Navigant: Gas Is a Natural

The report recommends replacing Decker Creek gas plant with a new 500 MW gas plant

Decker Creek gas plant will be retired in 2018 -- replacement is uncertain. (Courtesy of Austin Energy)

In mid-November, Navigant Consulting released its independent study of Austin Energy's 2025 Resource Generation Plan, reviewing various potential energy "portfolios" over the next 20 years and evaluating which is likely to produce the best mix of value and environmental benefits, while mitigating risks of price spikes or power shortages. The study reviews seven possible scenarios, ranging from an "all market" approach to various mixes of natural gas, wind, and solar energy (including the presumption that the coal-fired Fayette Power Plant will be retired from AE's portfolio by 2023). The study was completed before Council's recent authorization of the procurement of an additional 438 MW of solar energy, but the authors report that the study supports that decision.

According to the consultants, four of the seven reviewed portfolios result in similar energy and environmental results, but they recommended a plan which includes replacing the 45-year-old Decker Creek gas plant (to be retired by 2018) with a new 500 MW gas plant, primarily to mitigate the risk of solar and wind sources not being as consistently "dispatchable" as natural gas. They say that relying entirely on renewables could require AE to purchase power intermittently from the state ERCOT grid – meaning both price instability and, paradoxically, reliance on coal-based power from other sources as a backup. The proposed replacement gas plant has been the most disputed aspect of the Generation Plan.

Navigant presented its findings earlier this month to a reportedly skeptical Electric Utility Commission, but hasn't yet reported to City Council (expected next month). Asked about the report and its recommendations, Tom Smith of Public Citizen said the study did acknowledge that the gas plant is "a billion dollar risk" because of the volatility of natural gas prices. He said the consultants didn't sufficiently review alternatives like energy storage, demand-side management, or energy efficiency – all questions that could have given greater weight to renewable sources.

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