Colorado Decarbonization by 2040: Ascend Provides Roadmap for Eliminating Power Plant Emissions

The Colorado Energy Office (CEO), a non-regulatory department within the Governor’s Office, sought assistance to evaluate the potential to reliably accelerate the decarbonization of its electric sector. Following a competitive Request for Proposal (RFP) process, CEO commissioned Ascend Analytics to model different pathways to decarbonization and analyze how those pathways might impact system reliability, costs, and employment. The project culminated in a report to assist the state with policy making to continue decarbonization efforts.

Modeling With a High-Resolution Analytic Lens

In 2019, Colorado set economy-wide goals of reducing greenhouse gas (GHG) emissions 50% by 2030 and 90% by 2050 from a 2005 baseline. In 2021, the state released the GHG Pollution Reduction Roadmap updating the GHG goals to achieve a 75% reduction by 2040 and reaching net zero by 2050. CEO retained Ascend to evaluate how Colorado could achieve zero carbon or near zero emissions in the state’s electric sector by 2040.

In collaboration with CEO, Ascend leveraged its PowerSIMM™ Platform to model six scenarios that showed potential paths towards decarbonizing Colorado's electric sector by 2040. The analysis relied on resource technologies currently available or projected to be market-ready by 2040. PowerSIMM’s capacity expansion module, Automated Resource Selection (ARS), provided the least-cost resource mix for each scenario in replacing fossil fuel resources with clean energy. Ascend’s high-resolution analytical approach included modeling resource dispatch across the state to serve load on an hourly basis, with transmission limits and market interactions. In addition, Ascend’s methodology used renewable generation sources based on historical data rather than average profiles that repeat each year.  

To provide a cost comparison, Ascend calculated net present value of capital costs, fuel costs, and imported energy for each scenario. PowerSIMM provided reliability analysis to ensure all scenarios met the North American Electric Reliability Corporation’s (NERC) standard for meeting load with no less than 1 day of shortfall over ten years. Across all scenarios, Ascend modeled electric load growth based on economic and population growth, as well as by shifts to electric vehicles, building electrification, and electrification of oil and gas end uses.  

An Economics-Based Plan to Achieving a Clean Energy Grid

By integrating physical conditions with financial outcomes, Ascend’s comprehensive, weather-correlated approach to modeling demonstrated Colorado can move to a reliable, affordable, and clean electrical grid by 2040. Ascend modeled the following scenarios:

• Economic Deployment: A technology-neutral, least-cost baseline scenario based on the implementation of existing policies and electric utility resource plans.
• Optimized 100 (OT100): A cost-optimized scenario required to meet zero-carbon emission by 2040 target, that could choose from all resource technology options.
• Hydrogen Limited (H2lim): A sensitivity of the Optimized 100 scenario that limits the model’s use of hydrogen to evaluate which resources could potentially replace hydrogen if it were unavailable at the levels shown in the Optimized 100 scenario.
• Accelerated Geothermal Adoption (Geo): A scenario that uses geothermal in the late 2030s to meet at least a certain percentage of electric capacity.
• Distribution-System Level Focus (DSF): A scenario focused on meeting state electricity needs with customer-sited, distribution level resources.
• Small modular reactors (SMR): A scenario that builds out small modular nuclear reactors in the late 2030s and selects other resources to meet a 2040 zero emissions target on an economic basis.
• Wind, Solar, and Battery (WSB): A scenario that only selected wind, solar, and batteries to meet the zero-carbon emissions requirement.

Ascend analysis showed across all scenarios, carbon dioxide (CO2) emissions drop to near zero in the early 2030s as Colorado retires all coal and the share of gas generation drops to zero or near-zero levels, as shown in Figure 1. The baseline, least-cost, 'Economic Deployment' scenario, which assumes implementation of the state’s existing clean energy planning framework and other existing state and federal energy policies, reduces emissions by 97.7% from in-state generation by 2040 while also achieving near zero emissions in nitrous oxide (NOx) and sulfur oxide (SOx).  

Though all seven scenarios provided pathways to the deep decarbonization of Colorado's electric power sector by 2040, Ascend analysis revealed significant cost differences, shown in Figure 2, driven largely by resource mix. The six scenarios that provided pathways to zero in-state emissions produced costs that ranged from 20-42% more expensive than the Economic Deployment scenario. The results demonstrated the high cost of decarbonizing the last bit of emissions indicating that Colorado may have more cost-effective opportunities for GHG reductions outside the power sector. The Economic Deployment reached a 97.7% reduction in GHG emissions from in-state generation below 2005 levels by 2040 with existing policies.

Comprehensive Analysis to Inform Future Policy

Ascend worked closely with CEO in an iterative process that took into account feedback from key state stakeholders, including large utilities, environmental advocacy groups, municipal utilities, and others. The study will inform and validate subsequent policy discussions and decisions, both within the Governor's Office and the state legislature. 

Interested in Learning More?

The PowerSIMM™ energy analytics platform offers portfolio management, resource planning, and valuation capabilities leveraging Ascend’s high-resolution analytic approach and Market Intelligence. Contact us to learn more.  

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