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Nevada Coal Power Costlier Than Renewable: Study

Date: 22-Nov-07
Country: US
Author: Bernie Woodall

ECONorthwest said uncertainty over higher construction costs and the value of what the group says is an inevitable tax on carbon dioxide emissions will cause the cost of coal power to skyrocket as wind, solar, and geothermal power costs decrease.

Currently, renewable power is costlier to generate than coal and unlike the black rock that now provides about 13 percent of Nevada's power is not a "baseload" source -- a large plant that can run around the clock.

Renewable power paired with a more aggressive energy efficiency program will mean "Lower costs and lower risks for ratepayers and probably will produce a higher number of job opportunities for Nevadans," Ernie Niemi, ECONorthwest analyst and primary author of the report, said during a Tuesday telephone press conference.

The report by ECONorthwest of Eugene, Oregon, is titled "Economic Analysis of Nevada's Future Electricity-Generating Alternatives" and can be viewed at www.econw.com.

David Sims, director of project development for Sierra Pacific Resources, which owns both major Nevada utilities, said the report is a "rehash" of old studies given by a collection of environmental groups last year before the Nevada Public Utility Commission, which must approve all power projects.

"The report ignores the fact that we are closing 300 megawatts of coal power in southern Nevada," Sims said.

Sierra Pacific is adding US$2 billion by 2015 in renewable power projects and already has an active energy efficiency program Sims says is undersubscribed by customer option.

While Tom Darin of Western Resource Advocates in Boulder, Colorado, said a combination of solar, wind and geothermal power can support building large transmission lines, Sims said the baseload of coal-fired power is needed before a north-to-south large power transmission line is built.

Sims said Sierra expects the cost of emitting carbon to be between US$4 and US$6 per ton, based on testimony of experts before the Nevada PUC last year, making it less volatile than natural gas power.

John O'Donnell, executive vice president solar thermal developer Ausra Inc. of Palo Alto, California, said some studies show the cost of CO2 emissions will be US$20 per ton.

"In five years, we believe (Ausra) will be directly competitive with coal-fired power plants," said O'Donnell. "Within the next five years, some cost of carbon emissions will come to the US market."

Ausra is competing with several other solar thermal power companies in the US West to build plants of 500 megawatts and bigger, including two Israel-based firms: Solel Solar Systems and BrightSource Energy.

The proposed plants are the 1,600-megawatt White Pine plant by LS Power Group, the 1,500-MW Ely Energy Center by Sierra Pacific Resources , and the 750-MW Toquop Energy Project by Sithe Global Power, which is owned 80 percent by Blackstone Group and 20 percent by Reservoir Capital Group.
(Reporting by Bernie Woodall; Editing by Gary Hill)

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