Fayette coal plant (Photo by Imjeffp / CC BY-SA 4.0)
On Nov. 27, Austin Energy officially released its 2035 Resource and Generation Plan, introducing new fossil fuel generation to a portfolio meant to be carbon-free in 15 years.
AE has proposed the acquisition of new natural gas peaker units – those that operate during times of high stress on the electric grid – as part of its solution for Austin’s growing energy demand, saying only green solutions would be far too expensive and would pass down costs to the customer that would severely impact affordability, one of the tenets of the 2035 plan. Some, including members of the city’s Electric Utility Commission, say including any fossil fuels in the plan is too much of a compromise.
At an Austin Energy Utility Oversight Committee meeting November 19, AE’s Deputy Manager Lisa Martin explained that the 2020 resource plan was adopted in a “very different energy landscape than we have today.” Transmission congestion costs in the ERCOT market and 2021’s Winter Storm Uri have made reliability and independence from ERCOT top of mind – not to mention how demand has increased with Austin’s growing population and electric vehicle usage.
Earlier this year, at Mayor Kirk Watson’s urging that AE needs to exit Fayette Coal Plant no later than January of 2029, the original 2035 plan was scrapped. “There’s been a big shift in the focus of this plan since we began this conversation,” said Council Member Leslie Pool.
In order to fill the gap in power generation, Martin stressed that “you really only have two technologies, and those are utility scale batteries and peaker plants. I think we need both.” In a grid emergency, Martin said peakers can immediately turn on (but that energy would go into the ERCOT market before it could alleviate a local blackout). AE’s plan is to use the two in tandem like a hybrid car, thus minimizing the drawbacks of both (batteries use destructive mineral mining practices and peakers are carbon-emitting).
Since last December, AE has promised that the new gas units would eventually be converted to carbon-free hydrogen generation by 2035, but that is no longer part of the plan. Martin told Watson that using these two tools would put AE in a position to find the technologies that could replace Fayette but did not outline specifically how.
In an article on the Public Citizen website, EUC commissioner Kaiba White says the plan fails to meet many of the goals in the final net-zero by 2040 Climate Equity Plan: “It was assumed that AE’s operations would be carbon-free by 2035 because that’s what the utility committed to in 2020.” White argues that “Even if AE wants to shut these new peakers down in the future, ERCOT can reject that. We see this in San Antonio where that city’s utility wants to shut down its oldest methane gas plants, but ERCOT is forcing at least one to stay open.”
White and Cyrus Reed, another member of the EUC and conservation director of the Sierra Club Lone Star Chapter, listed multiple recommendations draft resolution to avoid yoking Austin to new fossil fuels, like increasing local solar and battery portfolios and energy efficiency and demand response programs, most of which are already in the plan. They wanted AE to conduct a third-party analysis to “assure that the investment cannot be met with demand-side or non-polluting resources, and also assess the economic and environmental impacts of such an investment,” but the resolution did not come up for a vote. The EUC in fact passed the plan at its December 2 meeting 9-1. White and Reed fear the peaker units would be located on the Eastside, the site of Austin’s existing gas-burning plants – an area already more vulnerable to Austin’s worst air quality that is putting us on track for an ozone nonattainment designation from the EPA. The EUC says, “Adding more gas-burning generators that would increase pollution in those communities would be contrary to the commitments of the Austin Climate Equity Plan.”However, Matt Mitchell, AE’s PIO, says nothing is set in stone and “any decisions about any locations for the potential peaker units are very premature.” And, on p.54 of the final draft plan AE promises to “incorporate equity in siting conditions,” and that “site selection will aim to avoid historically impacted communities.” Furthermore, all of these decisions would have to come before Council before being implemented.
Ultimately, Martin said, “When you look at a solution that just has clean technology, the cost ends up being $1.5 billion more – higher than what our studies have shown is the maximum possible.” Peaker units “get us closer and closer to our carbon-free goal, and then either that technology has evolved so we no longer need the peakers in 2035, or we do something like carbon capture.”
The plan will come to Council during a work session with public comment on Dec. 10, and then Council will vote on the plan on Dec. 12. at its last meeting of the year.