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Correction: The Omaha Public Power District is expected to file an integrated resource plan with the Western Area Power Administration early next year. An earlier version of this story misidentified the authority that will receive the plan.
The Omaha Public Power District and the Sierra Club, often at odds over energy issues, have found some important common ground: The utility can achieve its goal of net-zero carbon emissions by 2050 at minimal additional cost — or even slightly reduced cost — to customers.
The utility and environmental group both recently made public the results of computer modeling by consultants to determine how the utility could meet its net-zero goal while minimizing impacts on reliability, resiliency, and affordability.
OPPD’s consultant, E3, estimated that by 2050, the cost to customers would increase by less than 1% per year. The Sierra Club’s consultant, Synapse Energy Economics, concluded that minimizing or eliminating coal and natural gas could be achieved at a slight savings compared to the company’s current course.
“Our modeling and theirs show they can do this,” said John Crabtree, who represents the Sierra Club’s Beyond Coal campaign in Nebraska. “It’s feasible. There are things they can do now. The primary obstacle is: Will they have the courage to do this?”
Colton Kennedy, the utility’s manager of corporate planning, concurred that there is “an overwhelming similarity” in the consultants’ assessments of the need and the company’s ability to replace coal-fired plants with more renewables and greater efficiency.
“Investing in significant quantities of wind, solar, and battery storage is a robust and low-risk action for OPPD to achieve net zero targets,” the company’s consultant wrote. More specifically, the authors said OPPD could be confident in developing 1,100 megawatts of solar, 500 MW of wind capacity and 150 MW of battery storage by 2030.
However, the modeling reports parted ways on a couple of issues, most notably timing and the future role of natural gas.
The Omaha Public Power District in the past few years has accelerated its transition to renewable energy. The board of directors has been tilting increasingly toward renewable power as customers — who elect the directors in this public-power state — have chosen directors with clean energy agendas.
In 2019, the board adopted Power With Purpose, a commitment to reduce carbon emissions from the utility’s power generation. It calls for adding between 400 and 600 MW of solar capacity, along with 600 MW of new natural gas capacity. Both are under development.
Crabtree said the main message of Sierra Club’s Synapse study was the imperative to act quickly, even though the utility has given itself nearly 30 years to reach net-zero. A faster transition means a larger total reduction in greenhouse gases entering the atmosphere, Crabtree said.
“We set out to demonstrate to them that there are feasible pathways to retire their coal by 2030 and decarbonize their generation even more by 2035, and Synapse’s modeling makes that case,” he said.
Kennedy said the E3 modeling indicated that earlier implementation probably would be only modestly more costly than later implementation, but that speedy action “may pose implementation and integration challenges.”
As for future use of natural gas to generate electricity, Synapse concluded it’s unnecessary, and that renewables and battery storage in sufficient quantities, along with aggressive reductions in energy use, can meet customer needs at all times.
By contrast, modeling for the utility found a need across all scenarios for some natural gas. E3 models indicated that with the continued growth of wind and solar, the squeeze on the power supply will shift from periods of peak demand to times when the sun and wind aren’t delivering.
To fill in the gaps, E3’s model chose to convert the Nebraska City Station’s 1,345 MW of coal capacity to natural gas for every pathway to net-zero. The timing varies, however. It would convert one unit between 2030 and 2040, and the other unit between 2035 and 2045.
Although the Sierra Club and other clean energy advocates want electricity free of fossil fuels, Crabtree said the gap between their vision and OPPD’s modeling is smaller than it might appear. The E3 modelers conclude that a very modest increase in gas capacity should suffice. Crabtree calls that a “striking similarity” to Sierra Club’s no-gas position.
“Some states have scores of new gas plants, Texas in particular. Their answer to shedding coal is to build new gas. That’s not what OPPD is doing here.”
Moreover, modeling indicates that the refueled units would run only very occasionally, well below a 10% capacity factor. And typically, Crabtree said, plants converted from coal to gas aren’t run for more than a decade or so.
The E3 modelers said emissions could be further reduced by blending natural gas with some hydrogen, which does not emit carbon dioxide.
The authors write, “Study results indicate high potential with this approach, but there is still a lot to be learned as this market develops.”
Each consultant designed a number of scenarios to reflect varying combinations of coal, natural gas, renewables, and storage. E3 focused on various ways to reach net-zero by 2050, OPPD’s desired endpoint. Synapse modeled generation mixes stemming from a half dozen coal and gas scenarios, ranging from business as usual — the greatest proportion of fossil fuels — to scenarios with one or no new gas plants and no coal generation.
Although E3 projected out to 2050, Synapse only modeled through 2035 because, Crabtree said, “We do not believe that going that slow will have the impact we need to address the climate crisis. There are feasible pathways to retire their coal by 2030 and decarbonize their generation even more by 2035.”
Both modeling exercises began by assuming reduced energy consumption due to greater efficiency. The utility’s consultant assumes yearly energy savings of slightly less than 1%, in keeping with the recent results of the company’s efficiency efforts, or a projected reduction of about 22% between 2025 and 2050.
Synapse, by contrast, envisions energy use falling by 1.5% annually by 2025 and by 2.0% yearly by 2030. In 2035, the model forecasts consumption leveling off at about 16,000 GWh rather than 18,000 GWh in the OPPD reference load.
To meet those ambitious targets, OPPD would have to become one of the most efficient utilities in the country, according to the American Council for an Energy-Efficient Economy. Dan York, the council’s senior fellow for utilities and local policy, said only five utilities in the country manage to reduce energy consumption by more than 2% yearly. Annual reductions of 1% are typical, he said.
OPPD plans to incorporate modeling findings into an integrated resource plan that it intends to file with the Western Area Power Administration in February. Then, the utility will conduct feasibility studies of specific supply- and demand-side options identified in the decarbonization study.