Austin Energy Working Group Pushes Carbon Endgame

Our worst polluting plants are shutting down. Decker’s two natural gas steam units, built in the 1970’s, are closing in 2020 and 2021 respectively. Our one third share of the toxic Fayette coal plant will close at the end of 2022.

How and how fast can we eliminate the rest of the carbon from Austin’s power generation? That’s what the Austin Energy Working Group is tackling now.


Nine scenarios were put forward by the Working Group members, asking Austin Energy (AE) to model the costs of various approaches during the December break. In most scenarios, renewables would contribute 77% while the South Texas Nuclear Plant would provide the remaining 23% of Austin’s total power. While modeling the studies, AE also hatched up a plan of their own that – Surprise! – wins in their Stoplight scoring system. More on that later, but first let’s look at the ideas on the table.

Here’s a recap of the scenarios.

  1. CF_2027: Carbon Free by 2027, shutting down the remaining gas generators and replacing them with geographically distributed wind and solar.
  2. CF_2030: Same thing, only three climate-challenging years later.
  3. CF_2035: Same thing – only way too much later!
  4. CF_2030_100% Renewable_STP_2035: Close all the gas plants by 2030 and retire/sell our 16% share of the nuclear plant by 2035. It is currently relicensed till 2048.
  5. Gas Phase Out_2027_CF_2030: Close the Sand Hill combined cycle gas plant by 2027. Keep the gas peakers as back up for high load or renewable shortage days till 2030.
  6. CF_2030_Increased Local Solar: This is a variation of #2, adding 300 Megawatts (MW) more local solar – fosters local power and more local businesses and jobs.
  7. CF_2030_Increased DR/EE: Like #6, this allows us to isolate the cost of increasing our Demand Response and Energy Efficiency goals to 1350 MW from 900 MW. Most of Austin’s important weatherization and home efficiency programs fall under this goal.
  8. Current Goals Economic Retirement: A base line study of keeping our current 65% renewable energy goal and keeping the coal and gas plants going indefinitely. It shows no cost advantage and would be toxic at City Hall.
  9. Net Zero Carbon Offsets: Business as usual + keep gas plants going + Greenwashing.

Here’s how AE scored the results. The pricing in cents/KWH shows the low and high range of customer charges for retail electricity at the end of the study. The expected costs are in the middle of the range – all are close.

01-30-20 WG Scenarios

We will be asking AE to give much better explanation of the Stoplight green/yellow/red colors used to evaluate the scenarios – in particular to explain the Flexibility/Risk Protection column. Some major factors are identified limiting our ability to move immediately to close all the natural gas generators.

  1. Transmission Capacity

Austin’s total peak load is about 2,900 MW. Of that, up to 1,500 MW has been available from the gas plants at Decker and Sand Hill within the AE service territory. AE only has enough incoming transmission capacity to handle about 2,100 MW. This will require an increase in energy import capacity to be built as the remaining gas plants are shut down.

AE is embarking on a 15-month study of their entire transmission system. That study must give clarity to what is needed to both increase the transmission capacity and also increase Austin’s ability to bring in power from all directions, allowing us to better spread out our renewable energy resources for maximum reliability under a wide range of weather conditions.

  1. Emerging storage solutions

Energy storage is the holy grail of our renewable energy future. Battery research at all scales is feverish and prices are coming down. They just aren’t were we need them to be yet. Many of us believe they will be a big part of our system before 2030.

Also there is serious work underway at ERCOT to evaluate where and how utility scale batteries can be deployed in the Texas grid and what the market mechanisms will be. We’ll know a lot more in two years.

  1. ERCOT market risk and reserve capacity

The market demonstrated plenty of risk potential this summer when prices spiked to the maximum of $9,000/MWH for several afternoons. These extreme prices face unlucky wholesale buyers like AE if they don’t have generation, generation contracts or financial options to cover peak load – not a situation we want to be in. This risk can be handled by gas peakers and will likely be replaced by large batteries down the road. The big question is when will the batteries be able to supply 500 MW for Austin? Until then AE is very reluctant to shut down their remaining gas plant and gas peakers.

We’ll find out a lot more about these scenario results before the Working Group makes its recommendations. With new information on the AE transmission system, ERCOT battery usage markets and improving battery pricing, it is imperative that we revisit these scenarios in 2022.

At first review, many of the scenarios look similar in cost. The Stoplight scoring colors need to be much better understood before we can make a plan.

AE’s own #10 REACH plan needs to be explored in greater depth. How could it be implemented and verified? Would it really work? Does it really offer the best option? Can it be reeled in to 2030 when further transmission and battery studies are complete?

Scenarios #0 to #9 involve known generation assets. Turn some on, turn some off at differing times. Add a bit more solar or weatherization. AE’s #10 REACH plan offers something different entirely. It grew from Electric Utility Commissioner Matt Weldon’s proposal for an internal carbon tax to be applied to the Fayette coal plant so it would run less and reduce its toxic emissions before it closes in 2022.

AE took the concept and tweaked it. They calculated how much they believed they could afford to lower Fayette’s emissions while keeping our rates within the affordability metrics. After closing Fayette, they propose to then apply that carbon adder bidding scenario to the remaining gas plants – calculating a differential between each asset and the average carbon load of the ERCOT market. As ERCOT cleans up due to increases in wind and solar coupled with closing coal plants, the bid adder for our dirtiest peaker plants would increase so they would only run in true shortage conditions. In exchange, AE plans for the possibility of keeping them running to 2035 – five to ten years longer that we and our allies are demanding. The trade-off is for lots of Fayette coal emissions taken out earlier in exchange for a longer declining tail of gas. Still it’s a big win for carbon reduction and AE gets credit for thinking outside the box. Here’s a graph of the carbon reductions in green vs. the declining gas emissions in brown.


The grand total remaining AE emissions are improved in the REACH scenario.

Screen Shot 2020-02-04 at 9.47.31 PM

All if this creates a lot of questions in the AE Working Group on how it really works, how it could be verified and reported and how it could be improved. Can we commit to the earliest possible gas plant retirements as a commitment of the new Resource Generation Plan? And as Working Group Member and Resource Management Commissioner Kaiba White of Public Citizen asks, “Can we REACH For More?”

Next meeting of the Working Group is Thursday, February 27th from 4:00 to 6:00 PM at the Austin Energy Headquarters, 721 Barton Springs Road. Bring your voice and views to the Citizens’ Communication at the start of the meeting.

For more information and a pdf of AE’s full presentation check out: