At first blush, responses to a utility RFP for new capacity might not be the sort of news that sets the world on fire. But energy wonks are downright ecstatic over the results to Xcel Energy’s recent Colorado solicitation.
Xcel received over 400 bids in response to its all-energy-source RFP, and wind power led the way by a significant margin, clocking the lowest median bid of $18.10/megawatt hour (MWh). Remember—that means half of the bids received were lower than $18.10/ MWh. Nor was this a small sample size. Over 100 wind projects were proposed in response to the RFP, surpassing a combined 4,000 megawatts of wind. That demonstrates that these low bids weren’t one-off outliers, but rather indicative of real industry costs.
Simply put, they offer perhaps the clearest example yet that renewables, and wind in particular, are the cheapest sources of new electric generating capacity in wide swaths of the country, continuing to beat even the most optimistic of projections.That’s possible because American ingenuity and technological advances have driven wind’s costs down by two-thirds since 2009.
Here’s a roundup of responses that showcase just how important these results are:
- The response was amazing. The world is our oyster. It was like walking into a Las Vegas buffet. — Erin Overturf, chief energy counsel for Western Resource Advocates
- As far as we know, these are the lowest renewables plus storage bids in the U.S. to date. — Matt Gray, senior utilities and power analyst, Carbon Tracker
- The prices for bare wind and solar power in the solicitation are so low, they are really impressive… It is a tectonic shift. — James Lazar, senior advisor at the Regulatory Assistance Project
- The prices keep falling, breaking records time and time again. These prices should have every policymaker, utility, and energy investor in the region reconsidering their thinking about how much renewable energy to purchase, and when. The short answer: as much as you can get, and now. – Kevin Steinberger and Noah Long, NRDC
- At a minimum, the Colorado results could provide other markets a futuristic view of what resource planning could look like, by including non-traditional, but cleaner and somewhat dispatchable resources. — Ravi Manghani, director of energy storage at GTM Research
And Vox’s Dave Roberts offer the tour de force reaction:
This particular snapshot reveals that, on the ground, renewable energy costs are falling faster than even the most optimistic analyst had projected.
Let’s face it: In most areas of life, when you look past the hype at the real numbers, it’s depressing. Renewable energy is one area where that typical dynamic is diverted. The closer you look, the better the news gets!
An unprecedented number of developers came forward, eager to build renewable energy and eager to couple it with energy storage, all at unprecedented prices… The Xcel RFP in Colorado is a relatively small signal, but it is one of many sending the same message: renewable energy is not “alternative” any more. Costs are dropping so fast it’s difficult to keep track. It is the cheapest power available in more and more places, and by the time children born today enter college, it is likely to be the cheapest everywhere. That’s a different world.