DSM) demand by 700 wind; and electricity associated with these  Concentrated solar;  Annual capital costs; The City of Austin has an  100 MW of solar by 2020.  Solar photovoltaic; and “Nega-Watts” MW by 2020 City Council passed the Austin technologies. A user can  Annual fuel costs; and educated populace and  Geothermal through energy Climate Protection Plan manipulate the investments in  Expected increases in the cost engaged City Council (ACPP) in 2007 to reduce The following seven portfolio different technologies, the of electricity. Conservation, load-shifting, efficiency, concerned with the local and Austin’s contributions to mix scenarios were tested to characteristics of these Energy storage options The graph below demonstrates demonstrate the diversity of peak-smoothing, demand conservation, and global environments. Austin global warming by 2020. The technologies, and cost data to including compressed air energy how costs (green line) can investment opportunities for response, direct load owns its electric utility, Austin primary goal of AE is to align with their assumptions. storage are considered. decrease as carbon emissions demand-side Energy (AE), so its citizens AE and the associated impacts: control and pricing can ensure that its power (blue bars) increase. Average can influence its future  nuclear expansion; Simulator Output: Carbon Dioxide Versus management. generation mix can meet residential cost of electricity is encourage reductions in operations and energy choices. demand reliably at affordable  high renewables; Average Cost of Electricity in 2020 This Month’s Q&A Technology Tips currently about 10 cents/kWh. energy use which can defer Over the past several decades electric rates for customers.  high renewables to replace 2 6 17 the need for capital  Meet 30% of its AE has exhibited leadership in AE is now faced with coal and nuclear; energy needs promoting energy efficiency additional goals set forth by  expected available 5 16 investment in new power and conservation programs and plants or avoid the costs of the ACPP to increase the renewables; 15 from renewable investing in sources of amount of renewable energy  expected available 4 serving load at a demand renewable energy. AE is resources by resources used and reduce the renewables with energy 14 kWh per Cents peak. The scenarios arguably one of the most amount of carbon dioxide storage capacity; 3 2020, including 13 presented here all assume innovative and creative electric (CO2) emitted into the  natural gas expansion; 100 MW from utilities in the United States, atmosphere that can be directly 2 AE will reach its target of  clean coal (integrated 12 solar. with a record of environmental attributed to its resource mix. gasification combined- 700 MW of new demand stewardship and concern for While the benchmarks set by cycle. 1 11 reduction by 2020 through assuring low-cost and reliable CO of tons Metric of Millions the ACPP aim to reduce a variety of existing and The ACCP does not electricity to its customers. dependence on traditional Austin Energy’s proposed resource 0 10 plan appears to be the most reliable, High Nuclear High Cleaner Coal Renewables Natural Gas Expected AE Resource planned programs. Despite previous efforts, AE fossil fuels and limit CO2 least costly, and least risky Renewables Expansion Renewables with Storage Expansion Renewables Plan require Austin has difficult choices to make, emissions, this report seeks to investment plan of the eight However, it is possible that Without as “business as usual” may not take these goals further by scenarios that were evaluated by the Energy to be carbon Nuclear AE could achieve greater be the most sustainable evaluating the impacts of project team. However, it also Chart developed by neutral by 2020. reduces direct CO2 emissions the UT project team energy savings through approach to providing moving toward a sustainable least. Direct Carbon Emissions Expected Residential Electricity Cost increased investment in electricity to customers. AE. DSM.