HomeMy WebLinkAboutMemo - Mail Packet - 10/22/2013 - Memorandum From Steve Catanach, John Phelan, Lucinda Smith Re: Collaborative Report With Rocky Mountain InstituteTechnical Rocky
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Appendix
Institute,
–
Stepping
September
Up:
Benefits
2013.
and
Cost
of
Accelerating
Fort
Collins’
Energy
and
Climate
Goals
1
Stepping
Up:
Benefits
and
Cost
of
Accelerating
Fort
Collins’
Energy
and
Climate
Goals
Technical
Appendix
This technical appendix describes the major pieces of analysis carried out in Stepping Up:
Benefits and Cost of Accelerating Fort Collins’ Energy and Climate Goals. It includes a
summary of Rocky Mountain Institute’s approach in each of the following content areas
(corresponding directly to chapters in the report):
• Efficient Buildings
• Renewable Electricity Supply
• Advanced Transportation
• Implications (jobs, renewable energy credits)
All major data sources are listed at the close of each analytic step description.
For any outstanding questions, please contact:
Coreina Chan, Senior Consultant at Rocky Mountain Institute (RMI), cchan@rmi.org
Efficient
Buildings
Chapter
Analyses
Our approach for estimating the efficiency savings potential from Fort Collins’ building stock
consisted of the following steps:
1. Estimate current building consumption of natural gas and electricity by customer class and
end use for Fort Collins.
2. Project building energy consumption with no efficiency improvements (a frozen efficiency
scenario) out to 2030. This provides a basis against which to determine business-as-usual
and accelerated savings.
3. Gather cost-effective energy savings potentials and costs by end use from national-level
studies.
Technical Rocky
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Appendix
Institute,
–
Stepping
September
Up:
Benefits
2013.
and
Cost
of
Accelerating
Fort
Collins’
Energy
and
Climate
Goals
2
1.
Estimate
current
building
consumption
of
natural
gas
and
electricity
by
customer
class
and
end
use
for
Fort
Collins.
We gathered annual electricity and natural gas consumption data by customer class for the
most recent year for which data was available, (2012 for electricity, 2011 for gas). We collected
electricity consumption data by broad classes (listed in Table 1 below) for the purposes of
estimating savings by end use (which were provided at the broad class level). Natural gas data
were already characterized into these broader classes. Data units were annual kilowatt-hour
(kWh) and deka-therm (Dth) consumption by class for electricity and gas, respectively.
Table
1:
Broad
classes
used
to
characterize
buildings
electricity
use
Residential,
single-‐unit
Residential,
multi-‐unit
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Appendix
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Benefits
2013.
and
Cost
of
Accelerating
Fort
Collins’
Energy
and
Climate
Goals
3
End use 10 Electricity Residential HVAC Auxiliary Platte River 2013 4.1% 24.5%
End use 11 Electricity Residential Incandescent Downlight Platte River 2013 1.8% 52.8%
End use 12 Electricity Residential Laptop PC Platte River 2013 0.1% 42.4%
End use 13 Electricity Residential Lighting Std. Fixt Platte River 2013 12.5% 66.7%
End use 14 Electricity Residential Misc. Residential Platte River 2013 11.3% 48.0%
End use 15 Electricity Residential Plasma TV Platte River 2013 0.4% 25.0%
End use 16 Electricity Residential Pool Pump Platte River 2013 0.6% 47.9%
End use 17 Electricity Residential Refrigerator Platte River 2013 11.4% 43.6%
End use 18 Electricity Residential Set-Top Box Platte River 2013 1.7% 48.9%
End use 19 Electricity Residential Space Heating Platte River 2013 17.0% 10.5%
End use 20 Electricity Residential Water Heating Platte River 2013 2.5% 28.2%
End use 21 Electricity Commercial Cooking Xcel 2010 1.9% 39.3%
End use 22 Electricity Commercial Cooling Xcel 2010 14.1% 49.4%
End use 23 Electricity Commercial Exterior lighting Xcel 2010 6.7% 25.3%
End use 24 Electricity Commercial Heating Xcel 2010 1.7% 47.6%
End use 25 Electricity Commercial Interior lighting Xcel 2010 38.1% 25.3%
End use 26 Electricity Commercial Misc. Xcel 2010 4.5% 13.0%
End use 27 Electricity Commercial Motors Xcel 2010 3.0% 13.0%
End use 28 Electricity Commercial Office equipment Xcel 2010 10.9% 8.9%
End use 29 Electricity Commercial Process Xcel 2010 3.0% 13.0%
End use 30 Electricity Commercial Refrigeration Xcel 2010 6.6% 31.0%
End use 31 Electricity Commercial Ventilation Xcel 2010 7.7% 47.6%
End use 32 Electricity Commercial Water heating Xcel 2010 1.7% 20.0%
End use 33 Gas Residential Clothes drying Xcel 2010 0.3% 1.4%
End use 34 Gas Residential Cooking Xcel 2010 3.0% -0.1%
End use 35 Gas Residential Other Xcel 2010 3.0% 10.0%
End use 36 Gas Residential Furnace Xcel 2010 50.0% 29.2%
End use 37 Gas Residential Boiler Xcel 2010 13.0% 29.2%
End use 38 Gas Residential Room heat Xcel 2010 4.0% 29.2%
End use 39 Gas Residential Water heating Xcel 2010 28.0% 31.7%
End use 40 Gas Commercial Heating Xcel 2010 68.6% 47.6%
End use 41 Gas Commercial
Water Heating - high
standby Xcel 2010 15.1% 10.0%
End use 42 Gas Commercial
Water Heating - low
standby Xcel 2010 8.0% 10.0%
End use 43 Gas Commercial Fryer Xcel 2010 2.5% 25.5%
End use 44 Gas Commercial Steamer Xcel 2010 0.9% 25.5%
Technical Rocky
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Up:
Benefits
2013.
and
Cost
of
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Fort
Collins’
Energy
and
Climate
Goals
4
End use 51 Electricity Industrial Lighting Platte River 2013 7.4% 50.0%
End use 52 Electricity Industrial Process heating Platte River 2013 10.3% 45.0%
End use 53 Electricity Industrial Process cooling Platte River 2013 10.0% 45.0%
End use 54 Electricity Industrial Process EC Platte River 2013 7.6% 13.0%
End use 55 Electricity Industrial Other Platte River 2013 7.1% 13.0%
End use 56 Gas Industrial Boiler MECS 2010 17.3% 29.2%
End use 57 Gas Industrial CHP/Cogeneration MECS 2010 24.8% 0.0%
End use 58 Gas Industrial Process heat MECS 2010 44.7% 45.0%
End use 59 Gas Industrial Other process MECS 2010 5.2% 45.0%
End use 60 Gas Industrial HVAC MECS 2010 5.2% 47.6%
End use 61 Gas Industrial Other MECS 2010 2.8% 10.0%
Multiplying these percentages (% sector consumption in the second column from the right of
Table 1 above) by Fort Collins-specific consumption by class yielded consumption by end use in
kWh or Dth units. Not all electricity consumption characterized as “industrial” in the GHG quality
management plan was actually being used at manufacturing facilities. Rather, “industrial” was a
category defined purely by building size. Based on closer examination of industrial electricity
consumption, we found that roughly half of “industrial” electricity was actually being used in
manufacturing facilities—the rest was being consumed in commercial buildings. We assumed
the same could be true for “industrial” gas, characterizing 50% of Xcel’s reported industrial gas
use as “industrial” (i.e. actual manufacturing processes), and the rest as “commercial” gas
consumed in commercial buildings.
Table
3:
Data
Sources
for
Step
1.
Annual electricity consumption by category Fort Collins Utilities. 2012. Strategic Intelligence
Management System.
Natural gas consumption by category City of Fort Collins. 2012. Community
Greenhouse Gas Emissions Inventory Quality
Management Plan 2005-2011. Original data
provided to Fort Collins by Xcel Energy.
Available at
http://www.fcgov.com/climateprotection/
Electricity consumption by end use Residential, industrial:
Platte River Power Authority (Platte River).
2013. Demand Side Management Potential
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and
Cost
of
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Fort
Collins’
Energy
and
Climate
Goals
5
Market Potential Assessment.
Industrial:
Energy Information Administration. 2010.
Manufacturing Energy Consumption Survey
(MECS).
2.
Project
building
energy
consumption
with
no
efficiency
improvements
(a
frozen
efficiency
scenario)
out
to
2030.
This
provides
a
basis
against
which
to
determine
business-‐as-‐usual
and
accelerated
savings.
We gathered energy consumption growth rates including:
• historical electrical and gas consumption growth rates, starting in 2005,
• projected electricity consumption growth rates, to 2020 from Fort Collins Utilities, and
• projected gas consumption growth rates from the U.S. Energy Information Administration
(EIA), to 2030.
We applied these growth rates to Fort Collins’ current energy consumption to extrapolate
Technical Rocky
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Institute,
–
Stepping
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Up:
Benefits
2013.
and
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of
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Fort
Collins’
Energy
and
Climate
Goals
6
3. Gather cost-effective energy savings potentials and costs by end use from
national-W
e gathered level economic studies. efficiency savings potentials by end use from RMI’s Reinventing Fire
Buildings analysis, which was in turn based on a 2008 report from Lawrence Berkeley National
Laboratory (LBNL) and a 2010 report from the National Academy of Sciences (NAS).These
reports estimated the total economic efficiency potential for all major residential and commercial
end uses. These potentials are listed in the far right column of Table 1.
Certain industrial uses, such as motors and process heat, were not covered in these studies
and were thus treated separately (see Step 7). Data units were percent savings by end use over
the 2030 frozen efficiency baseline. For simplicity, the analysis used savings potentials for
existing buildings. This assumption leads to a conservative estimate of efficiency potential,
because new construction generally has a greater savings potential than retrofitting existing
buildings, and a large portion of Fort Collins’ energy consumption growth will come from new
buildings.
We also gathered the levelized cost of conserved energy for each end use (in dollars per kWh
or per Dth of savings) from Reinventing Fire, which in turn referenced the LBNL and NAS
studies.
Table
5:
Data
Sources
for
Step
3
Savings potential by end use; cost of
efficiency measures
Amory Lovins and Rocky Mountain Institute.
2011. Reinventing Fire: Bold Business
Solutions for the New Energy Era. White
River Junction, Vermont: Chelsea Green.
National Academy of Sciences. 2010. Real
Prospects for Energy Efficiency in the United
States. Washington, D.C.: The National
Academies Press
Lawrence Berkeley National Laboratory.
2008. U.S. Building-Sector Energy Efficiency
Potential. University of California, Berkeley:
Environmental Energy Technologies Division
Retail electricity and gas rates by customer
Technical Rocky
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Appendix
Institute,
–
Stepping
September
Up:
Benefits
2013.
and
Cost
of
Accelerating
Fort
Collins’
Energy
and
Climate
Goals
7
4.
Apply
those
savings
potentials
to
projected
consumption
to
determine
total
cost-‐
effective
efficiency
potential.
To arrive at potential efficiency savings by end use on a kWh or Dth basis, we multiplied future
end-use consumption by end-use savings potentials (far right column of Table 1). We summed
these savings to find total efficiency savings over the frozen efficiency baseline in 2030. We
recognition that Fort Collins has already captured some of this total efficiency potential in the
years 2005-2012, we deducted these savings from the total savings potential for 2013-2030.
Similarly, we recognized that a business-as-usual annual efficiency savings of 0.5% would
capture a piece of the total savings potential for 2013-2030, so we subtracted that quantity from
the total potential for 2013-2030 as well.
We also included behavioral savings in the cost-effective efficiency potential. We gathered the
behavioral and controls savings potentials from a 2010 American Council for an Energy-Efficient
Economy (ACEEE) meta-review of the impacts of behavioral programs, which listed savings
percentages for three separate categories: enhanced billing, real-time feedback and usage
displays, and real-time displays with behavior-savvy programs. We also referenced a National
Academy of Sciences study to corroborate these results. The ACEEE study almost exclusively
explored savings potential for electricity only (rather than natural gas). We assumed that
behavioral savings are also applicable to natural gas, based partially on a presentation given at
the ACEEE 2010 Behavior, Energy and Climate Change Conference. Based on this
presentation, we assume that enhanced billing offers natural gas savings comparable to savings
for electricity. For industrial gas use, we assume enhanced billing is not applicable and that real-
time controls feedback and process monitoring would be applicable instead. We gathered the
levelized cost of conserved energy associated with behavioral savings from the ACEEE study
for electricity, and assumed the same cost for natural gas based on Reinventing Fire Buildings
estimates, converting from $/kWh for electricity to $/MMBTU for gas.
Table
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Appendix
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2013.
and
Cost
of
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Collins’
Energy
and
Climate
Goals
8
5.
Use
levelized
cost
of
conserved
energy
(CCE)
and
estimated
avoided
energy
consumption
to
determine
net
present
value
of
efficiency
from
2013
-‐
2030
and
from
2013
-‐
2050.
After gathering the levelized cost of conserved energy (CCE) for each end use (cost per kWh or
Dth), we calculated a weighted average cost of conserved energy system-wide. The cost was
weighted according to the relative percentage each end use contributed to the overall savings
potential. We then included the cost of behavioral savings in the weighted average CCE (also
weighted according to how much of the total savings potential it contributed). This resulted in
two system-wide CCEs (one for electricity and one for gas). Using the CCEs and assuming a
constant retail electricity cost to calculate yearly efficiency savings, we calculated the net
present value of efficiency measures for both electricity and natural gas to 2030 and to 2050.
We worked in constant 2012 dollars (2012 $).
For the 2050 NPV calculation, we assumed the equivalent annual efficiency savings associated
Technical Rocky
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Appendix
Institute,
–
Stepping
September
Up:
Benefits
2013.
and
Cost
of
Accelerating
Fort
Collins’
Energy
and
Climate
Goals
9
of the full potential integrative design savings would be achievable in Fort Collins by 2030 for
both electricity and natural gas.
Table
7:
Data
sources
for
Step
6
7.
Incorporate
fuel
switching
and
determine
its
cost
We assumed Fort Collins would pursue the most cost effective means of incorporating fuel
switching. Using air source heat pumps to replace natural-gas-based space heating in
commercial and residential buildings is one such cost-effective strategy. Furthermore, as these
heat pumps gain popularity, their up-front cost is likely to decrease. To determine how much
natural gas would have to be replaced with electricity, we first determined Fort Collins’ natural
gas use after all conventional, behavioral, integrative design, and deep engagement savings
were incorporated. We then calculated how much further Fort Collins would have to reduce its
natural gas use to meet a system-wide carbon reduction of 80% by 2030. We also determined
the required customer penetration level of heat pumps based on how much demand remains
within commercial and residential space heating end uses after all other efficiency measures are
incorporated.
We gathered up-front costs, lifetime, and coefficients of performance (COP) for an array of off-
the-shelf models of air source heat pumps and standard natural gas furnaces for both
residential and commercial applications. Based on lifetime, up-front cost, and heating capacity,
we calculated a levelized capital cost (per MMBTU of heating load). We assumed heat pump
adoption would ramp up linearly from 2013-2030 and that heat pumps would be rolled out as
existing heating equipment reaches the end of its life. The heat pump cost calculation assumes
a baseline in which customers would have purchased a highly efficient gas furnace—our cost
calculation therefore reflects the cost premium between standard gas furnaces and heat pumps.
We calculated present-valued fuel cost savings associated with reducing natural gas
consumption based on the current retail rate of natural gas. Additional electricity consumption
associated with serving heat pump demand was added to the electricity system and priced
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2013.
and
Cost
of
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Fort
Collins’
Energy
and
Climate
Goals
10
Renewable
Electricity
Supply
Chapter
Analyses
Our approach for determining costs, sources, implications and feasibility of the business-as-
usual electricity scenario versus the accelerated scenario consisted of the following steps:
1. Establish a business-as-usual capacity and generation scenario by source to 2050.
2. Establish an accelerated capacity and generation scenario by source to 2050.
3. Calculate the present value cost of the two scenarios.
4. Determine feasibility of the accelerated scenario with respect to flexibility.
5. Analyze economics of solar adoption in greater detail.
1.
Establish
a
business-‐as-‐usual
electricity
capacity
and
generation
scenario
by
source
to
2050.
For 2005-2012 electricity consumption and generation, we gathered annual electricity
consumption data starting from 2005 for the most recent year data was available (2012, Fort
Collins Utilities).
Key assumptions and method for extrapolating the business-as-usual scenario to 2050:
• Total demand is calculated based on 0.5% annual efficiency savings (energy growth
persists at 1.4% per year due to annual population growth of 1.9%).
• Distributed solar PV is extrapolated linearly from 2013-2020 to reach the Colorado
Renewable Portfolio Standard of 1% of generation from distributed generation by 2020.
Beyond 2020, distributed solar keeps pace to maintain the RPS standard each year.
• Wind generation is extrapolated linearly to 2020 so that, including generation from solar,
the RPS standard of 10% renewable generation is achieved by 2020. Beyond 2020,
wind keeps pace with demand growth to achieve the RPS standard each year. Wind
adoption also includes a step-change of 60,000 MWh in 2014 due to PRPA's planned
acquisition of 120,000 MWh (~50% of which would be allocated to Fort Collins based on
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and
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of
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Collins’
Energy
and
Climate
Goals
11
• Starting in 2019, a new combined cycle gas turbine (CCGT) comes online that replaces
Fort Collins’ share of Yampa’s coal generation. Fort Collins’ share of Yampa’s coal
generation is assumed to reflect its system-wide allocation (47%).
• From 2019-2023, Yampa’s generation is ramped down, and is supplanted entirely by the
new CCGT by 2023. Starting in 2023, remaining coal generation is held constant and the
CCGT becomes the generation source that supplies remaining demand once all other
sources are accounted for. In 2049, the Rawhide coal plant retires. New CCGT capacity
provides the generation previously provided by Rawhide.
• Gas peaking is assumed to remain constant from its 2012 generation level, but is
eliminated in the model in 2018 after the new CCGT comes online in the model. In reality,
the peakers still represent available capacity after 2018, but they are anticipated to be
used rarely and to such a small percentage that this was not considered in our analysis.
Capacity Factor Summary
Capacity factor of a source of energy is defined as the ratio of actual power output over a year
to its potential output, if the source were operating at its maximum possible capacity during the
entire year. The following capacity factors (in Table 9) were used in the analysis to calculate the
required capacity (kW) for delivering a given amount of energy (kWh). In 2049, a capacity factor
of 80% is used to calculate the additional capacity required above and beyond known CCGT
capacity to replace Rawhide’s generation from coal.
Table
9:
Capacity
factors
used
in
the
electricity
analysis
Coal 88%
Gas - CT 1.1%
Gas - CCGT 80%
Hydro 45%
Wind 40%
Dist PV 17%
Utility PV 17%
Table
10:
Data
sources
Technical Rocky
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Appendix
Institute,
–
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Benefits
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and
Cost
of
Accelerating
Fort
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Energy
and
Climate
Goals
12
Vermont: Chelsea Green. (“Migrate” case)
Generation Load Factors Platte River Power Authority. 2013. 2012
Integrated Resource Plan; Personal
Communication. 2013. Steve Catanach; Amory
Lovins and Rocky Mountain Institute. 2011.
Reinventing Fire: Bold Business Solutions for a
New Energy Era. White River Junction, Vermont:
Chelsea Green.
2.
Establish
an
accelerated
capacity
and
generation
scenario
by
source
to
2050
2005-2012 consumption data was the same as for the business-as-usual scenario (see above).
Key assumptions and method for extrapolating an accelerated, net-zero electricity emissions
scenario to 2050:
• Total demand is calculated based on 2.4% annual efficiency savings (energy demand
shrinks -0.5% per year accounting for annual population growth of 1.9%).
• Distributed solar PV is adopted according to a logistic “S-Curve” whose shape is derived
from three key sources (see below) observing S-Curve adoption dynamics worldwide as
well as two specific examples: Gainesville, FL, and Germany. Saturation, or max
adoption as a percentage of total generation is 30%, based on the “Transform” Case in
Reinventing Fire. In the first three years, adoption in Fort Collins matches the rate of
adoption of Gainesville (including a feed-in tariff introduced there to speed adoption)
while in later years it follows the S-Curve dynamic of Germany.
• Due to the high variability of renewables, a dispatchable source of generation is required
to provide system flexibility. Starting in 2019, a new combined cycle gas turbine (CCGT)
provides this load-following flexibility resource. Based on high-level hourly dispatch
model analysis, a flexibility resource averaging about 17% of total generation from
renewables is required to balance the system. Our model therefore assumes that the
CCGT provides generation equal to 17% of total generation from renewables each year.
On net, despite this overgeneration from a fossil-fuel-based source, the system achieves
Technical Rocky
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Appendix
Institute,
–
Stepping
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Up:
Benefits
2013.
and
Cost
of
Accelerating
Fort
Collins’
Energy
and
Climate
Goals
13
the City of Palo Alto signed a contract for 80 MW of utility-scale solar PV at a levelized
cost of just 6.9 cents/kWh.
• Combined heat and power (CHP) starts at 1,000 MWh in 2013 and grows at a rate of
1.9% per year (consistent with population growth).
• Electric vehicle (EV) demand is based on the level of EV penetration in Fort Collins from
the Advanced Transportation analysis, 2013-2050 (see Transportation appendix).
• Electricity demand from fuel switching is based on serving enough space heating
demand with electrically-powered air source heat pumps (instead of natural gas) to
support a carbon reduction of 80% by 2030 from 2005 levels (see Buildings Chapter
Appendix).
• Wind generation also follows an S-Curve with maximum adoption at 52% of total energy
generation. Once all other renewable sources have been incorporated at their maximum
feasible rate, wind generation offsets remaining coal generation by 2030.
Table
11:
Data
sources
for
Step
2
S-Curve solar and
wind adoption curves
Creti, Anna and Jerome Joaug. 2013. Let the Sun Shine: Photovoltaic
Deployment in Germany. Proceedings of the Economics of Energy Markets
Conference. Toulouse.
Guidolin, Mariangela and Cinzia Mortarino. 2010. The Diffusion of
Photovoltaic energy across countries: Modeling Choices and Forecasts for
National Growth Patterns. Proceedings of the Joint Workshop on Energy
Modeling Tools & Techniques to Address Sustainable Development and
Climate Change. New Delhi; old.sis-
statistica.org/files/pdf/atti/rs08_spontanee_a_6_4.pdf.
Brodsky, Max; Schreiber, Daniel and Luis Tejerina. 2010. Residential Solar
Panel Adoption in Austin. Proceedings of A Symposium on Sustainability on
the UT Campus. University of Texas-Austin.
soa.utexas.edu/csd/symposia/.../17_Brodsky_Schreiber_Tejerina.pdf
Utility PV Adoption
Rate
Amory Lovins and Rocky Mountain Institute. 2011. Reinventing Fire: Bold
Business Solutions for a New Energy Era. White River Junction, Vermont:
Technical Rocky
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Appendix
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Up:
Benefits
2013.
and
Cost
of
Accelerating
Fort
Collins’
Energy
and
Climate
Goals
14
Base fuel prices for natural gas and coal are derived from projections from the US Energy
Information Adminstration’s 2013 Annual Energy Outlook (AEO), Mountain Region, Reference
Case. Beyond 2040, fuel prices are assumed to increase at the same national annual average
rate as projected by the AEO between 2020 and 2040.
General cost assumptions and inputs:
• For business-as-usual, coal plants are replaced with combined cycle gas turbine (CCGT)
plants. Yampa ramps down from 2019-2023; Rawhide is replaced in 2049.
• Wind Investment Tax Credit (ITC) of 10% is active from 2017-2050.
• Wind Production Tax Credit of $0.0196/kWh is active 2013-2015.
• Solar Investment Tax Credit of 56% is active through 2016, decreasing to 36% in 2017,
and discontinued in 2030.
• Discount rate: 3%.
• Referencing the Efficient Buildings chapter analysis, we determined the equivalent
annual efficiency savings that would capture 1) behavioral and controls savings and 2)
deep industry engagement and integrative design
o Business-as-usual annual efficiency savings: 0.5% (given)
o Accelerated annual efficiency savings (with conventional and behavioral
measures only): 1.9% (derived from Efficient Buildings analysis)
o Accelerated annual efficiency savings (with all efficiency measures, including
deep engagement and integrative design): 2.4% (derived from Efficient Buildings
analysis)
• The cost of efficiency was treated as part of the “total resource cost” of the electricity
system. Total resource cost reflects not only the fuel, capital, operations & maintenance,
and distribution costs associated with serving a given load with electricity, but also the
cost of implementing efficiency measures. The cost savings from efficiency measures
are reflected as reduced electricity system costs resulting from serving a reduced load.
• The cost of behavioral and conventional efficiency measures was calculated by applying
a levelized cost of conserved energy (weighted to the share of savings represented by
each end use) to cumulative gross efficiency savings each year (see Efficient Buildings
chapter appendix).
• The cost of integrative design and deep industry engagement was assumed to be NPV-
neutral, a significant conservatism. RMI’s experience has shown that deep industry
efficiency measures and integrative design can be NPV positive, and will continue to be
in the future, if well-designed. To determine the cost of integrative design and industry
deep engagement that would make those measures NPV-neutral, we took “snapshots”
of the system before and after applying the annual efficiency savings of 2.4% to
determine credited system cost savings. We also add this system cost savings
equivalent as a contribution to total resource cost (resulting in net zero NPV).
• “We incorporated “Penny-a-pound” carbon costs (equivalent to $22.04/metric tonne)
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2013.
and
Cost
of
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Fort
Collins’
Energy
and
Climate
Goals
15
Table
12:
Cost
data
and
assumptions
for
renewable
generation.
Includes
capital
costs
for
business-as-usual
and
accelerated
scenarios,
as
well
as
fixed
and
variable
operations
and
maintenance
(O&M)
costs.
capital
costs
($2012/kW)
BAU Accelerated fixed O&M
($/kW-y)
variable
O&M
($/MWh)
onshore
wind
2013 $1,995 $1,995 $14.39 $6.30
Technical Rocky
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Appendix
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–
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Up:
Benefits
2013.
and
Cost
of
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Fort
Collins’
Energy
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Climate
Goals
16
2050 $2,178.75 $2,178.75 $35.28 $1.70 9000
Table
14:
Fuel
price
data
and
assumptions.
2012 $/million
BTU 2013 2020 2030 2040 2050
Natural
Gas
BAU $3.69 $5.55 $6.72 $9.25 $11.39
Accelerated $3.69 $5.55 $6.72 $9.25 $11.39
Coal
BAU $2.06 $2.15 $2.49 $2.82 $3.24
Accelerated $2.06 $2.15 $2.49 $2.82 $3.24
Table
15:
Data
sources
for
Step
4
learning
curves,
fuel
prices,
and
capital
and
O&M
costs
Learning Curve Theory McDonald, A., Schrattenholzer, L., 2001: Learning rates for energy
technologies. Energy Policy 29(4): 255-261.
Fuel Prices
Energy Information Administration. 2010. Annual Energy Outlook.
Capital, Fixed O&M,
Variable O&M Amory Lovins and Rocky Mountain Institute. 2011. Reinventing Fire: Bold
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on_for_ria_2013_update.pdf
4.
Determine
feasibility
of
the
accelerated
scenario
with
respect
to
flexibility.
Dispatch Model Description
The dispatch model used in this analysis was created by RMI and is an hourly, least-cost
dispatch model designed primarily to analyze the feasibility and effects of increasing the
amounts of variable resources onto the electric grid. The model incorporates user-inputted
factors such as generation plant operating costs, CO2 emissions, fuel costs, and forced and
planned outage rates.
The generator mix is fully customizable, allowing resources to be added and electricity demand
to be defined in any existing or hypothetical grid. In general, generators fall into three
categories: variable generators (such as wind or solar PV), dispatchable generators (coal, gas,
etc.), and storage generators (such as pumped hydro or an electric vehicle fleet). For all
resources, the capacity, ramp rate, minimum allowable output, capital cost, variable (fuel, O&M,
and CO2) costs, and rates of forced outages and maintenance are user inputs to the model.
Variable generators, (for example, a windfarm), also require capacity factor data of the resource
in each hour of the year. These data are site- and year-specific, and a different dataset is
required for each variable generator. For simple storage resources, such as thermal energy
storage or pumped hydro, the user also inputs charging and discharging costs and efficiencies,
and maximum allowed level of discharge. For more complicated storage resources, such as
electric vehicles and plug-in hybrid electric vehicles, the drivetrain efficiency and driving and
charging D
ispatch I
n dispatching behavior Analysis generating Steps patterns resources are fully customizable. for each hour, the RMI dispatch model “forecasts” both
demand and variable supply 36 hours ahead and determines the lowest-cost generating mix to
meet demand, following three main steps.
(i) First, any energy efficiency measures are applied to reduce the projected electricity demand.
(ii) After energy efficiency measures are applied, the model dispatches required power supplies
of two types: 1) minimum generation from dispatchable plants, and 2) available power from
variable generators. In the first set, all dispatchable generators have a minimum output in
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calculated for each hour from the gross resource capacities and hourly availabilities, and
along with minimum dispatchable output levels, are applied to meet a portion of the demand.
(iii) In the third step, remaining load (or net load) after energy efficiency measures, variable
generators, and load shifting must be met with dispatchable resources. Depending on the
shape of the post-efficiency demand and the variable generation profiles, the net load may
in fact be negative in some hours of the year.
Taking into account fuel, CO2, and O&M costs, the available dispatchable resources are
sorted by their marginal cost. At this point, some generators are randomly taken offline to
reflect their specified forced outage rates. With these sorted costs and the set of offline
generators defined, the model then dispatches, in order of increasing cost, each generator
up to its maximum allowable output in that hour until the net load is met. Similar to the
minimum allowed output detailed above, each generator has a maximum output level at any
hour that is the minimum of its nameplate capacity and its output in the previous hour plus
its ramp rate. The model records any remaining unmet demand.
5. L
evelized
Analyze cost
economics of residential
of
solar solar
adoption in Fort Collins
in
greater (of $0.
detail 12/kWh) was based on the following
assumptions and inputs:
• 5 kW system
• 0.82 DC to AC derate factor
• 0.5% annual degradation
• $4.07/Wdc (direct current Watt) capital costs (includes sales / use taxes)
• 25 year analysis
• $1.75/Watt rebate up to 3 kW
• Owned systems: Weighted average cost of capital (WACC) 3%, Discount rate 3%
We gathered balance of system (BOS) cost reduction potential from two sources and applied
those applicable to Fort Collins to determine total potential.
Table
17:
Data
resource
for
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A
dvanced
Transportation
Chapter
Analyses
Our analytic approach for determining costs, sources, implications and feasibility of the
business-as-usual transportation scenario versus the accelerated scenario consisted of the
following steps:
1. Gather documented information on Fort Collins’ current transportation fuel consumption
and fuel mix by transportation mode.
2. Project a 2030 frozen efficiency and 2030 business-as-usual scenario for transportation
fuel consumption and fuel mix by transportation mode.
3. Establish a 2030 accelerated scenario for light duty vehicles (cars and light-duty trucks)
reflecting savings in fuel consumption and fuel mix.
4. Determine comparative cost of vehicle ownership between business-as-usual and
accelerated vehicle options.
5. Calculate the net present value (NPV) of the accelerated scenario, first out to 2030 and
K
ey Terms then out to 2050.
Transportation mode = various means or facilities//equipment used for achieving transportation
mobility (e.g., personal car, bike, public bus, etc.)
VMT = vehicle miles traveled
MPG = miles per gallon
Emissions factor = CO2 emissions released from burning a gallon of a given fuel
The first three steps of this analysis describe the method and assumptions for estimating
Fort Collins’ transportation sector fuel consumption, fuel mix, and CO2 emissions in a business-
as-usual scenario, and savings from an accelerated scenario. The energy reduction chart
shown below will be referenced to organize the discussion.
Figure
1
in
Advanced
Transportation
chapter,
on
page
51.
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1.
Gather
documented
information
on
Fort
Collins’
actual
current
transportation
fuel
consumption
and
fuel
mix,
by
transportation
mode.
Fort Collins’ 2012 Community GHG report splits the community’s transportation sector into six
modes: gasoline car, gasoline light truck, and gasoline heavy truck as well as diesel car, diesel
light truck, and diesel heavy truck. The same report provides current transportation energy
consumption, CO2 emissions, and MPG data for each mode, as well as population and VMT
projections for 2013-2020.
For E
quation each
1: mode,
Fuel
Consumptionmode fuel consumption
=
(can Population2012) calculated
x using
(VMT2012/the equation person)
x below.
(%mode
of
total
VMT)/
MPGmode C
O2 E
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T
he 2030 business-as-usual scenario projects savings on top of frozen efficiency that are
expected to result from nation-wide vehicle stock efficiency improvements (reflected in improved
MPG in the calculations), as projected by the US EIA 2013 Annual Energy Outlook (AEO). The
AEO incorporates expected improvements from new Corporate Average Fuel Economy (CAFÉ)
standards, as well as from stock turnover. The AEO includes projections for light duty cars and
trucks, T
able
19: electric
Data
sources vehicle
for
Step adoption,
2 as well as heavy-duty trucks.
Current energy
consumption, MPG data,
CO2 emissions
City of Fort Collins. 2012. Community Greenhouse Gas Emissions
Inventory Quality Management Plan 2005-2011. Available at
http://www.fcgov.com/climateprotection/
Population and VMT
projections
City of Fort Collins. 2012. Community Greenhouse Gas Emissions
Inventory Quality Management Plan 2005-2011. Available at
http://www.fcgov.com/climateprotection/
Fuel prices US Energy Information Administration website. Colorado Natural Gas
Prices. Accessible at
http://www.eia.gov/dnav/ng/ng_pri_sum_dcu_SCO_a.htm.
US Energy Information Administration website. 2013 Annual Energy
Outlook Petroleum Product Prices. Accessible at
http://www.eia.gov/oiaf/aeo/tablebrowser/#release=AEO2013&subject=3-
AEO2013&table=70-AEO2013®ion=1-8&cases=ref2013-d102312a
Expected vehicle stock
efficiency improvements
Energy Information Administration. 2012. Annual Energy Outlook 2013.
3
.
Establish
a
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The accelerated scenario reflects aggressive adoption of strategies to (i) drive less (reflected in
reduced VMT/person) and (ii) replace conventional light duty vehicles with high-efficiency and
electric vehicles (reflected in improved MPG).
(i) Driving Less
We estimated the VMT reduction potential in four opportunity categories shown in the table
below. Using the sources listed in the same table below, we determined a range from low to
high for resulting % VMT reduction from aggressive implementation of each opportunity. We
then determined a “probable FC reduction potential” based on determining factors described in
the T
able sources,
20:
Potential considered
%
Reduction within
in
VMT/Fort person, Collins’
by context.
opportunity
category
Opportunity
Category
Potential
%
reduction
in
VMT/person
Low reduction Probable FC Source
potential
High
Increasing
smart
growth 8 9 10 Reid 2007.
Ewing
“Growing
et
al.
Cooler:
Urban
The
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(ii) Increased adoption of high-efficiency and electric vehicles (EVs)
High efficiency vehicles (that do not cost more than conventional vehicles or that offer a quick
payback) can improve MPG by 70% on average for cars and 30% on average for light trucks (as
described in the following section). It was assumed that the average efficiency of new vehicles
in Fort Collins could be raised by 2030 to the “halfway point”—to at least 35% MPG
improvements for cars and 15% for light trucks. To account for the impact of these new vehicles
as they are adopted into the total vehicle fleet, we created a stock turnover model using US EIA
AEO projections for new vehicle sales and Lawrence Berkeley National Laboratory
Transportation Energy Databook data for % of total miles driven by vehicles as a function of
their age.
Although BEVs were also determined to be cost effective, they have a limited range and cannot
always deliver the same services as gasoline- or diesel-fueled vehicles. To account for these
limitations, our accelerated estimate limits BEV ownership to those commuters whose average
daily driving would fall easily within the range of today’s BEVs. To account for the need to drive
farther than the average on some days (e.g. for intercity, weekend, or vacation trips) BEV
ownership was further limited to households with two or more vehicles.
As discussed in the chapter, PHEVs—which provide nearly the same benefits as BEVs but
without the range limitations—are expected to be cost effective even without incentives by 2020,
and are incorporated into the adoption profile beginning that year. These provide nearly the
same benefits as EVs, but without the range limitations.
Our accelerated scenario models adoption of electric vehicles reaching 50% of total new sales
by 2030. Examples of light truck EVs and PHEVs are extremely limited, so electrification was
only applied to the car fleet. The same stock turnover model was applied here as well to
incorporate T
able
21:
Data electric
Sources
for vehicle
Step
3 adoption along with expected new vehicle sales.
Potential % VMT
reductions, by opportunity
category
Sources listed in Table 20
New vehicle sales
projections
US Energy Information Administration website. 2013 Annual Energy Outlook
Table 39 Light-Duty Vehicle Sales by Technology Type, United States, Reference
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4.
Determine
comparative
cost
of
vehicle
ownership
between
conventional
and
accelerated
vehicle
options.
For Figure 3 in the chapter, the average midsize vehicle price and fuel economy were taken
from the ORNL Transportation energy databook. The purchase price and annual fuel
expenditures for all other vehicles were taken from Fueleconomy.gov. The vehicle labeled in as
“high efficiency” for the midsize class is based on a Nissan Versa.
We also examined the savings potential and purchase price for high efficiency vehicles in
additional vehicle classes as shown at a high level in the table below. Little or no price premium
was observed for all of the best-in-class vehicles when compared to the average vehicle price in
each class. Based on this investigation, high efficiency cars and trucks were assumed to have
70% and Class 30%
Avg. higher
MPG MPG, respectively. Best
in
Class
MPG %
Improvement
Subcompact 24 GM
Spark 35 46%
Compact 27 Prius
C 50 85%
Midsize 25 Prius 50 100%
Large 19 Ford
C-‐max
Hybrid 47 147%
Pickup-‐large 17 GMC
Sierra 21 24%
SUV-‐T
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In this analysis:
• Avoided fuel expenditure for each year was determined by subtracting accelerated
scenario fuel consumption from business-as-usual fuel consumption, and multiplying the
remainder by the projected fuel price for that year. Annual fuel price projections were
sourced from EIA AEO’s 2013 base case. EIA AEO projections end in 2040, so fuel
prices and vehicle BAU efficiency gains were extrapolated linearly out to 2050 for the
NPV calculation.
• High efficiency and electric vehicles were determined to be cost effective and therefore
no price premium for their purchase was included in the NPV calculation.
• For the period 2030–2050, VMT reductions were held constant at 30% below business-
as-usual. Electric vehicles adoption was assumed to continue rising after 2030—at same
rate as from 2013–2030. By 2050, all new cars sales were assumed to be 100% electric
vehicles. As a conservatism, no light trucks were assumed to be electric vehicles (as for
the period from 2013-2030).
• Avoided vehicle costs were estimated to be $0.06 per mile based on American
Automobile Association estimates. These include avoided costs for tires and
maintenance, but not for depreciation or insurance. This rate of savings was applied to
the VMT reductions calculated for each year of the 2013–2030 analysis. As a
conservatism, any savings due to reduced maintenance from EV adoption were not
included in the calculation.
• Additional investment in infrastructure for implementing increased alternative
transportation and other VMT reduction strategies were estimated by scaling national
cost estimates from Reinventing Fire to the amount of miles avoided in the Fort Collins
analysis. Costs were applied each year for the additional miles saved compared to the
previous year.
• Net cashflows were then determined for each year and a 3% discount rate was applied
in order to calculate the accelerated scenario sector NPV.
Table
23:
Sources
for
Step
5
Annual fuel price projections US Energy Information Administration website.
2013 Annual Energy Outlook. Accessible at
http://www.eia.gov/forecasts/aeo/
Avoided vehicle costs (tires and maintenance) American Automobile Association.
http://newsroom.aaa.com/wp-
content/uploads/2013/04/Your-Driving-Costs-
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Implications
Chapter
Analyses
Potential local jobs from the accelerated scenario:
Our estimate for potential local jobs that could be created from the accelerated scenario was
derived as follows:
• Estimate number of jobs from increased adoption of distributed PV
Direct, indirect and induced jobs that could be created from the increased and accelerated
adoption of distributed PV were estimated using the National Renewable Energy
Laboratory’s Jobs and Economic Development Impact (JEDI) model. The JEDI model
produced an estimate of 300 jobs for Fort Collins in this sector category between the years
of 2012 and 2030.
• Estimate number of jobs from increased adoption of building energy efficiency
Direct and indirect jobs that could be created from increased energy efficiency installations
were estimated using a 2010 Lawrence Berkeley National Laboratory study that tracks 38
energy efficiency programs in 11 states. The study estimated that for each $1 million of
efficiency measures installed, 6.3 full time equivalent jobs-years are created.
Using that full time equivalent job multiplier, the $330 million energy efficiency investment
proposed in the accelerated scenario yields 2079 indirect and direct job-years. Over the
seventeen year time horizon to 2030 (2079 job-years/17 years), this is roughly equivalent to
122 jobs.
If we apply the same induced job multiplier for energy efficiency as the JEDI model uses for
induced jobs in the solar PV sector (0.67 induced jobs per direct job created), this brings the
total estimated jobs in energy efficiency to 203 jobs.
• The total local job count is 503 from these two categories of spending.
Note that any potential job creation that could result from local transit-related jobs were not
include in this jobs analysis for the accelerated scenario, which represents a conservatism in
this estimate. There may be a net positive job impact from reduced fuel spending outside
the city, and increased spending on transit jobs in the city, but we have not tried to estimate
this impact.
Note also that the number of jobs at the Fort Collins Utilities could be decreased or
increased as a result of acceleration, since electricity demand and total utility revenues are
lower in the accelerated scenario as compared to business as usual, while local smart grid
investments are greater. Lower electricity sales and revenues largely reflect lower energy
costs, which are pass through costs from Platte River Power Authority; the impact of the
accelerated scenario on the utility's distribution operations is not likely to significantly reduce
employment and is not considered in this analysis. The accelerated scenario could require
increased employment in finance and customer service-related functions.
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Table
24:
Data
sources
for
jobs
analysis
Estimate for direct, indirect and induced jobs in the
distributed PV sector
National Renewable Energy Laboratory’s Jobs and
Economic Development Impact (JEDI) model
Accessible at
http://www.nrel.gov/analysis/jedi/download.html
Multiplier for building energy efficiency direct and
indirect jobs
Goldman, Charles, Merrian C. Fuller, Elizabeth
Stuart, Jane S. Peters, Marjorie McRae, Nathaniel
Albers, Susan Lutzenhiser, and Mersiha Spahic.
2010. Energy Efficiency Services Sector: Workforce
Size and Expectations for Growth. Lawrence
Berkeley National Laboratory. Accessible at
http://eetd.lbl.gov/publications/energy-efficiency-
services-sector-wor
Multiplier for building energy efficiency induced
jobs
Adopted from solar PV JEDI model.
Increased annual investments in local energy assets from the accelerated scenario as
compared to business as usual:
This estimate was derived by extracting the incremental investments that are made in the
accelerated scenario’s electricity system (see Renewable Electricity Supply, step 3, for total
accelerated scenario net present costs) as a proxy for additional local investment. These
investments include:
• Generation capital and operations and maintenance for distributed PV and combined heat
and power (CHP),
• Capital cost for electric efficiency installations, and
• Distribution system investments, including those for smart grid.
This estimate is conservative as it excludes local investments in transit, natural gas building
efficiency installations, and fuel switching. This estimate was then put in present value terms
and annualized over the 37 year period out to 2050 with a discount rate of 3% to generate the
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Next, we estimated the cost of using RECs to achieve a carbon neutral electricity system
tomorrow. To estimate that cost, we calculated how much fossil generation (kWh) would have to
be offset by RECs in the business-as-usual scenario each year. We assumed each kWh of
generation from coal would have to be offset by exactly one kWh of renewable generation. Due
to the lower carbon intensity of natural gas, we assumed every 3 kWh of natural gas generation
would have to be offset by one kWh from renewables. We then calculated the overall present
value cost of REC purchases using an REC price of $0.04/kWh and a 3% discount rate.
Table
25:
Data
sources
for
RECs
NPV
estimation
Price of RECs DOE’s Green Power Markets data on National REC Products. Accessible
at
http://apps3.eere.energy.gov/greenpower/markets/certificates.shtml?page=1
STEPPING UP:
BENEFITS AND COST OF
ACCELERATING FORT COLLINS'
ENERGY AND CLIMATE GOALS
BY ROCKY MOUNTAIN INSTITUTE,
IN PARTNERSHIP WITH FORT COLLINS UTILITIES
1820 FOLSOM STREET | BOULDER, CO 80302 | RMI.ORG
DOWNLOAD AT: WWW.RMI.ORG
COPYRIGHT ROCKY MOUNTAIN INSTITUTE.
PUBLISHED SEPTEMBER, 2013.
3
STEPPING UP: BENEFITS AND COST OF ACCELERATING FORT
COLLINS' ENERGY AND CLIMATE GOALS
TABLE OF CONTENTS
EXECUTIVE SUMMARY...................................................................................................... 5
01: ABOUT THIS REPORT............................................................................................... 11
02: INTRODUCTION: WHY ACCELERATE FORT
COLLINS’ CLIMATE GOALS? .................................................................... 15
03: EFFICIENT BUILDINGS ...................................................................................... 21
04: RENEWABLE ELECTRICITY SUPPLY ........................................... 33
05: ADVANCED TRANSPORTATION ....................................................... 49
06: IMPLICATIONS.................................................................................................................. 61
07: MOVING FORWARD................................................................................................ 67
08: CONCLUSION.................................................................................................................... 71
5
ES
EXECUTIVE
SUMMARY
STEPPING UP: BENEFITS AND COST OF ACCELERATING FORT
COLLINS' ENERGY AND CLIMATE GOALS
This report examines the opportunity for accelerating Fort
Collins’ energy and climate goals to reflect the community’s
values, and capture economic, social, and environmental
benefits. In the five years since Fort Collins initially established
its current greenhouse gas emissions goals, rapid changes in
the cost and availability of clean, energy efficient technologies,
together with the emergence of new business models and
financing methods for implementing these measures, have
dramatically shifted the solutions space for addressing the
community’s energy needs. The cost of solar panels, for example,
has fallen nearly 75% since 2008, with further dramatic declines
yet to come; the retail price for energy-efficient LED lightbulbs
has fallen by 50% in the past year. These and other changes
have opened the door for the City to implement new solutions
to reduce emissions and waste, stimulate local economic
development, improve security, and reduce risk.
ANALYSIS APPROACH
This study provides an independent, forward-looking view of
Fort Collins’ energy options, based on the latest information
about state-of-the-art technologies, policies, and programs. The
approach is built largely on accepted methods and findings from
Rocky Mountain Institute’s (RMI) nation-wide study, Reinventing
Fire: Bold Business Solutions for a New Energy Era, as well as
from other relevant studies and meta-analyses, which have been
adapted to Fort Collins as appropriate and possible. The analysis
also takes into account researched case studies and lessons
learned from RMI’s related energy consulting and advisory work
for cities and states, university campuses, building portfolio
owners, and industrial clients.
To answer questions about how far and how fast Fort Collins
could reduce its CO2 emissions, and at what cost, the report first
assesses the economic potential for efficiency and renewables
in Fort Collins and the opportunities for integrative, cross-sector
solutions:
• How much efficiency is available in Fort Collins’ building
stock?
• By how much could the city reduce fossil fuel consumption
from transportation activities?
• To what extent could the community’s energy needs be met
by both local and centralized renewable energy resources?
Models for each sector have been developed reflecting the City’s
existing and projected building stock, economic and population
growth, transportation assets and requirements, electricity
distribution system, distributed resource potential and other
attributes. To provide a basis for comparing the overall costs,
emissions, and other implications of energy policy choices for the
City, the study compares an accelerated scenario to a business-
as-usual scenario. The business-as-usual scenario analyzes what
might happen absent additional intervention; the accelerated
scenario reflects a combination of policies and strategies
across the sectors aimed at increasing energy efficiency and
reducing emissions. While the accelerated scenario “pushes
the envelope,” the measures considered and the approaches to
implementation are based on rigorous analysis drawing on best
practices, technology trends, and plausibly achievable goals for
customer adoption.
EXECUTIVE SUMMARY
7
The total cost of the two scenarios is evaluated on a present
value cost basis for the periods 2013–2030 and 2013–2050.
Because high initial investments in the accelerated scenario
confer long-term benefits of reduced fuel and operating costs,
the longer time horizon captures the benefit streams more
completely for a fair comparison of the consequences of the
policy choices considered. Today, a growing number of cities and
states are already making energy investment choices based in
part on a carbon price, and the federal government has recently
issued a report that assesses the social cost of carbon starting
today. This analysis uses a conservative figure of a “penny a
pound” ($22 per metric ton in $2012) to value carbon emissions
in both scenarios, with no escalation to 2030.
KEY FINDINGS
This analysis indicates that, in the accelerated scenario, Fort
Collins can achieve an approximate 80% reduction in CO2
emissions by 2030, two decades ahead of its existing 2050
greenhouse gas reduction target. In doing so, the community
could:
• reduce building energy use by 31% through efficiency,
• achieve a carbon neutral electricity system by 2030, and
• reduce transportation energy use by 48%.
In the buildings sector, increased investment in energy efficiency
could reduce energy use in buildings 31% compared to business
as usual by 2030, saving the community $110 million and
reducing the cost of meeting future electricity supply needs from
renewable sources.
• Driven by economic growth and increasing population,
building energy demand under business-as-usual could
increase 19% by 2030 from today’s consumption levels,
increasing CO2 emissions by 24%.
• Through a combination of cost-effective efficiency measures
including conventional energy efficient technologies,
behavior changes and smart controls, and integrative design
approaches, building energy use could be reduced by 31%
from business as usual. This would also reduce building CO2
emissions by 30% from business as usual.
• Fuel switching for building heating would reduce energy
use by an additional 8% from business as usual, and CO2
emissions by another 5% by 2030.
• Achieving these goals would entail achieving an equivalent
of 2.4% electricity efficiency savings improvements annually
between now and 2030. Fort Collins currently targets 1.5%
annual efficiency savings (which it achieved in 2012), already
putting it among the highest tier of efficiency targets in the
nation. By comparison, Efficiency Vermont, one of the best-
in-class electricity efficiency programs in the nation, has
achieved a maximum electricity savings of 3.1% of retail sales
in a single year, and 1.8% of retail sales or greater each year
since 2007.
In the electricity sector, Fort Collins can achieve a carbon neutral
electricity system by 2030 while providing 25% of electricity
supply from local resources.
• Today, Fort Collins Utilities provides its customers with very
low cost power—in 2012, the utility’s residential customers
paid average monthly bills that were lower than 46 of
Colorado’s 53 electric utilities and 40% lower than the
national average.
EXECUTIVE SUMMARY
STEPPING UP: BENEFITS AND COST OF ACCELERATING FORT
COLLINS' ENERGY AND CLIMATE GOALS
• The total present value cost of achieving the accelerated
scenario would be 19% higher than the costs of business as
usual through 2030, taking into consideration the value of
avoided carbon emissions; the equivalent additional cost
per person per year from 2013–2030 would be $67. Over
the period from 2013–2050, however, the total costs of the
accelerated scenario would be lower by 15%. This reflects
a significantly greater up-front investment that is repaid
by dramatically lower fuel costs and reduced exposure to
carbon prices over time.
• Approximately 25% of electricity supply in the accelerated
scenario would be provided by distributed resources, largely
financed by developers or third parties.
• Efficient, scaled deployment of solar PV, together with
simplified permitting, inspection, and interconnection rules,
could result in significant reductions in the “soft costs” of
solar deployment with significant benefit for Fort Collins'
citizens.
• Wind generation would increase by approximately 230
megawatts by 2030, providing 45% of Fort Collins total
electricity supply.
• The accelerated scenario would lower cumulative CO2
emissions from electricity generation by 10 million metric
tons relative to business as usual between now and 2030,
and by 30 million metric tons between now and 2050,
equivalent to removing 600,000 cars from the roads for
ten years.
In the transportation sector, Fort Collins could reduce gasoline
and diesel consumption by 48% from business as usual, saving
$480 million in fuel costs and avoided vehicle maintenance by
2030.
• Fort Collins could reduce vehicle miles traveled by building
on existing smart growth strategies to provide increased
access to pedestrian, bicycle, and public transport options.
Doing so could reduce transportation energy consumption
by 30% from business as usual.
• Less driving means less congestion, and consequently,
improved local air quality, and builds on one of the
community’s greatest strengths—being a bikable,
walkable city.
• Increased adoption of more efficient and electric vehicles
with lower total costs to owners could reduce energy
consumption by an additional 18% from business as usual.
9
EXECUTIVE SUMMARY
RECOMMENDATIONS
Few communities in the nation have the combination of factors
that align to make Fort Collins a community that can lead in
creating forward-looking energy policy for community benefit.
These factors include strong and pragmatic civic leadership,
manageable size, an innovative and well-positioned municipal
utility, workable options for creative transportation policy, and
low cost options for clean and affordable electricity supplies.
Accordingly, it is no surprise that Fort Collins’ innovative energy
programs and policies, notably the FortZED project, have already
attracted national and international attention. By stepping
forward to pioneer new approaches, Fort Collins has galvanized
the support of community leaders and attracted the participation
of leading businesses and other institutions in the area.
Now the City has an opportunity to sustain and advance its
leadership position by taking up new goals that leverage existing
achievements and opportunities. In doing so, Fort Collins could
embark on a transformative path of reinvestment in community-
based energy systems and put itself at the forefront of innovation
nationally—stimulating local economic development, reducing
outflows of money from the community, improving security, and
reducing risk.
IMPLICATIONS
By 2030, combining results across all sectors, the accelerated
scenario results in a net benefit of $165 million for the community
compared to business as usual, and an avoided 15 million metric
tons of CO2. By 2050, the accelerated scenario could result in a
total net benefit of $1.8 billion compared to business as usual.
Moreover, the accelerated scenario represents a fundamentally
different paradigm for investment in energy-related assets
and infrastructure compared with business as usual, providing
greater local job creation, economic development, stimulus
for innovation, and growth for local businesses. Investments in
energy efficiency and distributed energy resources along the
lines of the path already envisioned for FortZED contribute to the
local economy and reduce cash flows out of the community. By
investing now in efficiency and renewables, the City can reduce
outflows of cash for decades to come.
In the accelerated scenario, the amount of money spent on coal
and natural gas to generate electricity supplied to the community
is lower by an average of nearly $15 million per year compared
with business as usual. Investment in efficiency, distributed solar
power, smart grid, and other local energy assets is higher by $30
million per year. This shift in investment—from distant to local
resources—would generate an additional 400–500 jobs within
Fort Collins over the entire period from 2013–2030.
0
01
ABOUT
THIS REPORT
STEPPING UP: BENEFITS AND COST OF ACCELERATING FORT
COLLINS' ENERGY AND CLIMATE GOALS
ABOUT THIS REPORT
In 2008, the City of Fort Collins adopted a climate action
target to reduce greenhouse gas emissions by 80% from
2005 levels by 2050. Five years later, significant opportunities
and motivations to accelerate Fort Collins’ goals have arisen.
Today, Fort Collins could embark on a transformative path of
reinvestment in community-based energy systems and put
itself at the forefront of innovation nationally—stimulating local
economic development, reducing outflows of money from the
community, improving security, and reducing risk.
In November 2012, major energy stakeholders including
representatives from the City of Fort Collins, Fort Collins Utilities,
Colorado Clean Energy Cluster, Fort Collins Energy Board, and
the FortZED Steering Committee came together to explore
the opportunities and challenges in creating a clean energy
future for the community. Participants in that two-day workshop
expressed enthusiasm not only for developing strategies to
achieve Fort Collins’ greenhouse gas emission targets, but also
for accelerating the time frame.¹ They posited that not only is
acceleration feasible, it could drive local economic growth and
system resilience at the same time.
This report answers that call to action by exploring “how far” and
“how fast” Fort Collins can go toward a prosperous, secure, and
clean energy future.
THE PURPOSE OF THIS DOCUMENT IS TO:
• offer a non-partisan framework for thinking about the
community’s full potential for efficiency and renewable
energy supply,
• provide a foundation for the Energy Board and City Council
to move forward with a reassessment of the community’s
climate action goals,
• explore the implications, costs, and benefits of accelerating
the City’s goals,
• recommend new community-wide and sector based climate
action goals, and
• identify the most important target areas and strategies to
address in an accelerated timeframe.
GOAL SETTING APPROACH
This report is based on the premise that there are “right steps
in the right order” to take in energy goal setting and planning.
Before a community decides on an energy target and creates
programs to meet that target, it should first understand what is
technically and economically possible. How much efficiency is
available in Fort Collins’ building stock? By how much could the
city reduce fossil fuel consumption from transportation activities?
To what extent could the community’s energy needs be met by
local renewable energy resources? To answer questions about
how far and how fast Fort Collins can reduce its emissions, this
report seeks first to understand the full potential for efficiency
and renewables available to Fort Collins.
¹ FOR A COMPLETE LIST OF PARTICIPANTS AND FULL SUMMARY OF THE WORKSHOP, VISIT
HTTP://WWW.RMI.ORG/PDF_FORT_ZED_REPORT
13
The analysis presented in this report was conducted by RMI.
An “accelerated scenario” is compared to “business as usual”
that represents what might happen in the community absent
additional intervention. Our approach is built largely on accepted
methods and findings from our nation-wide study, Reinventing
Fire: Bold Business Solutions for a New Energy Era, as well as
from other relevant studies and meta-analyses, which we have
adapted to Fort Collins as appropriate and possible. We also
take into account researched case studies, as well as lessons
learned from our own experiences in a range of related
energy consulting work. We provide a brief description of our
quantification methods, along with major data sources, in the
appendix to this report.
Understanding the community’s full potential, and quantifying
the biggest areas of opportunity, will allow Fort Collins to set an
aggressive goal along with a rationale for where to focus future
program design and set in motion detailed analysis that may
be needed for implementation plan development and funding
commitment.
²FOR A FULL DESCRIPTION, SEE: 2012, “CITY OF FORT COLLINS ENVIRONMENTAL SERVICES,
COMMUNITY GREENHOUSE GAS EMISSIONS INVENTORY QUALITY MANAGEMENT PLAN:
YEARS 2005 THROUGH 2011 AND 2020 FORECAST,” P14.
01: ABOUT THIS REPORT
EMISSIONS SCOPE
Fort Collins’ current climate action goals are based on reductions
in community greenhouse gas emissions—specifically carbon
dioxide (CO2), methane (CH₄), and nitrous oxide (N2O)—from
Scope 1, Scope 2 and Scope 3 emissions sources.² In contrast,
the analysis in this report is limited to the quantification of
CO2 emissions from Scope 1 and Scope 2 emission sources.
Emissions from the embodied energy in materials purchased by
the community, as well as from community airplane travel and
waste, are not included in our analysis.
NEXT STEPS
Fort Collins Utilities plans to submit this report to the Fort
Collins Energy Board for consideration. Should the Energy
Board recommend the City consider new energy policy and
climate action goals, additional analysis may be conducted and
recommended goals presented to the City Council.
STEPPING UP: BENEFITS AND COST OF ACCELERATING FORT
COLLINS' ENERGY AND CLIMATE GOALS
ABOUT ROCKY MOUNTAIN INSTITUTE
Rocky Mountain Institute (RMI) is an entrepreneurial non-profit
with 30 years of research and collaboration experience in the
electricity, building, industry, and transportation energy sectors.
Our mission is to drive a business-led transition from fossil fuels
to efficiency and renewables in the United States in ways that
strengthen and sustain communities. In 2011, we published
Reinventing Fire: Bold Business Solutions for a New Energy Era,
a roadmap for eliminating oil, coal, and nuclear energy in the U.S.
by 2050, while reducing national reliance on natural gas to one-
third of today’s consumption. Realizing this vision would provide
improved energy services, generate opportunities for job and
economic growth, and save $5 trillion in net-present-valued cost
while shrinking fossil carbon emissions 86% from 2000 levels.
At the invitation of Fort Collins Utilities, RMI, as part of on-going
work with electricity leaders through the Electricity Innovation
Lab (e-Lab), convened and facilitated the November 2012
workshop in Fort Collins. 0
15
Image courtasy of Ryan Burke
INTRODUCTION:
WHY ACCELERATE
FORT COLLINS’
CLIMATE GOALS?
02
STEPPING UP: BENEFITS AND COST OF ACCELERATING FORT
COLLINS' ENERGY AND CLIMATE GOALS
INTRODUCTION:
WHY ACCELERATE FORT COLLINS’
CLIMATE GOALS?
It may be surprising to think of Fort Collins as being at an urgent
energy crossroads. Many of us think of decisive moments in the
energy sector as ones defined by crisis, whether by a natural
disaster that disables the grid or the closure of a critical power
plant. We expect brownouts or blackouts that necessitate, very
visibly, a different path forward. Fort Collins, on the other hand,
enjoys lower retail energy costs and service interruptions than
most of the nation. Its municipal utility has one of the highest
annual energy efficiency savings rates. Why is there an urgent
need for Fort Collins to change its course and take on bolder
goals?
As a handful of cities in the United States and around the world
are starting to demonstrate, the real opportunities in energy
don’t precipitate from avoiding disaster. They result from
preemptive decisions to capitalize on being first. Fort Collins
can anticipate the evolving demands and interests of its citizens,
and plan strategically in the face of national and regional energy
trends. In fact, what constitutes leadership today in energy
planning is not sufficient for tomorrow. Next-generation cities
are the ones making the transition to a clean energy future...
and there is no such thing as doing nothing. Today’s energy
system continues to require operations and maintenance, and
also requires major investments and infrastructure upgrades that
commit Fort Collins for decades or longer. Even maintaining the
status quo has consequences.
Five years ago, when Fort Collins committed to climate action
goals to reduce greenhouse gas emissions by 80% (from 2005
levels) by 2050, it began the community’s trajectory towards
reshaping its energy future, and along with it, establishing the
future form and footprint of the city’s energy infrastructure
for decades to come. The community is on track to meet an
interim 20% reduction target by 2020, and is exploring options
for meeting its 2050 target. The coming months present an
opportunity for the City to not only revisit that target, but in doing
so, ask whether it is ambitious enough. As the City reassesses
its emissions targets and energy goals, it could make a bold
choice to accelerate the date by which it can achieve its goal.
Specifically, this report outlines a pathway by which:
FORT COLLINS CAN ACHIEVE AN 80%
REDUCTION IN CO2 EMISSIONS BY 2030, TWO
DECADES AHEAD OF ITS 2050 GHG TARGET,
AND IN THE PROCESS:
• REDUCE BUILDING ENERGY USE BY 31%
THROUGH EFFICIENCY,
• ACHIEVE A CARBON NEUTRAL ELECTRICITY
SYSTEM, AND
• REDUCE TRANSPORTATION ENERGY USE
BY 48%.
17
WHAT WILL BE GAINED BY ACCELERATING?
The path that Fort Collins chooses to take towards a transformed
energy system will impact the long-term benefits that result
for the community. On one hand, it’s possible for a majority
of carbon reductions to be achieved “remotely.” All future
renewable energy could be supplied from centralized resources
much like coal-based electricity is today, sourced from locations
outside of Fort Collins. Or, emission goals could be met largely
through the purchase of renewable energy credits, offsetting
Fort Collins’ energy carbon footprint through investments in
remote renewable projects. But if Fort Collins seeks to advance
its local economic development and system resilience while
simultaneously reducing carbon emissions, it also needs to
consider major investments in community-based solutions.
The target suggested here would support local economic
development, creating greater price certainty into the future,
and sustaining already high reliability in the face of increasing
risks. Initial analysis indicates that this transformation could
be accomplished by 2030 for a net benefit of $165 million as
compared to business as usual on a present value basis, with
much of the investment directed toward local growth. Money,
which today flows to remote infrastructure and energy sources,
would stay within the community to fund local ingenuity and
innovation. Fort Collins’ citizens, largely passive in today’s energy
system, would drive their own energy future as principal change
agents in local building efficiency, distributed power generation,
and cleaner transport—becoming long-term benefactors of
energy cost savings and other benefits, with a strong sense of
ownership in the transformation of their community.
Hitting the audacious targets suggested here would dramatically
reduce Fort Collins’ contribution to climate change and other
environmental degradation. Some climate action plans, such
as Fort Collins's current plan, call for an 80% reduction in CO2
emissions by 2050 in order to limit global warming to 2 degrees
centigrade.3 However, many scientists believe that this goal is
simply not aggressive enough, calling a 2-degree global warming
limit a "prescription for disaster."4 By accelerating its goal twenty
years, Fort Collins would avoid an additional 22 million metric
tons of CO2 emissions by 2050 above and beyond its current
goal. By accelerating its goal and leading a rapid transformation
of the community’s energy system, Fort Collins would draw the
best and brightest energy minds throughout the nation. Through
expanded research, university, and industry partnerships, Fort
Collins would become a hot bed for established companies
and start-up efforts alike, magnetizing funding support and
partners, and seeding the creation and growth of innovative
local businesses. Ancillary businesses would cluster around the
burgeoning economy, attracting residents and investors to what
continues to rank as one of the nation’s “best places to live.”
WHY NOW?
National and local trends make it feasible and attractive for Fort
Collins to depart today from business as usual. Circumstances
surrounding Fort Collins’ incumbent energy sources (coal for
electricity and oil for transportation) create a growing imperative
to find alternatives. The nation is moving decisively away from
coal; the Environmental Protection Agency’s in-progress rules
will effectively prevent new coal plants from being built while
shutting down some of the oldest, dirtiest existing plants,
and utilities and communities around the country are already
STEPPING UP: BENEFITS AND COST OF ACCELERATING FORT
COLLINS' ENERGY AND CLIMATE GOALS
Capital expenditures required to maintain the nation’s aging
electricity infrastructure are translating into higher rates for
customers across the nation, inviting scrutiny into energy supply,
transmission, and distribution options for the coming years.
Fort Collins’ current low energy costs do not make it immune.
Fort Collins has experienced a total rate increase of 41% since
2004, and the community is expecting electric rates to increase
an average of another 2% in 2014.
Meanwhile, exciting alternatives are currently viable from a
functional and economic perspective. Improved technologies
like smart grid, electric vehicles, and thermal storage are no
longer “next generation” capabilities but are being adopted
today. Recent developments in the production of alternative
technologies and leasing business models make cost, once
an excuse to “buy later,” a compelling reason in many cases to
“buy now.” Regional utility-scale wind is already cost-competitive
for Fort Collins. Solar photovoltaics are experiencing steep
and persistent cost declines. More efficient vehicles—and
even electric vehicles—are competitive today against their
conventional counterparts, especially when buyers take into
account near term costs for fuel in addition to sticker price.
A greater array of effective financing mechanisms and models
exists today than ever before to enable community-scale
investment and overcome high up-front costs. Today’s relatively
low cost of capital from public and private sources presents a
compelling, and potentially limited, window to invest.
AUDACIOUS BUT NOT UNPRECEDENTED
The accelerated Fort Collins climate goal is audacious but not unprecedented.
Communities around the country and the world are moving towards drastically
reducing or eliminating carbon emissions over the coming decades. An 80% carbon
reduction goal by 2050 is no longer uncommon in cities and communities ranging
from Madison, Wis., to Burlington, Vt., to Chicago, Ill. Some cities are targeting more
than an 80% reduction by 2050, while the most ambitious are moving ahead to be
completely renewable much sooner.
The specific goals and approaches of leading cities vary significantly, reflecting
differences in priorities and timetables. Greensburg, Kansas, leveled in 2007 by a
tornado, has rebuilt municipal and commercial buildings to LEED platinum standards
and has eliminated electricity-related carbon emissions by investing in a large
wind farm on the edge of town. On a larger scale, San Francisco has achieved
greenhouse gas emission reductions of 7% below 1990 levels, and is aiming to
provide 100% of electricity from renewable sources by 2020. In that effort, San
Francisco has installed 18.5 MW of in-city renewables, including 15 MW of solar PV.
Locally sourced, truly clean electricity is always preferred, however some cities are
using other means to reach clean energy targets.
The City of Palo Alto achieved carbon neutrality this year by relying on renewable
energy credits for a large share of purchases for at least the early transitional years.
Santa Barbara is accelerating its own clean energy plans, embarking on a “Fossil
Free by ‘33” campaign that includes permitting a 100 MW wind farm in the county
and ordinances requiring all new or remodeled buildings to be carbon neutral. On
the other side of the world, Copenhagen is promoting itself as a “living lab” for
clean energy solutions in order to increase energy efficiency and renewable energy
supply to support its target for carbon neutrality by 2025. By 2012, the Danish
capital achieved 25% carbon reductions below 1990 levels, and it has a 50-point
strategy in place to achieve carbon neutrality. Elsewhere, Sydney, Australia released
a master plan in 2013 to achieve 100% renewable energy for electricity, heating,
and cooling by 2030, relying on a diversified energy portfolio and development of
decentralized generation sources.
Fort Collins is thus among the leaders but not at the forefront. At this formative
19
02: WHY ACCELERATE FORT
COLLINS' CLIMATE GOALS?
WHY WILL FORT COLLINS SUCCEED?
The biggest challenges Fort Collins faces to meeting this
accelerated goal are not technical. Success depends largely
on the community’s ability to drive down costs, quickly ramp
up to landmark levels of community adoption of efficiency and
renewables, create and deliver attractive financing mechanisms,
and foster effective collaboration between public and private
stakeholders. The following unique characteristics put Fort
Collins in a position of strength:
• Significant head start from past successes and existing
programs, such as participation in the Global Reporting
Initiative, local business commitment and partnership
through ClimateWise, the recent Renewable and Distributed
System Integration (RDSI) project, Advanced Metering
Infrastructure (AMI) rollout, on-bill financing, and existing
pedestrian- and bicycle-friendly infrastructure.
• Momentum gained from the ongoing FortZED projects,
which aim to transform the downtown area of Fort Collins
and the main campus of Colorado State University into a
net-zero energy district. FortZED will put Fort Collins on a
steep learning curve to coordinate unprecedented levels of
customer engagement in energy issues, allowing Fort Collins
to test and extrapolate programs from this microcosm of
7,200+ stakeholders to the larger community.
• Benefits from being a municipally-owned electric utility
with a collaborative power supply partner, such as greater
control of energy decisions, established partnerships in
the community, and access to low-cost capital and creative
financing.
• A highly engaged community with prominent leaders in
energy research and awareness (Colorado State University,
New Belgium Brewery, Woodward, Spirae and others)
whose reputational standing in the community and focus on
sustainable initiatives make them effective drivers of change.
Colorado State University alone accounts for more than a
fifth of Fort Collins’ population, and represents a valuable
source of cutting edge technical research to help speed
Fort Collins’ energy transformation.
STEPPING UP: BENEFITS AND COST OF ACCELERATING FORT
COLLINS' ENERGY AND CLIMATE GOALS
Figure 1: Fort Collins' 2012 energy profile, in terms of emissions, primary fuels, intermediary fuels, and end uses.
0 5,500,000 11,000,000 16,500,000 22,000,000
2012 Emissions
Primary
Fuels
Intermediary
Fuels
End Uses
Gigajoules
5% COAL 20% NAT GAS 39%
ELECTRICITY 25% NAT GAS 39% GASOLINE & DIESEL 36%
RESIDENTIAL 25% COMMERCIAL 28% 11% TRANSPORTATION 36%
PETROLEUM 36%
RENEWABLES
INDUSTRIAL PROCESSES
BUILDINGS 53%
PETROLEUM
Source: “FC GHG and RE Data 2005-2012.xls”; City of Fort Collins, 2012. "Community Greenhouse Gas Emissions Inventory Quality Management Plan
2005-2011," City of Fort Collins, Environmental Services, October 2012. Available at http://www.fcgov.com/climateprotection/FC GHG Quality Management Plan
2012 FORT COLLINS ENERGY PROFILE
IN THIS REPORT
The way in which energy is used ultimately determines how the
community can reduce its carbon emissions and by how much;
thus the remainder of this document is organized accordingly.
In the buildings chapter, we explore the full potential for energy
efficiency based both on how people use energy within buildings
and on how an integrated, whole system view can expand that
potential. In the electricity chapter, we identify the portfolio of
central and distributed technologies that can replace fossil fuel
electricity supply, and the key strategies needed to enable them.
In the transportation chapter, we assess both the potential to
reduce the need for fossil-fueled transportation and the options
available to replace it with alternative modes and drivetrains.
Finally, in the implications and moving forward chapters, we
highlight the implications of achieving an accelerated climate
goal and suggest key actions the City and community must take
to put itself on a path toward a clean energy future.
WHERE IS FORT COLLINS STARTING?
Ninety-five percent of the energy consumed by Fort Collins’
today is sourced from fossil fuels: coal, oil, and natural gas.
While coal accounts for only 20% of Fort Collins’ energy
consumption, it is responsible for 99.8% of its electricity
CO2 emissions and 53% of its overall CO2 emissions. All of
Fort Collins’ coal consumption and 0.6% of its natural gas
consumption is used to produce electricity; the remaining
natural gas is used for heating, cooking, and industrial
process heat; and virtually all petroleum is used to produce
transportation fuels. As far as end uses, 25% of total energy
fuels Fort Collins’ residences; 28% its commercial buildings,
11% its industrial processes; and 36% its transportation fleet.
0
03
EFFICIENT
BUILDINGS
STEPPING UP: BENEFITS AND COST OF ACCELERATING FORT
COLLINS' ENERGY AND CLIMATE GOALS
EFFICIENT BUILDINGS
BY 2030, ACCELERATION COULD REDUCE
ENERGY USE IN BUILDINGS BY 31% COMPARED
TO BUSINESS-AS-USUAL, SAVING THE
COMMUNITY $110 MILLION.
Fort Collins is home to over 65,000 buildings powered by
electricity and natural gas. Consider all the equipment we use to
light, heat, and cool our homes and workplaces. Add to that the
computers and appliances we plug in to enable our modern lives.
Buildings are responsible for 85% of the community’s electricity
consumption and 80% of its natural gas use, costing about $150
million annually and making them the number one contributor to
Fort Collins’ CO2 emissions.
Not only is building energy demand significant today, it is
expected to increase as Fort Collins grows. The community’s
near term projected population growth is 1.9% per year—almost
three times the national average.⁵ At this rate, business-as-
usual efficiency improvements would not be sufficient to curtail
energy growth. Without additional intervention, building energy
demand could increase as much as 19% by 2030 from today’s
consumption levels, increasing CO2 emissions by 24%.
The good news is that it’s possible for Fort Collins’ buildings
to use much less energy while providing the same or better
functionality. Building occupants aren’t interested in consuming
energy per se; they’re interested in the services provided by
energy, such as lighting, heating, cooling, and entertainment. By
using more efficient technologies and intelligent, whole-system
design, buildings can do more with less, eliminating wasted
energy while bringing occupants greater comfort, productivity,
and health with less expense.
How much better Fort Collins’ buildings perform by 2030
depends on the level and type of intervention carried out by the
City, owners, occupants, and other stakeholders. Our analysis
suggests an estimated 18.6% of Fort Collins’ total building
energy use could be reduced from business as usual through
the widespread adoption of conventional, cost-effective, efficient
technologies. An additional 5.7% (on average, but up to 12% in
some building types) could be achieved through behavioral and
smart control strategies that optimize when and how occupants
use energy. Another 7% savings can be achieved through
integrative designs that coordinate deep energy saving retrofits
with planned renovations or new construction, and through
deep engagement with industrial energy users. This brings total
reductions from efficiency alone to 31% from business as usual.
On top of that, fuel switching for building heating (from natural
gas to electricity) could save an additional 8%, bringing total
potential reductions in buildings by 2030 to 39% from business
as usual.
While Fort Collins’ current retail electricity and natural gas
prices are low compared to national averages, most efficiency
measures are even cheaper. Initial analysis indicates that
reducing total building energy use by 31% through efficiency
could yield the community a net benefit of $110 million in avoided
utility bills between now and 2030.
⁵ “COMMUNITY GREENHOUSE GAS EMISSIONS INVENTORY QUALITY MANAGEMENT PLAN:
YEARS 2005 THROUGH 2011 AND 2020 FORECAST,” CITY OF FORT COLLINS,
ENVIRONMENTAL SERVICES, OCTOBER 2012, P. 38.
23
Dramatic efficiency savings will benefit Fort Collins’ future in
significant ways besides and beyond energy cost savings. First,
efficiency doesn’t just reduce the environmental impact of the
buildings sector, it also speeds the transformation of the entire
electricity supply system. The more Fort Collins can reduce its
energy demand, the smaller the investment required to meet the
community’s changing energy supply needs. Second, efficiency
is by nature local, requiring onsite skills and labor. At scale,
efficiency contributes both directly and indirectly to demand for
local service providers and practitioners. Third, well-designed,
efficient buildings can be healthier and more comfortable than
their conventional counterparts, providing better spaces in which
to live and work.⁶ Finally, efficiency is Fort Collins’ cleanest
resource, since the resource that produces the least emissions
is the energy that isn’t used at all.
⁶ KATS, G. 2010. “GREENING OUR BUILT WORLD: COSTS, BENEFITS, AND STRATEGIES.”
ISLAND PRESS, INC.: WASHINGTON DC.
Part 3
(p.25)
Part 4
(p.26)
Part 5
(p.27)
13
Natural Gas Electricity Remaining Potential Not Included in 2030 Target
Trillion BTUs
2012
Actual
Consumption
2030
Demand
with
Frozen
E ciency
17.2
BAU
E ciency
Savings
1.7
2030
BAU
Demand
15.6
Remaining
Conventional
Technologies
2.9
Controls
& Behavior
0.9
2030
Demand After
Capturing
Conventional
Savings
11.8
Integrative
Design
0.9
STEPPING UP: BENEFITS AND COST OF ACCELERATING FORT
COLLINS' ENERGY AND CLIMATE GOALS
UNDERSTANDING THE FULL POTENTIAL
By adapting national findings around technical and economic
efficiency potentials to Fort Collins’ unique building stock, we can
get a sense of the full potential for efficiency in Fort Collins.
Part 1: An estimated 18.6% of energy could be saved from
business-as-usual by 2030, through the widespread adoption
of conventional efficient technologies.
A significant amount of savings could be achieved simply
through replacing existing equipment in buildings with efficient
technologies that are currently available and already employed
throughout the nation. These technologies—ranging from
efficient lighting to insulation—address all the ways people use
energy in residences and commercial buildings, such as cooling,
heating, lighting, cooking, refrigeration, and plug loads. The
cost of conserved energy (CCE) for the conventional efficiency
technologies analyzed in this study is, on average, 4.9 cents/kWh
cheaper than the price of energy for electricity-saving measures,
and $2.98/MMBtu cheaper for natural gas-saving measures.
Of the 61 end uses we investigated, 60 were cheaper than
respective electricity and natural gas retail rates in Fort Collins.
• Electricity
All conventional electricity efficiency measures are cost-
effective in Fort Collins today. Accessing this full potential
would be equivalent to reducing total building electricity
use in Fort Collins by 18.6% relative to business as usual.
• Natural Gas
All conventional natural gas efficiency measures, with the
exception of some for residential water heating, are cost-
effective today in Fort Collins. If retail gas prices increased
by $2/MMBtu for the residential sector, cumulative
measures for this end use, too, would be cost-effective.
Part 2: Targeting people, not just technology, can capture
another 5.7% savings (on average, but up to 12% in some
building types) in residential and commercial buildings.
After replacing building components with more efficient
technologies, an additional 5.7% reduction in energy demand
can be achieved cost-effectively by using smart controls and
other strategies to encourage changes in how people operate
and interact with buildings. After all, buildings don’t use energy,
people do. Measures in this category borrow from the latest in
behavioral science about why and how people actually make
decisions. Strategies range from providing real-time feedback
on energy use to stirring competition and inciting neighborhood-
scale change by letting people know how much energy they
are using compared to their neighbors. As just one example,
Natural Gas Electricity
10
8
6
4
2
0
2012 $/MMBTU
Residential Commercial Industrial
0.10
0.08
0.06
0.04
25
⁷ "ELECTRICITY IMPACT” CHART, OPOWER WEBSITE, ACCESSED ON 8/19/13. HTTP://OPOWER.
COM/UTILITIES/RESULTS/AV
OPower works with utilities nationally to provide customers with
information about how their energy use compares to others in
their neighborhood, and that information alone has produced a
steady state savings of 1.5–3.5%.⁷ Fort Collins was one of the
first ten utilities served by Opower, and is now in the 4th year
of this program. The first three-year savings for customers was
2.5%.
Tactics like these aren’t geared towards occupant sacrifice in
terms of service, comfort, or convenience. Rather, they seek
to raise awareness of, and curtail, wasteful habits that lead to
unintended energy consumption, such as leaving the heat on
at times when the home is unoccupied. Smart controls can cut
energy use without changing individual occupant behavior, for
example by automatically setting back thermostats or shutting off
equipment during off-hours at work. The Nest smart thermostat
learns and adapts to a homeowner’s behavior, automatically
adjusting the temperature to keep the home comfortable when
occupied, and saving money and energy when not.
In a similar fashion, Fort Collins’ water use dropped 25%
during and immediately after the severe drought in 2002. The
community has adopted more of an ethic of water conservation,
supported by education, metering, and water rates such that
water use has not bounced back to pre-drought levels even
when water is more plentiful.
Part 3: Integrative designs that time deep energy-saving
interventions with planned renovations and new construction
could capture another 5.8% savings relative to business-as-
usual.
Efficiency improvements can have cascading energy benefits
that aren’t typically recognized when measures are considered
incrementally, as they almost always are. For example, a lighting
retrofit from incandescent to compact fluorescent lamps (CFLs)
or halogen reflectors directly reduces lighting loads in a building.
But it also reduces the amount of heat generated by the lighting
system, which in turn reduces demands on the building’s cooling
system.
Grouping individual measures together to capture these
cascading, or “integrative,” benefits can often uncover far greater
energy savings per dollar invested than possible through an
incremental, measure-by-measure approach. Integrative design
can be so effective that, in some cases, buildings can achieve
high enough levels of efficiency to downsize equipment or entire
building systems, resulting in potentially significant reduced or
avoided capital costs.
Fort Collins has existing as well as emerging programs to
encourage and assist in integrative design practices for
commercial new builds and existing buildings; increased
adoption of these will be critical for adopting beyond-
conventional savings. For example, Fort Collins’ forecasted
population growth will lead to construction of new buildings
over the coming decades. Those new buildings present an
important opportunity to “get it right the first time” from an
energy efficiency perspective, and integrative design can be an
03: EFFICIENT BUILDINGS
STEPPING UP: BENEFITS AND COST OF ACCELERATING FORT
COLLINS' ENERGY AND CLIMATE GOALS
important tool. Additionally, the majority of today’s buildings will
still be standing in 2030 and even in 2050. Integrative design
can be employed in these buildings as well, through what is
commonly known as a deep retrofit.
Deep retrofits, which are sometimes thought to be too expensive
by building owners, can become much more cost-effective when
timed to coincide with ongoing capital improvement events in
a building’s lifecycle. For example, high-performance windows
and LED lighting, expensive when planned as isolated efficiency
events, can become cost-effective if together they reduce
cooling loads enough to lessen or avoid the cost of an upcoming
chiller replacement. In Fort Collins, coinciding deep retrofits with
building repositioning (which is becoming increasingly common
throughout local infill developments) could help owners access
greater, cost-effective energy savings.
In early 2013, the New Buildings Institute documented 50 case
studies of retrofit projects across the nation that save an average
of 40% relative to existing energy use or local codes.⁸ For
example, the Johnson Braund design firm purchased a two-story
office building built in Washington in 1984 with heating, cooling,
and ventilating equipment that was nearing the end of its
useful life. Instead of simply completing one-for-one equipment
replacements, the firm implemented multiple efficiency measures
to optimize the building energy performance. The building now
operates in the 6th percentile for its building type and uses 47%
less energy than a comparable building.
Figure 1 includes the full potential for energy reductions from
employing integrative design practices; we estimate that only 30%
of this potential is achieved as part of the accelerated scenario,
resulting in the targeted 5.8% savings through this strategy.
Part 4: Deep engagements with industrial energy users could
capture another 1.2% savings, bringing total potential reduction
from efficiency to 31%.
Potential savings from industrial process loads, while not
strictly addressing building end use, are also included in this
potential since they represent a considerable opportunity and
also frequently occur in or around buildings. Cost-effectively
addressing industrial processes, especially those driven
by natural gas, requires tailored strategies for individual
manufacturers and users, many with unique loads and
equipment. While there are hundreds of industrial energy users
within Fort Collins, only a very small number account for the
majority of industrial energy use. Direct engagements with
these users to target deep savings, including for process loads,
could result in additional savings. Industrial efficiency efforts
have historically suffered from siloed design efforts. Convening
experts from multiple disciplines and industries to tackle related
problems across Fort Collins’ large commercial and industrial
energy users could kick-start an effective solution.
Figure 1 illustrates the full potential for energy reductions from
employing integrative design practices; we estimate that only
30% of this potential is achieved as part of the accelerated goal,
resulting in the targeted 1.2% savings through this strategy.
⁸ A FULL CATALOGUE OF THE STUDIES CAN BE FOUND IN THE RESEARCH LIBRARY AT WWW.
GREENBUILDINGFC.COM
Part 5: Fuel switching for building heating, from natural gas to
electricity, could save another 8%. This brings total potential
savings to 39% from business-as-usual.
For many buildings in Fort Collins, building heating and domestic
hot water is fueled by natural gas. Viable alternatives exist today,
including solar hot water, ground source heat pumps, and air
source heat pumps. In fact, implementing these technologies is a
common practice in new builds and retrofits today. The challenge
for Fort Collins will be to help individual buildings right-time
implementation to make installation more cost-effective, and to
coordinate a high level of adoption at a fast pace.
Fuel switching is a key lever for meeting aggressive climate
target goals, and has been and continues to be incorporated into
strategic long term energy plans for cities and regions around
the world. For example, the European Climate Foundation’s
Roadmap 2050 report, which lays out a pathway to 80% carbon
reductions and provides policy guidance for the next 5 to 10
years to European leaders, addresses fuel switching as a viable
and necessary strategy.9 In this study we consider the potential
of energy and carbon savings from switching from gas-powered
heating to electric heat pumps.
27
9 “ROADMAP 2050: A PRACTICAL GUIDE TO A PROSPEROUS LOW-CARBON EUROPE,” EUROPEAN CLIMATE FOUNDATION, 2010. HTTP://WWW.ROADMAP2050.EU/ATTACHMENTS/FILES/VOLUME1_FULLRE-
PORT_PRESSPACK.PDF
10 "VERMONT TOWN ENERGY USAGE AND SAVINGS" WORKSHEET, EFFICIENCY VERMONT WEBSITE, ACCESSED ON 8/15/13. HTTP://WWW.EFFICIENCYVERMONT.COM/ABOUT_US/ENERGY_
INITIATIVES/VT_TOWN_ENERGY.ASPX
11 “ON A RISING TIDE: THE FUTURE OF U.S. UTILITY CUSTOMER-FUNDED ENERGY EFFICIENCY PROGRAMS.” CHARLES GOLDMAN ET AL., LAWRENCE BERKELEY NATIONAL LABORATORY, 2012, P3.
12 “CALIFORNIA ENERGY DEMAND FORECAST 2010–2020: STAFF DRAFT FORECAST,” CALIFORNIA ENERGY COMMISSION, JUNE 2009. HTTP://WWW.ENERGY.CA.GOV/2009PUBLICATIONS/CEC-
200-2009-012/CEC-200-2009-012-SD.PDF
ACHIEVING AN EQUIVALENT OF 2.4% ANNUAL EFFICIENCY SAVINGS
IN ELECTRICITY
To fully capture the efficiency potential in electricity, the community would need to
achieve an equivalent of 2.4% electricity efficiency savings improvements annually
between now and 2030. Fort Collins currently targets 1.5% (met in 2012) annual
efficiency savings, already putting it among the highest tier of efficiency targets in the
nation.
In comparison, Efficiency Vermont, one of the best-in-class electricity efficiency
programs in the nation, has achieved a maximum electricity savings of 3.1% of retail
sales in a single year, and 1.8% of retail sales or greater each year since 2007.10
Achieving a sustained 2.4% savings per year is unprecedented but achievable. To
date, five states in the U.S. (California, Connecticut, Massachusetts, Rhode Island, and
Washington) require utilities to pursue all cost-effective efficiency measures.11 And it
is important to note that efficiency savings numbers reported by utilities around the
country may be underestimating the full amount of efficiency being achieved, since
they rarely reflect efficiency driven by codes and standards or “naturally occurring”
efficiency that people perform absent a utility incentive or mandate. For example,
California’s Energy Demand Forecast 2010-2020 shows a cumulative 2.8% savings
from utility and public agency programs over the period, a 7.7% savings from codes
and standards, and a 3.7% savings from naturally occurring efficiency in 2008.12
03: EFFICIENT BUILDINGS
STEPPING UP: BENEFITS AND COST OF ACCELERATING FORT
COLLINS' ENERGY AND CLIMATE GOALS
13 2012 ENERGY EFFICIENCY INDICATOR, GLOBAL RESULTS, JUNE 2012, INSTITUTE FOR BUILDING EFFICIENCY, JOHNSON CONTROLS.
14 OVER A DOZEN STUDIES PROVIDE EVIDENCE SUGGESTING A 3 TO 6 % RENT PREMIUM AND 10% OR MORE SALES PRICE PREMIUM (SEE CODES 15.71 AND 15.72 OF GREEN BUILDING FINANCE CONSOR-
TIUM RESEARCH LIBRARY, WWW.GREENBUILDINGFC.COM)
15 NEW BUILDINGS INSTITUTE, 2011. ELEVEN CASE STUDIES FROM: A SEARCH FOR DEEP ENERGY SAVINGS IN EXISTING BUILDINGS. HTTP://NEWBUILDINGS.ORG/PROJECT-PROFILES-SEARCH-DEEP-ENER-
GY-SAVINGS ¹⁵ MILLER, POGUE, GOUGH, & DAVIS, GREEN BUILDINGS AND PRODUCTIVITY, JOURNAL OF SUSTAINABLE REAL ESTATE, NO. 1-2009. ASSUMES AVERAGE OF 250 SQUARE FEET PER WORKER
AND ACTUAL AVERAGE SALARY OF TENANTS OF $106,644.
16 MILLER, POGUE, GOUGH, & DAVIS, GREEN BUILDINGS AND PRODUCTIVITY, JOURNAL OF SUSTAINABLE REAL ESTATE, NO. 1-2009. ASSUMES AVERAGE OF 250 SQUARE FEET PER WORKER AND ACTUAL
AVERAGE SALARY OF TENANTS OF $106,644.
COUNTING BENEFITS BEYOND ENERGY COST SAVINGS
Numerous studies and surveys show that, compared to their average market
counterparts, energy-efficient green buildings boast reduced absenteeism, better
employee health, higher occupancy rates, increased sales prices, increased
productivity, higher property values, and decreased risk. Today, most owners and
investors for existing buildings ignore the full range of potential value, instead
basing their retrofit decisions on energy costs alone, with an average allowable
payback period of only 3.4 years.13 However, because the cost of energy is on
average about one-tenth the cost of rent or mortgage and about one-hundredth
the cost of employee-occupants, energy costs are just a small piece of the affected
value when a building is upgraded.
Leading-edge building owners are beginning to shift how they value energy
performance to align efficiency projects with core priorities for business. Past and
emerging studies are helping to quantify the amount of value beyond energy cost
savings, suggesting rent premiums of 3 to 6%, occupancy premiums up to 10%,
and sales price premiums of 10% or more for investor owned LEED certified or
Energy Star office buildings.14 For example, the investor-owner of the Beardmore
building in Priest River, Idaho not only enjoys the satisfaction of owning a highly
sustainable property but also reaps the bottom-line benefit of increased tenant
attraction, which in combination with the historic qualities of the building enables
him to charge rent 35% above the local average (more than 10 times the value of
the energy cost savings).15
Case studies identified years ago in Natural Capitalism show a 6 to 16% gain in
labor productivity from better thermal comfort, visibility, and quiet. A study based
on a survey of 534 tenants in 154 office buildings in 2009 found that tenants in
LEED or Energy Star buildings reported, on average, 2.88 fewer sick days per year
per person, resulting in average bottom-line cost savings of $1,228 per worker or
$4.91 per square foot.16
MOVING TOWARDS IMPLEMENTATION
Even though the value proposition for increased energy
efficiency in buildings is compelling, there are challenges
to implementation at scale. Only a small portion of the cost-
effective energy efficiency potential in the U.S. has been
captured. So what is slowing adoption?
Fort Collins faces a number of challenges—some common
to other municipalities and utilities and some specific to Fort
Collins—with a few that rise to the top. Though some utilities
have piloted successful programs that address one or more of
these challenges, no community or utility has addressed all these
barriers comprehensively. Fort Collins has the opportunity to
lead by example, in some cases through applying best practices
to date, in other cases developing a best practice required to
achieve such aggressive levels of efficiency savings quickly.
Challenge 1: People have little awareness of energy issues and
have competing priorities.
Beyond cost, financing, and information, efficiency is simply not
a priority, or is too much of a hassle, for many people. Very little
is possible without good data, yet there is a surprising lack of
good information available to service providers and customers
throughout the U.S. electricity sector.
29
Strategy: Implement new approaches to increase
motivation and enthusiasm, and provide relevant, timely,
and compelling information.
A prerequisite for increasing motivation is to provide
education, transparent information, and normative
messaging to build a case for action. A wide range of
useful information can help building owners and occupants
alike, including: knowing exactly how much energy is being
used by what end use at any given time, understanding
how electricity prices change over the course of a day, the
efficiency performance of a home before it is purchased,
information about new technologies that could save more
energy at less cost, and understanding how individual
action contributes to community and societal goals.
In Fort Collins, the utility has begun to build this foundation
by rolling out advanced meters that are needed to gather
and communicate information and by promoting home
energy audits to identify what homeowners can do to
improve efficiency. Examples of additional strategies the
City could take include mandating energy audits at times
of sale, making relevant non-confidential customer data
available to service providers to help target solutions,
leveraging its smart grid investments to provide time-
of-use data and pricing to customers, providing user-
friendly reporting metrics, enabling smartphone real-time
monitoring and feedback, and labeling of building energy
performance.
03: EFFICIENT BUILDINGS
Building on that foundation, one of—if not the—most
significant actions Fort Collins can take is to develop
approaches to support increased adoption of efficiency
by making efficiency and conservation part of the
community’s culture. Examples of potential strategies
include developing a community organizer approach,
direct installations for customers, utilizing innovative
approaches that make efficiency savings fashionable
and a point of pride, increasing codes/standards,
and gamification and neighborhood competition for
energy savings and solar PV penetration. Furthermore,
supporting the development of a residential energy
services company (ESCO) model could help drive
participation by simplifying the time and effort required
by an individual homeowner.
Challenge 2: Fort Collins has a high percentage of histori-
cally hard-to-reach customers, yet a need to scale efficien-
cy quickly.
There is no one-size-fits-all answer for efficiency. While
not unique to Fort Collins, the community has a highly
fragmented building population making a rapid, deep
efficiency roll out difficult. For example, there are a high
percentage of residential rental properties with a high churn
rate, a high percentage of residential customers living in
multi-family buildings, and a diverse small commercial sector.
Achieving the target efficiency improvement means that
the community cannot only target “low hanging fruit,” or the
largest customers, but must instead target greater adoption
of both individual, incremental measures, and deeper,
tailored approaches.
STEPPING UP: BENEFITS AND COST OF ACCELERATING FORT
COLLINS' ENERGY AND CLIMATE GOALS
Strategy: Tailor and phase programs to specific leverage
points in individual market segments.
Fort Collins Utilities has already increased annual efficiency
savings from negligible levels a few years ago to 1.5%
today, in part, by tailoring programs to specific targets.
Recognizing the fragmented nature of the building
population, the City should continue down this path by
segmenting the market, aided by data newly available
from its advanced meter rollout, and identifying the unique
issues and leverage points in each segment. This approach
will allow efficiency programs to most effectively drive scale
in each segment.
While the majority of Fort Collins’ existing efficiency
programs are targeted at individual end-uses or
technologies (for example, rebates for more efficient light
bulbs), the community can achieve greater savings by
understanding the total energy use profiles of specific
customers and pursuing comprehensive energy savings.
Often these “deep” savings can be most cost-effectively
achieved when timed with a planned retrofit or system
replacement. The City should also consider how to phase
efficiency programs to be timed with expected capital
expenditures in individual buildings (e.g. building permits,
change of use, time of sale).
Examples of innovative, tailored approaches already being
piloted by the City include: targeting efficiency programs
for multi-family buildings that impact a large number of
customers through fewer select projects, and developing a
deep retrofit program that rewards whole-system savings.¹⁷
Challenge 3: There are high up-front costs and misaligned
economic incentives.
Efficient technologies, like most renewable technologies, require
an up-front capital expenditure to accrue savings later. That
up-front cost can be a significant hurdle for some people,
especially those with other priorities and limited capital.
Because efficiency requires a capital expenditure but results
in operational cost savings, there is a misaligned incentive
between owner and tenants in both residential rental properties
and leased commercial properties. The owner is responsible
for capital upgrades, but tends to invest in the lowest cost
technology rather than the most efficient, since she doesn’t
pay the utility bills. The tenant bears the burden of high utility
bills each month, but has little incentive to invest capital in a
rental property. And though many efficiency measures are
cost-effective, savings from an individual measure may only
amount to a few dollars per month. The potential aggregate
financial savings from efficiency are significant from a community
perspective; from an individual perspective, they may not be.
¹⁷ FOR EXAMPLE, SEE “GOING DEEPER: A NEW APPROACH FOR ENCOURAGING RETROFITS,”
KELLY SMITH AND MATHIAS BELL, INSTITUTE FOR BUILDING EFFICIENCY (JCI) AND ROCKY
MOUNTAIN INSTITUTE, SEPTEMBER 2011. HTTP://WWW.INSTITUTEBE.COM/INSTITUTEBE/
MEDIA/LIBRARY/RESOURCES/EXISTING%20BUILDING%20RETROFITS/ISSUE_BRIEF_DEEP_
PROGRAMS_FOR_RETROFITS.PDF
31
Strategy: Provide new solutions to economic, financing,
and misalignment issues.
Fort Collins Utilities has already begun to address these
issues by providing efficiency incentives and an on-bill
financing program. There are many other creative strategies
that could be incorporated, including:
• Address the owner-tenant split incentive by driving
increased adoption of programs that provide rebates
directly to the property owner rather than the tenant,
adopting an energy code for rental housing, or by
developing financing options that offer a meter-based
approach.
• Make investment more attractive to investors by
aggregating small projects for scale, and adequately
addressing term, interest rates, and transferability.
• Reassess and make explicit an approach for effectively
setting incentives. Incentives should be optimized within the
boundaries of a portfolio cost of conserved energy (CCE)
approach, rather than a per measure approach.
• Leverage a combination of strategies by introducing new
rate structures or incentive programs that encourage both
efficiency and solar PV while generating the revenues
Fort Collins Utilities needs to maintain financial stability.
Provide access to low-cost financing through interest rate
buy downs or loan loss reserves and incentives, while
testing novel program designs and customer engagement
strategies, some of which are described above.
Challenge 4: Fort Collins is small and not solely responsible for
its energy system.
Fort Collins is small compared to many other cities and to other
utilities that cover whole regions, so it is at a disadvantage in
achieving economies of scale through strategies that work for
larger utilities. This affects purchasing power, outreach and
communications, and program implementation capabilities.
Further, Xcel Energy rather than Fort Collins Utilities supplies
natural gas for heating, cooking, and industrial process, so the
City has less direct control over natural gas efficiency programs.
Finally, the value of efficiency (and other distributed resources)
is rarely accounted for in current practices for building valuation
and appraisals, a constraint that needs to be tackled at the
industry level.
Strategy: Build partnerships and coalitions to drive
economies of scale in cost and in best practices.
Expand cooperative relationships with Platte River and
other member cities to build greater economies of scale.
In doing so, and in conjunction with Xcel Energy, plan for
data sharing and develop complementary program rules.
Build stronger connections with other public utilities and
experts around the country to regularly share efficiency
and industry best practices and to strengthen partnerships
with national retailers. Establish Fort Collins as a test bed
for the best ideas, attracting both leading technologists
and financing.
03: EFFICIENT BUILDINGS
STEPPING UP: BENEFITS AND COST OF ACCELERATING FORT
COLLINS' ENERGY AND CLIMATE GOALS
Challenge 5: There are not enough adequately trained
service providers.
Achieving target levels of efficiency requires not only increased
demand for efficiency, but also adequate reserves of service
providers who can meet that demand. In Fort Collins, contractor
expertise and comfort with efficient technologies and design
approaches remains a key hurdle.
Strategy: Create a highly trained, efficient workforce.
Work with contractors to ensure every renovation, remodel,
and new construction project aligns with community goals
for maximizing efficiency. Fort Collins Utilities already has
a contractor training program for home energy upgrades.
Potential strategies for growth include collaboration at the
local, regional (e.g. Platte River cities), state (e.g. Colorado
Energy Office), and national (e.g. Building Performance
Institute) levels to align work standards, training, and
certification approaches. The City could also consider
partnering with Energy Service Companies (ESCOs) that
can provide trained workers at scale.
SUMMARY
By 2030, Fort Collins could reduce its building energy use by
31% from efficiency, creating a net benefit of $110 million for the
community in saved utility bills, spurring local job growth through
onsite construction and building projects, and transforming Fort
Collins’ buildings into more comfortable and healthier places to
live and work. By fuel switching from natural gas to electricity
for building heating, Fort Collins could save an additional 8% in
energy use.
The barriers to achieving dramatic energy savings are not
technical—all the requisite technologies are already in place,
and increasingly advanced building technologies continue to
come to market. Rather, the challenge for Fort Collins is to drive
landmark community adoption rates of existing and emerging
efficiency programs, and to grow the available contractor and
provider base to meet increased demand. Because buildings
are responsible for 85% of Fort Collins’ current electricity
consumption, the benefits of increased efficiency adoption is
not isolated to the buildings sector. The more Fort Collins can
shrink the demands of its biggest user, the more viable a near-
term future powered almost entirely by renewables. 0
Image courtasy of New Belgium Brewery
04
RENEWABLE
ELECTRICITY
SUPPLY
STEPPING UP: BENEFITS AND COST OF ACCELERATING FORT
COLLINS' ENERGY AND CLIMATE GOALS
RENEWABLE ELECTRICITY SUPPLY
FORT COLLINS CAN ACHIEVE A CARBON NEUTRAL
ELECTRICITY SYSTEM BY 2030.
Energy efficiency can go a long way towards lowering Fort
Collins’ energy costs and carbon emissions—but it is not
sufficient. By integrating local and centralized renewables, the
City can energize local economic development and innovation
and enable the transition to cleaner and more secure energy
options in other sectors of the energy economy, notably
transportation. Today, electricity supply accounts for 54% of
Fort Collins' CO₂ emissions, and from 2013 to 2030 will produce
another 17 million metric tons, even after efficiency measures.
The majority of these carbon emissions originate from just two
coal-fired power plants that together provide 71% of Fort Collins’
electricity.
Fort Collins’ current dependence on coal-fired electricity exposes
the community to rising fuel prices (the Energy Information
Administration projects a 30% or more increase in coal prices
from 2013 to 2030), security and reliability risks, and detrimental
air pollution impacts to human health and the environment.
Quickly incorporating more renewable energy at scale is critical
to Fort Collins’ accelerated clean energy strategy.
0
500
2005 2010 2015 2020 2025 2030
1,000
1,500
2,000
2,500
3,000
Generation - GWh
Business-As-Usual Scenario Accelerated Scenario
0
500
2005 2010 2015 2020 2025 2030
1,000
1,500
2,000
2,500
3,000
Generation - GWh
0
100
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0
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200
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Figure 2: The total present valued costs reflected
here include investment in the electricity system
and also in the building efficiency that influences
total electric load. While the accelerated case has
significantly higher capital costs, those costs are
largely offset by avoided fuel costs over time.
35
The portfolio of resources modeled in this study to drive an
accelerated carbon goal is shown in Figure 1 (p. 31), compared
to business as usual, for both energy generation and capacity.
In fact, Fort Collins is already taking initial steps along this
path. Platte River Power Authority (Platte River), the generation
and transmission utility that provides electricity to Fort Collins
Utilities, is currently considering additional wind generation
that would roughly double the city’s wind supply, along with
strategies it could employ to facilitate integration of variable
renewables (e.g., new gas capacity). Fort Collins Utilities is
rolling out advanced meters throughout the community, has
established an on-bill financing program, and is actively engaged
in designing programs to support rooftop solar financing and
smart grid technology.
Given the abundant renewable resources available in Colorado—
together with rapidly improving technology to access these
resources—Fort Collins electricity supply could be made carbon
neutral by 2030. Achieving this accelerated goal would require:
• meeting the building efficiency savings described in the
previous chapter;
• driving landmark adoption rates of distributed solar and
centralized wind, including enough to offset remaining
natural gas generation; and
• providing sufficient resource diversity and flexibility (e.g.,
flexible natural gas generation, demand response, storage,
etc.) to ensure robust and resilient grid operations.
0 350 700 1,050 1,400 1,750 2,100 2,450 2,800
Business as Usual
Accelerated Scenario
2012 $ Millions
2012 $ Millions
COAL 53%
0 350 700 1,050 1,400 1,750 2,100 2,450 2,800
Business as Usual
Accelerated Scenario
Generation Capital
Distribution
Fuel
Operations & Maintenance
Building E ciency Measures
Building E ciency Measures -
Integrative Design
Carbon Cost
19%
0 350 700 1,050 1,400 -15% 1,750 2,100 2,450 2,800
Business as Usual
Accelerated Scenario
2012 $ Millions
COAL 53%
Business as Usual
Generation Capital
Distribution
Fuel
Figure 3: Historical natural gas
price forecasts compared to actual.
Thin blue lines depict the U.S.
Energy Information Administration's
expectation for future natural gas
prices, as projected in the EIA Annual
Energy Outlook (AEO), 1985-2012
(numbers following each line indicate
the year of publication for each AEO
report). The orange line depicts
the average gas price that actually
resulted in each year. The red line
shows the 2013 AEO Mountain Region
gas forecast, the reference case
assumed for Fort Collins in this report.
STEPPING UP: BENEFITS AND COST OF ACCELERATING FORT
COLLINS' ENERGY AND CLIMATE GOALS
Initial analysis indicates that the total present valued cost of an
accelerated electricity scenario would be 19% higher compared
to business as usual. By 2050, accrued fuel savings, reduced
exposure to carbon costs, and continued efficiency savings
could make the present valued cost of the accelerated electricity
scenario 15% less expensive than business as usual.
A number of key assumptions shape the economics of this
transition. Two of those—natural gas prices and the cost of
carbon—are consistent sources of debate and variability around
the country and therefore sensitivity-tested here. As seen in the
chart below, natural gas price forecasts are constantly changing,
and actual prices often deviate far from forecasted. Both the
business-as-usual and the accelerated scenarios above use the
Energy Information Administration’s mountain region reference
case for natural gas prices. As a sensitivity, we modeled
scenarios in which gas prices are 30% higher or lower than the
reference case in all years. Given that the accelerated case relies
on less natural gas than business as usual, higher gas prices
would reduce the 2013–2030 present value cost premium from
19% to 15%—supporting the case for accelerated renewables
deployment further. Should gas prices be lower than the
EIA PROJECTIONS VS. ACTUAL U.S. AVERAGE WELLHEAD NATURAL GAS PROJECTIONS
85
86 87
89
90
91
92
93
94
95
96
97
98
99
00
01
02
03
04
05
06
07
37
reference case—persisting at or below recent historic lows—the
present value cost of the accelerated case through 2030 would
be 25% higher than business as usual. Either way, the impact
of natural gas prices is limited given the low level of gas in both
scenarios.
Today, leaders like the state of California are already making
energy investment choices based in part on a carbon price,
and the federal government has recently issued a report that
assesses the social cost of carbon starting today. We use a
conservative figure of a “penny a pound” (approximately $22
per metric ton in 2012$) to value carbon emissions in both
scenarios, with no escalation to 2030. As a sensitivity, we tested
a 2013 White House interagency working group forecast that
starts at $35/metric ton (2007$)¹⁸ in 2013. Doing so would reduce
the cost premium associated with the accelerated scenario from
19% to 8%.
Audaciously shifting Fort Collins to a carbon neutral electricity
system would have important and compelling outcomes,
including:
• Lowering cumulative CO₂ electricity emissions by 30 million
metric tons between now and 2050 compared to business
as usual, the equivalent of removing 600,000 cars from the
roads for ten years.
• Supporting local economic development by (i) creating a
long-term market for rooftop solar PV (and energy efficiency)
requiring local skilled labor, and (ii) solidifying Fort Collins’
reputation as an innovation and sustainability hub, attracting
businesses and high-quality jobs.
• Building off of Fort Collins’ already notable electric reliability
to create a truly resilient electric system that will sustain the
community into the future.
DESIGNING THE ELECTRICITY PORTFOLIO OF TOMORROW
Creating a Diverse Portfolio of Central and
Distributed Resources
Achieving carbon neutrality in Fort Collins’ electricity system
is not just a matter of driving investments into expanded
renewable supply from Platte River. It is critical for centrally
sourced renewables, notably wind, to be scaled quickly. But
local distributed resources like commercial and residential
rooftop PV, community PV, and even local energy storage and
electric vehicles are key enablers of a more vibrant and thriving
energy future for the community. Because of rapidly falling
costs of distributed renewable technologies, increased personal
awareness and demand, and innovative financing and business
models, it’s feasible today for distributed PV and other sources
to provide a large share of the renewable resources required
to achieve carbon neutrality. Creating a diverse portfolio that
includes both central and distributed resources will diversify Fort
Collins’ supply, ensuring the community’s electricity system will
be not only cleaner but more secure and resilient than it is today.
Fort Collins has a variety of renewable supply options, each
with its own attributes and implications. Creating an optimized
portfolio requires an understanding of what each supply option
offers in terms of affordability, technical feasibility, reliability,
environmental performance, and public acceptability. The
following table provides a high-level qualitative comparison of
various renewable options including distributed and utility-scale
¹⁸ "TECHNICAL SUPPORT DOCUMENT: TECHNICAL UPDATE OF THE SOCIAL COST OF CAR-
BON FOR REGULATORY IMPACT ANALYSIS - UNDER EXECUTIVE ORDER 12866," INTERAGEN-
STEPPING UP: BENEFITS AND COST OF ACCELERATING FORT
COLLINS' ENERGY AND CLIMATE GOALS
Figure 3: Identifying the right mix of energy generation options requires weighing a variety of factors. In this qualitative comparison between different options, a completely black
circle signifies “high”
and a completely white circle signifies “low” qualitative ability to meet certain criteria.
IMPORTANT CRITERIA TO CONSIDER FOR DIFFERENT ENERGY
GENERATION OPTIONS
DISTRIBUTED
PV
Commercial &
residential rooftops,
community solar
UTILITY PV
Large-scale,
ground mount
solar arrays
WIND
Large-scale
windfarms
BIOMASS
I.e. Wood,
pulp,
agricultural
residue for
cogeneration
CHP/CCHP
Combined heat
and power or
combined cooling
heat and power
Operations (Variable Output)
Power from renewable resources can fluctuate with the weather, adding variability, and requires smart
integration to best shape output system needs.
Y Y Y N N
Siting (Distributed or Centralized)
Smaller, more modular energy resources can be installed by disparate actors outside of the purview of centrally
coordinated resource planning.
D C C C/D D
Potential to Provide Value Beyond Energy Generation
Value beyond energy generation can include benefits to grid operations and total system efficiency. For
example, distributed resources can reduce line losses, defer capacity investments, and minimize land impacts.
Renewable resources can act as a hedge against volatile natural gas prices. Combined heat and power
increases efficiency by utilizing waste heat.
Potential for Cost Reduction
Different technologies are expected to see on-going cost reductions to a greater or lesser extent. For example,
scale and technology development continues to drive rapid solar cost reductions, whereas wind is a more
mature technology and costs are expected to decline less rapidly.
Potential to Support Local Economic Development
Different forms of energy generation can bring local jobs, attract outside investment, and further the city’s standing
as a beacon of innovation. For example, local resources like distributed PV may foster a local base of knowledge
and jobs associated with installation, operations, maintenance, and management, whereas centralized resources
may not to the same extent.
Potential for Improved Environmental Performance, Beyond CO2 Emissions
Environmental impacts of energy generation can extend beyond emissions to health impacts, degradation in
land use, erosion, soil, water, and wildlife.
solar photovoltaics (PV), wind, and biomass. Combined heat and
power (CHP), although generally natural-gas fueled, is included
as well because of its high efficiency and potential to be fueled
by renewable sources such as biomass.
39
AFFORDABILITY
Fort Collins Utilities provides its customers with very low cost
power—in 2012, the utility’s residential customers paid average
monthly bills that were lower than 46 of Colorado’s 53 electric
utilities and 40% lower than the national average. That sets a
high bar for renewables to compete on cost. The good news is
that renewables’ fuel is free, their energy price is locked in for
decades, and their capital costs are either already low or falling
quickly. The following chart shows a levelized cost comparison
between utility-scale resources, reflecting both current and
forecasted costs.
In 2011, Rocky Mountain Institute forecasted that the levelized
costs of utility-scale solar PV would decline 13% to 19 cents/
kWh by 2015, yet actual installed projects in 2013 have already
achieved and surpassed that forecast. In June, 2013, the City of
Palo Alto signed a contract for 80 MW of utility-scale solar PV
at a levelized cost of just 6.9 cents/kWh (including the Federal
Investment Tax Credit).19 Recent wind projects in the Mountain
West report prices below 4.0 cents/kWh.20
Distributed solar PV has a similar story, with reported installed
prices having fallen 6%–7% per year from 1998 to 2011.21 Along
with the advent of solar financing models that, for example,
allow customers to put solar on their roof for zero dollars down,
this has resulted in a rapidly accelerating distributed solar
market. In Fort Collins, residential rooftop solar PV now costs
approximately 12 cents/kWh for a homeowner-owned system,
0.20
0.15
0.10
0.5
0
2010 2020 2030 2040 2050
2013 $/kWh
Source: Q1 2013 LCOE Ranges, Bloomberg New Energy Finance, 2013; Annual Energy Outlook 2011, Energy
Information Administration, 2011; "Reinventing Fire: BOLD BUSINESS SOLUTIONS FOR THE NEW ENERGY
ERA," Amory Lovins and Rocky Mountain Institute, White River Junction, Vermont: Chelsea Green, 2011.
Year of Installation
Biomass Incineration Wind
Utility PV
New Coal Hydropower
Combined Cycle Natural Gas
19 WESOFF, ERIC. "PALO ALTO GOES SOLAR, 80 MEGAWATTS AT 6.9 CENTS PER KILOWATT-HOUR". GREENTECHMEDIA. HTTP://WWW.GREENTECHMEDIA.COM/ARTICLES/READ/PALO-ALTO-CA-
GOES-SOLAR-CHEAPLY-80-MEGAWATTS-AT-6.9-CENTS-PER-KILOWATT-HO
20 LBNL. 2012 WIND TECHNOLOGIES MARKET REPORT. AUGUST 2013. HTTP://NEWSCENTER.LBL.GOV/NEWS-RELEASES/2013/08/06/NEW-STUDY-FINDS-THAT-THE-PRICE-OF-WIND-ENERGY-IN-THE-
UNITED-STATES-IS-NEAR-AN-ALL-TIME-LOW/
21 WISER ET AL. TRACKING THE SUN VI. LBNL. JULY 2013.
Figure 4: Levelized Cost of Electricity (LCOE): The renewable costs shown exclude tax credits and
similar subsidies. Centralized sources of renewable electricity offer attractive pricing in the near
term. Utility PV becomes competitive with new coal around 2030 and joins the ranks of the most
cost-effective sources of non-hydro renewable electricity over a longer time horizon. Distributed
resources such as rooftop and community PV are not shown because they do not compete in the
same space.
WHOLESALE LEVELIZED COST OF ELECTRICITY (LCOE)
COMPARISON
04: RENEWABLE ELEC. SUPPLY
STEPPING UP: BENEFITS AND COST OF ACCELERATING FORT
COLLINS' ENERGY AND CLIMATE GOALS
including federal, state, and local incentives. These costs are
approaching Fort Collins’ average residential rate of 8.6 cents/
kWh, with some systems already reporting lower costs and
continued cost reductions likely in the next few years. More
importantly, by developing a city-wide strategy to deploy solar
PV at scale, even greater reductions in cost can be achieved,
especially in so-called “soft costs” of solar systems including
costs of finance, customer acquisition, permitting, inspection, and
interconnection.
FLEXIBILITY
Beyond cost, any future electricity system scenario must also be
able to provide power at least as reliably as Fort Collins’ current
system. Because electricity cannot be easily or cheaply stored,
utilities must maintain a delicate balance of supply and demand
at each moment to keep the lights on. This becomes more
difficult with the addition of variable renewable resources that
produce power when the sun shines or when the wind blows, not
when the utility necessarily wants it. Therefore, a critical part of
an electricity system transformation in Fort Collins is the addition
of flexibility resources—devices or resources whose output can
be adjusted to match variability produced by the combination of
load and renewables.
Beyond Platte River’s existing natural gas peaking plants and
any new combined cycle natural gas capacity that could be
developed, local sources of flexibility that may be available
in Fort Collins include demand response (already available in
Fort Collins in limited quantities), customer-sited thermal or
electrical storage, and electric vehicles (EVs), as well as the grid
intelligence needed to access those resources.
Demand response—the ability to modulate when energy is
demanded, not just when it is supplied—has the potential to
provide a significant source of flexibility to Fort Collins. Fort
Collins Utilities’ recent DOE-funded Renewable and Distributed
Systems Integration (RDSI) project demonstrated the capability of
a portfolio of demand- and supply-resources, including demand
response, to reduce peak demands on a distribution circuit by
20%. Elsewhere in the country, demand response is now allowed
to bid into wholesale markets, providing a significant portion of
new capacity needs.
Aggressive adoption of electric vehicles as discussed in this
report’s transportation chapter could result in electrification of
up to 30% of Fort Collins’ light duty vehicle transportation fleet
by 2030 (about 20,000 vehicles). If unmanaged, this sizable
fleet could present challenges for the grid when large numbers
of electric vehicle owners plug in their cars after work, rapidly
driving up Fort Collins’ peak demand and therefore costs. But
actively managed, electric vehicles can be staged to manage
peak impacts and potentially even provide services back to the
grid.
Another critical lever in enabling a more optimized, localized
electricity system is grid intelligence—smart grid technologies
that enable two-way communication between the utility and
customers, supporting real-time information and signals as
well as more effective control and coordination of distributed
resources. Smart meters and smart grid infrastructure form the
foundation for more distributed grid operations and ultimately a
more granular grid, enabling the kind of results Fort Collins has
tested with its RDSI project and other on-going initiatives.
41
MOVING TOWARD IMPLEMENTATION
This analysis shows that eliminating carbon emissions from
Fort Collins’ electricity system by 2030 can be affordable, but
that does not mean it will be easy. Very few communities in
the country have set such ambitious goals, and successfully
overcoming inherent challenges would put Fort Collins among
an elite group of leaders.
Challenge 1: Success requires driving unprecedented levels
of adoption of distributed resources, and customers have
historically been largely uninvolved in the electricity system.
Eliminating fossil fuels from Fort Collins’ electricity supply
by 2030 is an ambitious goal, and meeting that goal largely
with local resources makes it even more challenging. In the
accelerated scenario modeled in this report, Fort Collins would
need to achieve landmark levels of adoption of distributed
resources, primarily solar. Rooftop solar adoption in Fort Collins
has grown with the availability of solar leasing offers over the last
several years but overall penetration remains low compared with
leading states such as California.
Strategy: Implement new approaches to increase
customers’ motivation and enthusiasm; and provide
relevant, timely, and compelling information.
Understanding what motivates people and how they make
decisions can help ensure that policy-oriented measures
to increase solar adoption are effectively implemented
and conveyed to their intended beneficiaries. Fort
Collins Utilities can facilitate greater adoption through
more targeted marketing based on individual customers’
solar potential, costs, applicable incentives, and broad
dissemination of program information to customers. Further,
an approach to “right-time” rooftop solar installations with
re-roofing could be developed.
Solar is a uniquely visible resource whose adoption
can be driven by peer effects more than other sources
of renewable power. Carefully targeting highly visible
installations across the city (possibly including an
educational exhibit with information on the incentives that
make such installations cost-effective) can serve as a good
starting point to propagate early adoption.
04: RENEWABLE ELEC. SUPPLY
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COLLINS' ENERGY AND CLIMATE GOALS
Figure 5: Fort Collins’ projected technically and economically feasible solar adoption rate in the accelerated scenario
draws from two best-in-class examples, applying a logistic “S-curve” projection for how adoption would evolve.
Actual PV Penetration*
Projected PV Penetration Pathway for Fort Collins
30%
25%
20%
15%
10%
5%
0
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
Fort Collins Theoretical Potential: 30% of Total Generation
PV % of Total Generation
*Creti et al 2013, Bonnefoy 2009, Guldolin and Mortarino 2010: Distributed solar adoption is well-approximated by a logistic S-curve. Incentives and
feed-in tari s help catalyze acceleration and can impact the steepness parameter of the curve.
**FC curve reflects more moderate adoption than Gainesville, which is now considering sunsetting the program due to upward rate pressure from
faster-than-expected adoption.
Source: Clean Coalition, accessed 2013, http://www.clean-coalition.org/unleashing-clean/success-stories/; Gainesville Sun, Feb 2013,
http://www.gainesville.com/article/20130220/ARTICLES/130229936
Fort Collins
Germany
Gainesville Near term adoption rate is highly accelerated.
Similar to Gainesville, FL.**
Over time, adoption rate resembles that of Germany.
DISTRIBUTED SOLAR PV ADOPTION IN FORT COLLINS
In the first few years of the accelerated scenario, Fort Collins’ solar adoption would resemble that of Gainesville, Florida, a city with about the same population as Fort Collins
that instituted a feed-in tariff incentive in 2008 to kick-start implementation. In later years up to 2030, Fort Collins’ adoption would be equivalent to sustaining Germany’s
solar growth on a logistic S-curve that tails off at 30% of generation.
The Germany analog for PV adoption entails two conservatisms: first, Fort Collins needs 30% less installed capacity to generate each kilowatt hour of electricity because
sunny Fort Collins enjoys more annual solar resource than cloudy Germany. This will allow Fort Collins to either exceed Germany’s rate of adoption, or meet it with less
capacity, or both. Secondly, locally applying a nationwide trend overlooks the ability of well-coordinated and well-positioned communities such as Fort Collins to achieve
accelerated local rates of adoption.
FORT COLLINS ACCELERATED SOLAR ADOPTION PATHWAY
43
Challenge 2: Distributed resources have high up front costs.
A renewable portfolio has higher capital costs but lower
operating costs (since the fuel is free) compared to conventional
resources. While the higher capital investment associated with
the accelerated scenario pays back over a longer time horizon, it
still presents a challenge for customers with respect to up-front
financing.
Historically, solar PV’s total installed cost was dominated by
the technology—the photovoltaic module and inverter. But
these hardware costs have dropped so much in recent years
that the “balance of system” (BOS) costs—all cost components
other than the inverter and module—now comprise the majority
of total installed cost. BOS costs include installation labor;
overhead costs, including office administration, property-related
expenses, and insurance; customer acquisition costs, including
marketing and advertisement; installation hardware such as
racking and mounting brackets; and permitting, inspection, and
interconnection costs.
Unlike PV modules that are a global commodity, BOS costs vary
from community to community because of different approaches
to permitting, installation, and other processes. Furthermore,
given the nascent stage of most regional U.S. solar markets,
many installers often operate at low efficiency, have poorly
configured supply chains, or have great difficulty accessing
financial solutions for their customers.
Strategy: Drive down distributed resources' costs and
provide new solutions to financing issues.
The City needs to be innovative in employing a full array
of financing mechanisms based on methods used in other
communities, other industries, and the financial sector to
ensure stable electricity prices during this transformation.
Already moving in this direction, Fort Collins implemented
an on-bill financing (OBF) program in January 2013,
although it has thus far seen limited uptake.
Third-party financing has proven to be a market accelerant
for residential and commercial building solar PV markets,
nationally and in Fort Collins. A further market accelerant
are Feed-in-Tariffs (FiTs), which have resulted in solar PV
booms in several European countries as well as in a limited
set of U.S. jurisdictions, since they provide clear price
signals to customers and lower financing costs due to long-
term, predictable credit dynamics.22
Affordability and accessibility are two key criteria for
successful financing programs. One solution that enhances
both attributes is on-bill repayment (OBR), which, unlike
OBF, enables equity ownership of systems by third-
parties, with the accessibility benefit of a single power
bill, not available in typical third-party solar PV leases and
power purchase agreements. Solar PV financing is highly
dependent on the monetization of its considerable tax
benefits, thus generally relying on for-profit, third-party (tax
22 “THE TRANSFORMATION OF SOUTHERN CALIFORNIA’S RESIDENTIAL PHOTOVOLTAICS
MARKET THROUGH THIRD-PARTY OWNERSHIP,” EASAN DRURY ET AL, ENERGY POLICY, 2012.
HTTP://CLEANTECHNICA.COM/2011/11/22/GAINESVILLE-FLORIDA-BIGGER-PER-CAPITA-SO-
LAR-PRODUCER-THAT-CALIFORNIA/ (ACCESSED 8/22/2013)
04: RENEWABLE ELEC. SUPPLY
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COLLINS' ENERGY AND CLIMATE GOALS
equity) investors to enable the lowest customer pricing.
When OBR for solar includes limited loss reserve protection
by the utility, cost of capital is lowered and thus affordability
further improved. OBR, particularly with a utility loss
reserve, lays a foundation for deeper relationships with the
utility, which can become more valuable over time.
A further accessibility benefit of OBR can be achieved
by layering on virtual net metering (community solar or
otherwise) opportunities and credit against-the-meter.
Both virtual net metering and against-the-meter credit
determinations enhance accessibility to renters and building
owners with poor solar or other distributed resource access.
Better financing solutions should allow Fort Collins Utilities
to phase back incentives over time, and focus budgeting
decisions on stabilizing utility economics. Budgeting
determinations for the utility are best served by offering
volumetric capped FiT offerings, but with enough forward-
market certainty to avoid boom-bust cycles for the local
distributed resource supplier and investor base.
Beyond financing, Fort Collins can directly and substantially
influence solar balance of system (BOS) costs, with the
potential to reduce them enough to bring the levelized
cost of rooftop solar PV in line with residential rates.
Germany has set a precedent for capitalizing on this type
of opportunity. There, soft costs—customer acquisition,
installation labor, and permitting, interconnection, and
inspection—are 73% lower than in the U.S.
Achieving significant BOS cost reductions in the U.S.
requires first adopting best practice recommendations
from the Solar America Board for Codes and Standards’
Expedited Permit Process for PV Systems and Emerging
Approaches to Efficient Rooftop Solar Permitting23 and
IREC’s Sharing Success: Emerging Approaches to Efficient
Rooftop Solar Permitting.²⁴ Best practices include over-
the-counter, same-day permit review; clear, accessible
webpages focused on the permitting process; exempting
small systems from requiring building permit review; and
providing consistent and current training for inspectors.
Further, Fort Collins could develop a “cookie cutter” solar
design, combine building department permitting with the
utility interconnection process, and leverage the City to
aggregate demand and resulting purchasing power up the
hardware supply chain.
0
1.00
2.00
3.00
4.00
5.00
6.00
7.00
BOS:
Customer
Acquisition,
Permitting,
Interconnection,
Inspection,
Overhead
45
These approaches have been successfully implemented
elsewhere in the U.S. and are proven to reduce costs:
Massachusetts successfully implemented a bulk purchasing
“solarize” program in several communities that lowered
installed costs from the state average by over 25%.²⁵ The
City of Denver, together with other partners, recently
offered its employees a group-discounted rate for solar PV
installation of $3.80/W,²⁶ a remarkably low rate secured
through a scaled group purchase. Fort Collins, too, has
revised its processes, earning gold level recognition from
the Solar Friendly Communities initiative; the City now has
an opportunity to move towards platinum recognition.
Finally, a proven method for reducing BOS costs is to
optimize the number of days spent installing a system, since
every reduction in installation cost has a corresponding
reduction in overhead costs.²⁷ To meet this goal, specific
strategies and tactics need to be developed, such as
employing a revamped PV system inspection protocol
allowing for self-certification of PV installs by certified solar
installers.
These BOS cost reductions in combination with on-going
module and inverter price reductions can propel Fort
Collins toward the U.S. Department of Energy’s SunShot
target of a total installed cost of $1.50/W by 2020,²⁸ which
would allow Solar PV to be installed well under the cost of
grid electricity in Fort Collins without local subsidy.
Challenge 3: Distributed resources have different benefits and
costs compared to centralized resources, and the system is not
set up to measure or monetize those values.
Distributed resources have unique siting, operational, and
ownership characteristics compared to conventional centralized
resources. The value of distributed resources is temporally,
operationally, and geographically specific and because of that,
existing pricing mechanisms are not in place to recognize
or reward service that is being provided by either the utility
or the customer.
It is critical to better understand the services that distributed
resources can provide, and the benefits and costs of those
services as a foundation for more accurate pricing and market
signals. The categories of benefit and cost are broadly agreed
on, but some are not readily quantifiable or are not generally
monetized in electric rates. For example, distributed solar
coupled with storage could potentially provide voltage regulation
services to the grid, but the value of that service does not accrue
to the customer who made the investment.
²⁵ PRESENTATION BY YOUNGBLOOD, ELIZABETH. "THE SOLARIZE MASSACHUSETTS
PROGRAM". MASSACHUSETTS CLEAN ENERGY CENTER, 2013.
²⁶ SEE HTTP://WWW.SUSTAINABLEBUSINESS.COM/INDEX.CFM/GO/NEWS.FEATURE/ID/1920
FOR MORE INFORMATION.
²⁷ RMI’S SIMPLE BOS PROJECT IS WORKING TO CHARACTERIZE THE BOS COST DIVIDE
BETWEEN GERMANY AND THE U.S. THROUGH A LEAN PROCESS APPROACH, ON-SITE TIME-
AND-MOTION STUDIES, INDUSTRY INTERVIEWS, AND SURVEY-BASED DATA COLLECTION.
THE PROJECT HAS FOUND LEADING INSTALLERS ARE ALREADY VERY CLOSELY
APPROACHING GERMANY-CALIBER BOS COST LEVELS.
²⁸ U.S. DEPARTMENT OF ENERGY. SUNSHOT VISION STUDY. FEBRUARY 2012. HTTP://WWW1.
EERE.ENERGY.GOV/SOLAR/PDFS/47927.PDF
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Strategy: Assess distributed resources' benefits and costs,
and develop appropriate mechanisms to value them.
Fort Collins can ensure accurate accounting for the
additional values distributed energy resources provide—
including environmental benefits, avoided generation
capacity, avoided transmission and distribution capacity,
avoided line losses, and fuel price hedging—by first
conducting a study to assess the magnitude of these values
on the Fort Collins system, then by adapting pricing and
incentive mechanisms accordingly.
An example of how these values are being recognized
elsewhere is Austin Energy’s Value of Solar Tariff (VOST).²⁹
In Austin Energy’s case, fully-valued distributed solar PV
is actually worth more than its retail price, creating an
appealing value proposition for the utility and, in turn, for
the community. Of course, the total value that distributed
solar PV would provide to Fort Collins varies from this
example, based on factors such as the quality of the solar
0.02
0.04
0
0.06
0.08
0.10
0.12
0.14
0.16
Environmental
Benefits
Energy
Generation
Generation
Capacity
Savings
Transmission Loss Savings
& Distribution
Capacity
Savings
Fuel Price
Hedge Value
Total Value
Levelized Cost (2013 $/kWh)
12.8 /kWh
Source: Rabago, K., Norris, B., Ho , T., Designing Austin Energy's Solar Tari Using A Distributed PV Calculator. Clean Power
Research & Austin Energy, 2012.
PROPERLY VALUING DISTRIBUTED SOLAR
²⁹ RABAGO, K., NORRIS, B., HOFF, T., DESIGNING AUSTIN ENERGY'S SOLAR TARIFF USING
A DISTRIBUTED PV CALCULATOR. CLEAN POWER RESEARCH & AUSTIN ENERGY, 2012.
Figure 7: Austin’s Value
of Solar Tariff provides a
tangible—if incomplete—
proxy for distributed solar
PV valuation.
47
resource and the future need for electricity capacity.
Fort Collins has a foundation from which to build such an
approach—Platte River now purchases energy from Fort
Collins’ solar power purchase program based on specific
valuation factors.
Challenge 4: Operating a more distributed, diverse system
requires integrating new sources of flexibility and developing
new coordination and communications approaches.
Unlike almost any other consumer product, electricity has no
shelf life—it cannot be easily or cheaply stockpiled or stored.
Electricity demand and supply must be perpetually balanced,
and when that balance is disrupted, brownouts and blackouts
result. Introducing renewables such as wind and solar makes
maintaining that balance more challenging because unlike coal,
natural gas, or hydro plants, output from wind and solar varies
with the weather. Further, the electricity system vision presented
here is much more dispersed—25% of generation is from
distributed sources by 2030. This provides advantages, but only
if the mechanisms for deploying and managing these variable
and distributed resources are in place alongside the hardware to
generate them.
The need for flexibility will require use of available natural gas
generation, incorporation of a broad array of storage resources
(like demand response, electric vehicles, thermal storage, and
potentially even battery storage), and real-time grid monitoring
and dispatch that is much more responsive.
Strategy: Support the integration of flexibility resources
including smart grid, demand response, and electric
vehicles; and begin to implement advanced coordination
and communications strategies.
In part because of a decades-old decision to underground
Fort Collins’ electricity distribution lines, Fort Collins has
just one third the system interruptions compared to the
national average. Effectively and reliably operating Fort
Collins’ electric system with very high levels of renewables
requires innovative new approaches, including full utilization
of the utility’s smart grid capabilities, expanding demand
response potential, and integrating electric vehicles
with smart charging capabilities. Fort Collins already has
efforts underway in a number of these areas, is home to
several leading smart grid technology companies, and has
completed one successful demonstration project (the RDSI
project). The City should leverage these strengths to remain
at the leading edge of flexibility resource adoption and
integration.
The key to maintaining reliability is developing a portfolio of
resources that work together seamlessly. There are several
reasons why Fort Collins is well positioned to manage
this issue smoothly and maintain reliability. Fort Collins
does not have to balance its system alone; it is part of a
larger balancing area operated by Xcel Energy, providing
significant operational benefits and ancillary services,
and easing the integration of renewables. Platte River is
also considering new strategies for providing flexibility in
the form of load following to support higher integration of
variable renewable resources.
04: RENEWABLE ELEC. SUPPLY
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Further, Fort Collins Utilities’ on-going smart grid rollout will
provide more granular, timely data about electricity usage
and eventually enable the utility to send signals to customers
to provide additional grid flexibility. Finally, there is active
support and engagement around demand response and
electric vehicles, each of which can provide grid flexibility.
Fort Collins Utilities is procuring a new state of the industry
demand response system as part of the Advanced Meter
Fort Collins projects and continues to participate in research
and development following up on the RDSI project. The
Electrification Coalition recently launched an initiative to
support widespread adoption of electric vehicles.
Challenge 5: Fort Collins Utilities' has a contractual relationship
with Platte River that disallows purchases from other entities.
Except for a very small quantity of distributed generation from
rooftop solar, all city electricity currently originates from large,
centralized sources operated by Platte River and Western Area
Power Administration. Fort Collins is currently under contract with
Platte River for all its electricity requirements, although under its
feed-in tariff (FIT) program, Fort Collins Utilities will purchase local
solar output as an agent of Platte River.
Platte River, in turn, is committed to coal power from the Yampa
Project and Rawhide Plant 1, which are set to retire in 2030 and
2050, respectively. As Fort Collins implements its accelerated
strategy for carbon neutral electricity, it will demand significantly
less coal-based electricity from Platte River. Identifying and
preemptively addressing any potential impacts on the Fort Collins/
Platte River partnership will be key to ensuring a seamless and
mutually beneficial clean energy transition for both organizations.
Strategy: Enhance collaborations with Platte River to develop
effective strategies that enable more renewables.
While much of this chapter has focused on distributed resources
like rooftop solar, community solar, and energy efficiency due to
their unique benefits and implementation challenges, centralized
renewables—particularly wind and utility scale solar—will be a
similarly critical resource in Fort Collins’ energy future. The wind
resource that Fort Collins Utility has access to via Platte River
is extremely cost-competitive and available in the near-term.
Fort Collins should continue to collaborate with Platte River to
develop strategies to bring more centralized wind into the mix as
quickly as possible. Fort Collins’ carbon neutral electricity system
by 2030 strategy calls for nearly half of generation from wind,
ramping from 8 MW of capacity today (Fort Collins’ effective
share of Platte River’s capacity) to more than 230 MW in 2030.
SUMMARY
With concerted effort, Fort Collins can have a carbon neutral
electricity system by 2030. Realizing this vision would require $230
million present value added investment, but by 2050 would save
$400 million present value, and would energize local economic
development and innovation. It would reduce Fort Collins’ carbon
emissions 10 million metric tons from business as usual by 2030,
and would build off of Fort Collins’ already notable electric reliability
to create a truly resilient electric system that will sustain the
community into the future.
Further, a transformed electricity system would enable the transition
to cleaner and more secure energy options in other sectors of
the energy economy, notably transportation. The City, Fort Collins
Utilities, and the community all play crucial roles in enabling this
05
ADVANCED
TRANSPORTATION
Image courtasy of Shutterstock
05
ADVANCED
TRANSPORTATION
STEPPING UP: BENEFITS AND COST OF ACCELERATING FORT
COLLINS' ENERGY AND CLIMATE GOALS
ADVANCED TRANSPORTATION
BY 2030, FORT COLLINS COULD REDUCE
GASOLINE AND DIESEL CONSUMPTION BY
48% FROM BUSINESS-AS-USUAL, SAVING
$480 MILLION IN FUEL COSTS AND AVOIDED
VEHICLE MAINTENANCE.
The Fort Collins community consumes 58 million gallons of
gasoline and diesel each year driving to work and school,
delivering products and services, running errands, or just
recreating and getting away. Driving enables business and life
to run smoothly, but today’s transportation paradigm comes with
costs.
Transportation accounts for 36% of Fort Collins’ total energy
consumption, running mostly on gasoline and diesel fuels.
Almost all of Fort Collins’ oil use is used for transportation. The
consumption of these fuels has wide-ranging impacts on the
local environment—it’s a major contributor to local criteria air
pollutants like NOx, SO₂, and particulate matter, and on fuel
costs to the community. Because liquid fuels like gasoline and
diesel are more expensive than other primary energy sources,
they account for over half of Fort Collins’ energy expenditures.
Transportation energy accounts for 20% of Fort Collins’ total
contribution to global CO₂ emissions, thereby also playing a role
in Fort Collins’ contribution to broader global climate issues,
including political and security risks from importing oil.
The good news is that aggressive new national fuel economy
standards and, to a lesser extent, modest increases in
electric vehicle adoption will help to curb Fort Collins’ future
transportation energy demands, even with projected population
increases.³⁰ Together, these two developments help to reduce
transportation energy use by 22% from today, and comprise the
business-as-usual trajectory analyzed in this report.
This analysis suggests, however, that there is a potential to
reduce Fort Collins’ transportation energy use even further—to
about half that of business as usual—while also providing greater
transport options, ease, and convenience to the community. As
described in Fort Collins’ 2011 Transportation Master Plan,³¹ the
City is already pursuing a number of interventions to capture
these benefits. Building on this strong foundation, Fort Collins
can utilize two broad policy and planning levers. First, it can
reduce the need to drive in the first place by implementing
strategies like improved urban planning and access to
pedestrian, bicycle, and public transport options. Doing so has
the potential to reduce transportation energy consumption by
30% from business as usual. In tandem, Fort Collins could work
to dramatically increase adoption levels of more efficient and
electric vehicles so that when people do drive, they use less oil.
This strategy could further lower energy consumption by 18%
from business as usual. Between 2013 and 2030, investments in
both strategies would amount to a net savings of $480 million in
fuel costs and avoided vehicle maintenance for the community.
The benefits of pursuing Fort Collins’ full potential for
transportation energy savings extend beyond costs savings.
³⁰ AGGRESSIVE NEW NATIONAL FUEL ECONOMY STANDARDS SET IN 2012 REQUIRE 54 MPG
AVERAGE GAS MILEAGE FOR NEW VEHICLES BY 2025. IN ORDER TO MEET THESE TARGETS,
ALL CARS AND TRUCKS WILL BECOME MORE AERODYNAMIC, LIGHTER, AND HAVE
IMPROVED ENGINE TECHNOLOGY.
³¹ “FORT COLLINS TRANSPORTATION MASTER PLAN,” CITY OF FORT COLLINS, 2/15/11.
51
With enhanced urban planning and smart growth, people can
get places faster and more conveniently. Less driving means
less congestion, and consequently, improved local air quality.
Continuing the work the City has already started will also
continue to build on one of the community’s greatest strengths—
being a bikable, walkable city. Finally, as was discussed in the
electricity chapter, increased electric vehicle adoption can
support the integration of renewable electricity resources by
providing demand response.
UNDERSTANDING THE FULL POTENTIAL
By adapting national estimates for transportation energy
reduction potentials to Fort Collins, we can get a sense for
“how far” and “how fast” Fort Collins can accelerate its own
transportation energy reductions. The analysis presented here
focuses largely on personal vehicles, which account for the lion’s
share—97%—of Fort Collins’ total transportation energy use.
Figure 1, below, summarizes our findings.
Part 1
(p.52)
Part 2
(p.54)
0
10
20
30
40
50
60
70
Trucks Cars Heavy Duty
Million Gallons
BAU
E ciency
Savings
23
2030
Demand with
Frozen
E ciency
68
Driving Less:
30% VMT
Reduction per
Person
13
Electric Vehicles:
EV and PHEVs
Reach 50% of New
Car Sales by 2020
4
High E . Vehicles:
Avg. E . of New
Sales Increased
Half Way to
Best-In-Class
5
2012 Actual
Consumption
58
STEPPING UP: BENEFITS AND COST OF ACCELERATING FORT
COLLINS' ENERGY AND CLIMATE GOALS
Part 1: Strategies that make it easier for Fort Collins to drive less
can save an estimated 30% of energy from business-as-usual
by 2030.
On average, Fort Collins’ residents drive 7,500 miles per person
each year, about 30% less than the national average.³² This is a
testament to Fort Collins’ large university population (that tends
to drive less) and to the great success Fort Collins has to date in
developing a vibrant, multiuse core with pedestrian and bicycle
friendly infrastructure. Considering Fort Collins’ size, projected
growth, and ongoing transportation initiatives, we estimate
annual vehicle miles traveled (VMT) per person could be
reduced 25%-40% from business as usual by further:
• increasing smart growth,
• improving multimodal and alternative commuting options,
• creating and evolving intelligent transportation systems, and
• implementing pricing signals and strategies.
These tactics are not intended to infringe on the community’s
prerogative to drive. Rather, they aim to reduce the need in the
first place by improving access to destinations and goods, and
by providing other benefits that result in fewer, more timely,
and shorter trips. On average, driving 30% less would save Fort
Collins’ residents about $1500 per year per person in avoided
fuel and maintenance costs alone.³³
a. Smart Growth
Smart growth is an approach to urban and transportation
planning that emphasizes increased urban density, mixed use
development with commercial, residential, and recreational
destinations in close proximity, and interconnected, walkable
and bikeable streets. People drive less when the things they
need are closer and more easily accessible. A 2007 Urban Land
Institute study concludes that this type of high-density, multi-use
space could lead inhabitants to drive 20%-40% less.³⁴
Fort Collins’ City Plan is predicated on smart growth and
development. The City has consistently incorporated smart
growth criteria into its development decisions; impacting codes,
zoning, and transportation master planning. But certainly not
all growth in Fort Collins follows smart growth tenets, so there
remains significant opportunity to expand smart growth. Because
Fort Collins’ near term projected population growth rate is 1.9%
per year (almost three times the national average), there is likely
to be more new growth than in some other places, and smart
growth is easier to implement at first development rather than
in retrofit. Therefore, further emphasizing smart growth could
represent an important opportunity for future reductions in
transportation energy use.
³² SOURCE: ORNL TRANSPORTATION ENERGY DATABOOK, EDITION 31
³³ TRANSPORTATION IS THE SECOND BIGGEST EXPENDITURE FOR THE AVERAGE AMERICAN (MORE THAN FOOD, HEALTHCARE, OR ENTERTAINMENT). ONLY HOUSING ACCOUNTS FOR A LARGER
SHARE OF PER CAPITA EXPENSES. OAK RIDGE NATIONAL LABORATORY TRANSPORTATION ENERGY DATABOOK, TABLE 8.3
³⁴ “GROWING COOLER: THE EVIDENCE ON URBAN DEVELOPMENT AND CLIMATE CHANGE,” REID EWING ET AL, URBAN LAND INSTITUTE, 2007.
HTTP://WWW.MWCOG.ORG/UPLOADS/COMMITTEE-DOCUMENTS/U1ZBXLK20070921140031.PDF
53
b. Alternative and Multimodal Commuting
Smart growth brings destinations closer and makes walking
or taking public transportation easier. This, in turn, makes it
more feasible and appealing for residents to switch from single
passenger vehicles to alternative commuting (e.g. bicycling,
walking, public transit carpooling, etc.) or to multimodal
commuting (using several alternative modes to get to a single
destination).
Fort Collins’ current progress towards alternative and multimodal
commuting is encouraging. The community is already a
demonstrated leader in bike ridership (6.8% ridership compared
with the 2009 national average of 0.6%).³⁵, ³⁶ Public transit use
has also increased rapidly, and now exceeds two million riders
per year. The City is currently building the first of several planned
Enhanced Travel Corridors to create multimodal transit links with
one of Colorado’s first Bus Rapid Transit systems. Continuing to
improve and invest in these options is an essential complement
to the other levers for driving less.
c. Intelligent Transportation Systems
As personal mobile devices like smartphones become more
commonplace and costs for gathering and synthesizing
transportation data become cheaper, cities can integrate real-
time information from the transportation system into streamlined
and convenient user interfaces. Doing so would enable
commuters to easily access schedule and traffic updates for
all transportation modes including cars, taxis, bicycles, public
transit, and car sharing. Driving less then becomes easier, as
the ability to find and confirm alternate modes of transportation
becomes more reliable and trips can be planned “on the go.”
Some cities (like New York City) are capitalizing on this
opportunity by investing and developing intelligent
transportation software themselves; others (like Chicago)
are making transportation data available for third-party app
designers to develop useful and marketable products.³⁷ Fort
Collins will be developing the next version of its FC Trip trip-
planning website functionality for handheld or tablet applications,
enabling people to more easily access travel information.³⁸
d. Pricing Signals
As multimodal transport options become more plentiful and
convenient, price signals can help the City manage variegated
traffic flows from personal vehicles, public transport, cyclists,
and pedestrians, especially in congested areas and those with
persistent parking issues. Fees for parking and congestion,
³⁵ “FORT COLLINS’ TREK TO BICYCLE NIRVANA DEPENDS ON MORE RIDERS, FEWER ACCIDENTS: ELITE DESIGNATION IS NEXT GOAL FOR CITY THAT JUST ACHIEVED ‘PLATINUM’ AWARD,” DAVID
YOUNG, COLORADOAN.COM, 6/13/13. HTTP://WWW.COLORADOAN.COM/ARTICLE/20130613/NEWS01/306130074/FORT-COLLINS-TREK-BICYCLE-NIRVANA-DEPENDS-MORE-RIDERS-FEWER-ACCIDENTS
³6 "ANALYSIS OF BICYCLING TRENDS IN LARGE NORTH AMERICAN CITIES: LESSONS FOR NEW YORK," JOHN PUCHER AND RALPH BUEHLER, UNIVERSITY TRANSPORTATION RESEARCH CENTER, 2011.
HTTP://WWW.UTRC2.ORG/SITES/DEFAULT/FILES/PUBS/ANALYSIS-BIKE-FINAL_0.PDF.
³⁷ “BY THE NUMBERS: CITIES ARE FINDING USEFUL WAYS OF HANDLING A TORRENT OF DATA,” THE ECONOMIST, 4/27/13. HTTP://WWW.ECONOMIST.COM/NEWS/UNITED-STATES/21576694-CITIES-
ARE-FINDING-USEFUL-WAYS-HANDLING-TORRENT-DATA-NUMBERS
³⁸ EMAIL CORRESPONDENCE WITH MARK JACKSON, DEPUTY DIRECTOR OF FORT COLLIN’S PLANNING, DEVELOPMENT AND TRANSPORTATION, 8/22/2013.
05: ADVANCED TRANSPORTATION
STEPPING UP: BENEFITS AND COST OF ACCELERATING FORT
COLLINS' ENERGY AND CLIMATE GOALS
implemented at rush hour and in the busiest areas, will
encourage drivers to look for alternatives. The City’s current
Parking Plan (adopted in January 2013) identifies prominent
existing parking shortages in downtown and other heavy traffic
areas, as well as future parking issues in other locations. The
Parking Plan includes future options to incorporate fees for
parking.³⁹
Replacing free parking with paid parking is often controversial,
but there are some significant benefits to commuters and
business owners. Because pricing discourages some commuters
from driving, paid parking reduces idling and circling, which
accounts for up to a third of downtown traffic and congestion
in some cities.⁴⁰ Paid parking has also been shown to relieve
parking constraints in retail areas, making it easier for people
who do need to drive to access shops, increasing business.
For example, enforcing pricing on streets like College Avenue
distributes parking to less busy side streets and parking garages,
while also increasing customer turnover.⁴¹ “Free” parking
comes with high hidden costs that are passed through to the
public, business owners, and others for associated land and
construction fees. These range between $500 and $800 per
year per space, or an estimated $10,000–$20,000 total for
Fort Collins.⁴²
Part 2: An additional 18% of energy could be saved from
business-as-usual by accelerating adoption of fuel-efficient
autos and electric vehicles.
Programs to maximize the adoption of fuel efficient autos and
electric vehicles can ensure that when people do drive, they’re
consuming less oil—or better yet, substituting oil with cleaner
energy sources like renewable-powered electricity.
Because there is a common perception that hybrid and electric
vehicles are more expensive than conventional cars, general
consensus is that more time needs to pass before these cars
become affordable. But with rapid advances over the last few
years, this perception no longer holds true. Sticker prices for high
efficiency vehicles, hybrids, and electric vehicles (with incentives)
are already competitive today with typical mid-sized vehicles sold
in the U.S. After factoring in fuel cost savings, high-efficiency,
hybrid, and electric vehicles can all be cheaper to own today
than conventional vehicles.
Planning a transportation future that minimizes emissions and
other environmental impacts also requires an understanding of
vehicle options in terms of potential for:
• Further near-term reductions in cost of ownership
• Environmental impact mitigation
• Long range, which has been a highly visible limiting factor for
the adoption of battery electric vehicles (BEVs)
³⁹ “PARKING PLAN FORT COLLINS: NEIGHBORHOODS,” CITY OF FORT COLLINS, 1/15/13. HTTP://WWW.FCGOV.COM/ADVANCEPLANNING/PARKINGPLAN.PHP
⁴⁰ “CRUISING FOR PARKING,” DONALD SHOUP, ACCESS, NO. 30, 2007. HTTP://SHOUP.BOL.UCLA.EDU/CRUISINGFORPARKINGACCESS.PDF
⁴¹ “PARKING PLAN FORT COLLINS: DOWNTOWN AND SURROUNDING NEIGHBORHOODS,” PP. I-1–I-3.
⁴² “TRANSPORTATION COST AND BENEFIT ANALYSIS II — PARKING COSTS,” VICTORIA TRANSPORT POLICY INSTITUTE, 2/22/12. HTTP://WWW.VTPI.ORG/TCA/TCA0504.PDF. SEE ALSO: “THE HIGH
COST OF FREE PARKING,” DONALD SHOUP, JOURNAL OF EDUCATION AND RESEARCH, VOL. 17, NO. 1, FALL 1997, PP. 3–20, AND “THE HIGH COST OF FREE PARKING,” DONALD SHOUP, CHICAGO:
PLANNERS PRESS, 2011.
55
VEHICLE DESCRIPTION CONSIDERATIONS
High efficiency vehicles like the Nissan Versa
Powered by conventional internal combustion engines
burning gasoline or diesel, but with improved mileage due to better
aerodynamics, lower weight, and improved engine technology.
• Do not cost more upfront than conventional vehicles in most cases
• Use significantly less fuel (up to 30%–75% less than conventional vehicles) — resulting in significant cost
savings and CO₂ emissions reductions
Hybrid vehicles like the Toyota Prius
Rely solely on gasoline or diesel for energy supply but use a combined
combustion and electric motor to improve overall efficiency and reuse otherwise
wasted braking energy.
• Can offer further efficiency gains beyond non-hybrid high-efficiency vehicles
• Cost-effective and technologically mature today
Battery Electric Vehicles (BEVs)
like the Nissan LEAF
Run solely on electricity, offering two to three times higher
efficiency than gasoline or diesel vehicles.
• Including incentives, have an equivalent or lower total cost of ownership than other options today. Even
without incentives, the LEAF is cost-competitive today against an average midsize car.
• Sticker price will likely continue to fall as batteries get cheaper and automakers gain increased
technological experience.
• Do not emit local CO₂ or other emissions while operating, and will be responsible for little or no
emissions as the grid is increasingly powered by renewables.
• Currently limited by battery range (e.g. 115 miles for the LEAF), a significant constraint in current
adoption rates.
• Could benefit from investments in public charging stations, but commonly available 120 and 240V
outlets are sufficient for most early applications.
Plug-in Hybrid Electric Vehicles (PHEVs)
like the Chevy Volt
Operate as electric vehicles, but with a smaller gasoline generator that
continues to power the vehicle once the battery surpasses its range.
• Purchase price for these vehicles can be cost-prohibitive without incentives, but prices are expected to
fall dramatically in coming years as batteries get cheaper and automakers gain technology experience.
Considering state and federal incentives, these vehicles can be cost-competitive.
• Avoid the range constraint of BEVs.
• Offer the same emission benefits as BEVs when operating in electric-only mode.
Compressed natural gas vehicles (CNG)
like the Honda Civic Natural Gas Vehicle
Natural gas is stored in a pressurized tank and combusted to fuel the vehicle
instead of gasoline or diesel.
• Have become cheaper to operate as a result of recent low gas prices, but purchase price and first costs
for home refueling stations are still prohibitive.
• Can be more cost-effective for centralized fleets—e.g. taxis—that share refueling stations and
accumulate higher annual mileages.
• Responsible for approximately 30% lower CO₂ emissions than conventional gasoline-fired vehicles, as a
result of natural gas’ comparatively more benign emissions profile, on a per unit energy basis.
Hydrogen fueled vehicles (not yet commercially available
for light duty personal vehicles)
Hydrogen is used to fuel the vehicle, either by fuel cell or by combustion engine.
• Only offered by a few manufacturers today, as test vehicles in limited numbers
• Cost two to five times more than a conventional vehicle.
• Also requires a potentially large investment for hydrogen distribution and refueling infrastructure.
Table 1 lists and describes the vehicle types assessed in this report, along with a qualitative summary of important considerations for each. Figure
2 compares the current cost of ownership for these vehicles, which includes an analysis of purchase price plus three years of fuel expenses.
Table 1: Vehicle Options
05: ADVANCED TRANSPORTATION
STEPPING UP: BENEFITS AND COST OF ACCELERATING FORT
COLLINS' ENERGY AND CLIMATE GOALS
The future 2030 scenario we analyzed is driven by an accelerated
adoption of cost effective fuel-efficient autos and electric vehicles,
shaped by projected vehicle turnover rates, trends in future vehicle
cost reductions, and a limited near-term BEV market due to range
constraints. To explore the potential for transportation sector
energy reductions we have assumed the following: by 2030, the
average fuel economy of new vehicle sales can be raised halfway
to best-in-class; on top of that, 50% of all new sales are electric
vehicles (BEV and PHEV).
As a benchmark, the state of California has achieved hybrid vehicle
sales roughly twice the national average, and within some zip
codes hybrids exceed 20% of auto sales—four to five times the
national average.⁴³
Part 3: Additional energy reductions from business-as-usual can
be achieved by transitioning heavy-duty trucks to compressed
natural gas and biofuels.
As shown in Figure 1, heavy-duty trucks account for a significant
share of remaining energy consumption as car and light trucking
stocks become less oil-dependent. While strategies for reducing
this contribution were not explored fully in this analysis, there are
several options the City can pursue. The City has been converting
public buses to run on compressed natural gas; reducing CO₂
emissions and saving fuel costs in the process. Other heavy-duty
truck fleets (like garbage trucks) could be good candidates for
conversion to natural gas, because they can take advantage of
the economies of scale from investing in central fueling stations.
Biofuels are also a viable alternative, especially for longer-range
applications like freight, because they don’t require as significant
fuel tank or fueling station changes.
⁴³ PHONE CONVERSATION WITH UC DAVIS PROF. THOMAS TURRENTINE, JUNE 10, 2013.
0 $10,000 $20,000 $30,000 $40,000 $50,000
Purchase Price 3 Yr Fuel Price Incentives Refuel Station Price MPG Equivalent
Conventional:
Budget Midsize
BEV
Hybrid
PHEV
GM Volt
37 Gas / 98 Elec
Civic CNG
31
Nissan Leaf
115
Toyota Prius
50
25
CNG
Hydrogen
Source: Fueleconomy.gov, EIA Annual Energy Outlook 2011: ref2011.d020911a.
$22,000 $6,900
$12,500
$12,500
$5,000
High E ciency
Nissan Versa
$22,000 $4,650 35
$22,000
$50,000 $120,000
57
MOVING TOWARDS IMPLEMENTATION
The transformation of the transportation system—both in
infrastructure and in vehicle mix—proposed here is significant.
Addressing the following formative challenges will be critical for
implementing a 2030 target.
Challenge 1: Tactics for driving less must be implemented over
a long timeframe, are harder to measure, and are sometimes
unpopular.
While smart growth, public transportation, multi-modal
transportation, and other strategies to drive less have been
proposed for decades around the country, adoption remains low
and changing that requires an on-going cultural and behavioral
shift in the community. Strategies do not reach their full potential
unless integrated well together.
Strategy: Double down on all four driving-less tactics, plus
focus on effective integration to maximize benefits.
The City has recognized the value of smart growth for some
time. Capturing the full opportunity will require continued
planning and discipline—any new development that is not
based on smart growth principles will essentially be locked
in for several decades. Opportunities to retrofit smart
growth through infill or redevelopment are less common,
but need to be identified and executed as they arise.
Smart growth will encourage alternative and multimodal
commuting by bringing destinations closer and improving
access to transit hubs. Continued investment in public
transit, business commute trip reduction programs, and
fleet driver training, combined with seamless integration
into the rest of the Intelligent Transportation System will
help users take full advantage of the infrastructure. With
strong alternatives to driving in place, paid parking can help
provide feedback to users.
Challenge 2: Many customers aren’t motivated to prioritize fuel
efficiency and don’t understand the value proposition of high
efficiency or alternatively fueled vehicles.
Most people don’t consider fuel cost when they’re at the
dealership, and perceived environmental benefits weigh in
among a long list of other important shopping criteria. Tax
rebates that may make these vehicles more economically
attractive can be confusing and a hassle. EVs, including both
BEVs and PHEVs, have additional challenges: most customers
don’t know much about EVs and dealerships aren’t always sure
how to sell the value proposition.
Strategy: Implement new approaches to increasing
customers’ motivation and provide education and
outreach around value proposition, drawing from the
latest behavioral science insights.
The City can help citizens better understand their options,
how federal and local incentives work, and perhaps most
importantly that they are contributing to shared community
and environmental goals. Many of the same behavioral
science insights discussed with respect to building
efficiency and solar adoption in the Efficient Buildings and
05: ADVANCED TRANSPORTATION
STEPPING UP: BENEFITS AND COST OF ACCELERATING FORT
COLLINS' ENERGY AND CLIMATE GOALS
Renewable Electricity Supply chapters are applicable here
as well. Research has shown that purchasing a vehicle is as
much a statement of identity or values as it is about function
and utility. The City could even reinforce a citizen’s choice to
participate in community environmental goals with a sticker
or license plate frame that then also serves to spread
program awareness.
The Electrification Coalition is working with Fort Collins
and local dealerships through its Drive Electric Northern
Colorado program to help reach out to customers,
raise awareness, and better communicate the EV value
proposition. The City is also working to lead by example,
purchasing EVs for its own fleet where they make sense,
and this program could potentially be expanded. Finally,
Fort Collins can work with its local dealerships to provide
education about the EV value proposition in the same way
that building efficiency programs work with local contractors
and hardware stores to educate customers.
Challenge 3: First cost of alternate vehicles is perceived to be
prohibitive, especially before incentives.
While this analysis shows that high efficiency vehicles and EVs
can be cost-competitive today, not many car buyers are aware of
that. In addition, some models are more expensive, the range of
models is limited, and they generally have a high up front cost in
exchange for fuel savings later.
Strategy: Incentivize the purchase of electric vehicles.
Fort Collins could potentially drive cost reductions by
facilitating bulk purchases, perhaps partnering with other
like-minded communities (Governor Hickenlooper has taken
a similar approach at the state level, but focused on natural
gas vehicles).
The City can offer additional incentives and benefits to
sweeten the deal and further influence behavior. Because
the city has limited control over vehicles coming in and
out of the city, any incentives or fees must be tightly tied
to residency of the purchaser, to avoid gaming the system.
Implementing property tax or utility-bill-tied incentives are
one option. Beyond direct incentives, Fort Collins Utilities
could also motivate EV purchase through rate design. The
city is already exploring a time-of-use rate for customers
who charge their EVs at night. Finally, Fort Collins could
reward alternative vehicle owners with favorable parking.
59
Challenge 4: BEVs have a limited range compared to gasoline
or diesel-fueled vehicles.
Perhaps the biggest challenge to BEV adoption is the limited
range of all-electric vehicles. There is a perception that this is a
challenge in general, but especially for infrequent longer trips—
e.g. to the mountains or for a vacation.
Strategy: Find alternative methods of meeting long-range
transportation needs.
Importantly, most daily commutes fall well within the range of
all-electric vehicles (over 90% of commuters travel less than
60 miles round trip to work), limiting the scale of the problem
day-to-day.⁴⁴ Further, more than half of all households have
two or more vehicles—making two-car households perhaps
the best market for EVs today since they would have a non-
BEV available for longer trips. If 50% of these households
were to purchase an EV as one of their vehicles the next
time they went to the dealership, Fort Collins would have
20,000 EVs on the road by 2030, comprising almost 30% of
Fort Collins’ light duty vehicle fleet.
PHEVs offer another solution to the electric vehicle range
problem by offering consumers an electric vehicle for city
driving, but without the range limitations for longer trips.
Bloomberg, McKinsey, and others predict these vehicles will
be cost-competitive by around 2020.⁴⁵
Fort Collins can also build out local charging infrastructure
at workplaces and businesses to both address any range
challenges and build awareness. The City might also
explore partnering with rental and car sharing companies
to streamline or subsidize access to long-range vehicles for
citizens with only a BEV.
SUMMARY
By 2030, Fort Collins could reduce its transportation energy
use by 48% from business as usual, leading to a net benefit of
$480 million in reduced vehicle fuel costs and maintenance for
the community while improving transport options; lessening
congestion; improving local air quality; and creating more
walkable, bikeable, vibrant neighborhoods. The electrification
of Fort Collins’ transportation fleet will drive much deeper
integration of the community’s energy system—creating new
demands on the electricity system but also new capabilities
to support the integration of renewable electricity resources.
Achieving this goal requires, particularly, a consistent, disciplined
drive towards changing perceptions of driving and alternative
transportation throughout the community, and making driving
less and smart growth the norm.
⁴⁴ “TRANSPORTATION ENERGY DATABOOK: EDITION 32,” STACY C. DAVIS, SUSAN W. DIEGEL,
AND ROBERT G. BOUNDY, JULY 2013, OAK RIDGE NATIONAL LABORATORY, FIGURE 8.4.
HTTP://CTA.ORNL.GOV/DATA/DOWNLOAD32.SHTML
⁴⁵ “BATTERY TECHNOLOGY CHARGES AHEAD,” RUSSELL HENSLEY, JOHN NEWMAN, AND
MATT ROGERS, MCKINSEY WEBSITE, ACCESSED 8/19/13. HTTP://WWW.MCKINSEY.COM/
INSIGHTS/ENERGY_RESOURCES_MATERIALS/BATTERY_TECHNOLOGY_CHARGES_AHEAD
SEE ALSO: BNEF 4/17/13 ELECTRIC VEHICLE BATTERY PRICES REACHING NEW LOWS, BNEF
12/3/13 ARE ELECTRIC VEHICLES BECOMING MORE AFFORDABLE?
05: ADVANCED TRANSPORTATION
0
Image courtasy of Shutterstock
06
IMPLICATIONS
STEPPING UP: BENEFITS AND COST OF ACCELERATING FORT
COLLINS' ENERGY AND CLIMATE GOALS
IMPLICATIONS
Efficient buildings, advanced transport, and renewably sourced
electricity are interconnected; meeting each of the sector goals
has reflexive impacts on the other components of Fort Collins’
energy system. By making buildings more efficient, we shrink
demand for electricity. This reduces the expense and effort
required to meet loads with 100% renewables. At the same time,
transitioning cars away from oil and towards electric vehicles
adds demandt back on the electricity system (albeit to a much
smaller degree). Finally, even as buildings and vehicles draw
power from renewables, they can provide demand response and
other modulating services to enable the renewable system to
meet the needs of the community.
Together, the sector assessments presented here indicate
that Fort Collins has the potential to achieve an 80% reduction
(from 2005 levels) in Scope 1 and Scope 2 CO₂ emissions by
2030, essentially speeding its current climate goal by 20 years.
By 2030, this would save 11 million tons more CO₂ emissions
compared to Fort Collins’ existing climate goal and 46 million
tons more CO₂ emissions compared to business as usual.
Achieving this accelerated goal has a net present value savings
of $165 million to 2030 compared to business as usual, and a
$1.8 billion net present value savings by 2050.
Source: “FC GHG and RE Data 2005-2012.xls”; City of Fort Collins, 2012. "Community Greenhouse Gas
Emissions Inventory Quality Management Plan 2005-2011," City of Fort Collins, Environmental Services, October
2012. Available at http://www.fcgov.com/climateprotection/FC GHG Quality Management Plan
2030 Accelerated
Scenario Emissions
NAT GAS
2005 Actual Emissions
0 600 1,200 1,800 2,400
Thousand
Metric Tons
COAL NAT GAS PETROLEUM
2012 Actual Emissions COAL NAT GAS PETROLEUM
80% REDUCTION FROM 2005 LEVELS
PETROLEUM
Figure 1: Fort Collins has the
potential to achieve an 80%
reduction (from 2005 levels)
in Scope 1 and Scope 2 CO₂
emissions by 2030, thereby
accelerating its current climate
goals by 20 years.
COMPARISON OF 2030 ACCELERATED SCENARIO EMISSIONS PROFILE VS. ACTUAL 2005 EMISSIONS
63
Figure 3: In the accelerated scenario, efficiency and renewables meet the majority of future
energy demand. Lingering fossil fuels, (mostly natural gas for building heating, and oil and
natural gas for transportation), account for 30% of the remaining energy consumption, and
all CO₂ emissions. Remaining natural gas generation for electricity is offset by increased
renewable generation.
Building E ciency
Transportation E ciency
Renewable Electricity
0
5
2005 2010 2015 2020 2025 2030
10
15
20
25
Energy Consumption (Trillion BTUs)
E ciency and
renewables
meet 70% of
2030 energy
needs under
accelerated
goals.
Lingering fossil
fuels account
for 30% of 2030
energy needs
Natural Gas Based Building Heating
Fossil-fuel Based Transportation
Fossil-fuel Based Electricity
The accelerated scenario represents a fundamentally
different paradigm for investment in energy-related assets
and infrastructure compared with business as usual, providing
greater local job creation, economic development, and stimulus
for innovation and growth of local businesses. Investments in
energy efficiency and distributed energy resources along the
lines of the path already envisioned for FortZED contribute to the
local economy and reduce cash flows out of the community. By
investing now in efficiency and renewables, the City can reduce
outflows of cash for decades to come.
NETPROFILE PRESENT VALUE OF 2030 ACCELERATED SCENARIO ENERGY SOURCE
ACCELERATED SCENARIO,
2013–2030
NET PRESENT VALUE OF
ACCELERATED SCENARIO,
2013–2050
06: IMPLICATIONS
Net Present Value of Accelerated
Scenario, 2013–2030
Present Value (million 2012$)
Investments
Benefits Net Benefits
Buildings & Electricity Transportation
600
400
500
300
200
100
STEPPING UP: BENEFITS AND COST OF ACCELERATING FORT
COLLINS' ENERGY AND CLIMATE GOALS
At top of mind for many are three outstanding questions:
• What about the remaining 20% carbon emissions?
• What is the role for natural gas in this vision?
• Why can’t we get there by purchasing Renewable Energy
Credits (RECs)?
WHAT ABOUT CARBON EMISSIONS REMAINING AFTER 2030?
Targeting an 80% CO₂ reduction by 2030 puts Fort Collins in a
good position to achieve net carbon neutrality across the sectors
in the years to follow. In our analysis, the lingering 20% emissions
come from end uses that are challenging to wean entirely from
fossil fuels in the near-term for both cost and implementation
reasons. Creating explicit efforts and programs targeting these
end uses will be critical to achieve carbon neutrality in the
following years. By and large, the solution will necessarily come
from a combination of electrification and bio-based sources.
• Natural gas used for industrial process heat: While
some reduction can be made through individual, deep
engagements with industrial energy users in the study
period, some natural gas will linger due to the lack of readily-
available, cost-effective alternatives to producing process
heat. On-going strategies for reduction include integrative
design approaches to these industrial processes, and
potentially fuel switching.
• Natural gas used for building heating and domestic hot
water: This study assumes some efficiency improvement
and some fuel switching for these end uses, but due in part
to the long replacement cycles of heating and hot water
equipment, such replacement will need to continue, timed
with natural replacement cycles. District heating could also
be considered.
• Natural gas used for electricity generation: The accelerated
scenario includes a combined cycle gas turbine, built in
the first few years of the study period to facilitate lessening
Fort Collins’ dependence on coal and integrating variable
renewables. Carbon emissions from this plant are offset by
over-generating renewable energy, but eventually this plant
could be replaced entirely with renewables.
• Oil used for transportation: Despite rapid implementation of
smart growth strategies and customer adoption of efficient
and alternatively fueled vehicles, gasoline and diesel use
will continue beyond 2030 because of the nascent state
of alternatives, complexity of consumer choice, and long
timeframe to fully realize the benefits of smart growth. A
continued push towards adoption of alternative vehicles
beyond 2030 will ultimately reduce this lingering fossil fuel.
WHAT IS THE ROLE OF NATURAL GAS IN THIS VISION?
Natural gas is the subject of ongoing national debate, on one
hand held up as a critical transition fuel and replacement for coal
and oil, and on the other hand, criticized for the environmental,
health, and climate impacts of shale gas hydraulic fracturing.
Proponents cite falling prices, significant domestic shale gas
reserves with the potential to keep prices low, and comparatively
65
low carbon intensity. Opponents cite the environmental and
health risks of improper management in the extraction process,
skepticism that low prices will persist in the long run, and a view
that future price volatility is not only a cost but also a potential
major threat to long-term planning around the resource.
In Fort Collins, natural gas is a convenient option in the short-
term to supply those end uses listed above, which are the
hardest or most expensive to shift to renewables. In electricity,
Platte River’s existing natural gas combustion turbines were
designed to provide peak power, so running them significantly
more is likely cost-prohibitive. On the other hand, new combined
cycle natural gas capacity could be built not primarily to supply
new load but rather to manage the variability of renewable
resources by providing additional flexibility to the system, in
conjunction with more local sources of flexibility.
From a transportation perspective, Fort Collins’ bus fleet runs
on biodiesel and compressed natural gas (CNG) today, and will
soon be converted to all CNG. Natural gas can continue to make
sense as a fuel source for other community fleets (e.g. garbage
trucks, taxis) where economies of scale can be achieved from
centralized fueling stations. For passenger vehicles, though,
electricity is likely to win out.
WHY CAN’T WE GET THERE WITH RENEWABLE ENERGY
CERTIFICATES (RECS)?
When the City adopted its original climate action goals in 2008,
it stipulated RECs should not be counted in the community’s
progress towards its GHG goals. In fact, Fort Collins could meet
the same numerical carbon reduction targets with RECs as would
be achieved by the accelerated goals, and in doing so, support
the demand for clean renewable energy development and
ensure that more certified renewable energy is being generated
to meet the nation’s energy needs. If it chose to, Fort Collins
could even purchase enough RECs to become carbon neutral
tomorrow (as the City of Palo Alto has done), and thereon after
through 2050 and beyond.
However, the cost required to purchase RECs to match the
accelerated carbon reduction path, or to meet and maintain
carbon neutrality, is significant. That money flows out of the
community to support renewable generation elsewhere,
without securing the local innovation, job growth, and other
economic benefits that Fort Collins seeks from investing in
efficiency and renewables locally. Those costs would recur
annually, with no positive returns generated and no long-term
investment in the community itself, resulting in significant
negative net present values through 2030 and 2050. Therefore,
rather than serving a primary role in Fort Collin’s climate strategy,
RECs are likely best used in a support role in the future to help
offset lingering fossil fuels.
NET PRESENT VALUE OF PURCHASING RECS TO… (IN MILLION 2012 $)
Paid Thru
2030
Paid Thru
2050
…match the accelerated goal of achieving a carbon neutral
electricity system by 2030
($348) ($724)
…achieve a carbon neutral electricity system tomorrow ($633) ($993)
06: IMPLICATIONS
0
67
07
MOVING
FORWARD
Image courtasy of Shutterstock
STEPPING UP: BENEFITS AND COST OF ACCELERATING FORT
COLLINS' ENERGY AND CLIMATE GOALS
MOVING FORWARD
FIRST, SET A PUBLIC TARGET
Fort Collins can accelerate its climate goal by twenty years to
achieve a 2030 outcome in which its buildings use 31% less
energy,⁴⁶ its vehicles 48% less energy, and its electricity system
is carbon neutral. While it is essential to further develop an
actionable implementation plan, not every aspect of execution
needs to be vetted before a revised goal is adopted. This year,
through the review process outlined in the “About this Report”
section, the City of Fort Collins should consider the merits of
ratifying the accelerated goal articulated here.
A statement of the City’s commitment would, in itself, play a
major role in enabling acceleration. This commitment is backed
by the significant decision-making power and implementation
capabilities of the community’s municipal utility and power
supply partner. A public target would send a credible signal to
interested stakeholders to engage. For those who are on the
fence, ratification would give a directive to act. A bold public
target would alert the nation that an energy transformation is
underway in Fort Collins, drawing energy leaders, funders, and
researchers to participate.
NEXT, CONCENTRATE ON THREE KEY LEADERSHIP ROLES
The City is poised to lead in three key areas necessary to
achieve an accelerated goal. While all are critical to meeting
2030 targets, the extent to which the City concentrates on each
is likely to evolve as progress is made.
1. Build needed partnerships and coalitions
Multi-stakeholder partnerships are important for all cities
endeavoring to take on aggressive climate targets. With a
2030 acceleration target, Fort Collins needs to create these
partnerships quickly, establishing coalitions that can create and
execute initial implementation plans as early as this year, and that
are structured to nimbly course-correct over the next decade to
ensure programs are meeting the 2030 objective.
The City already has established relationships with private and
public entities committed to reducing Fort Collins’ energy use
and transitioning its electric supply to renewables. Through
its municipal utility, transportation and master planning
responsibilities, and other civic duties, it is in a prime position to
coordinate the efforts of these multiple parties. In particular, the
City could take the lead by:
• Determining the kinds of organizations—and identifying
the specific organizations—that should be coordinated to
orchestrate this energy transformation.
• Partnering with Platte River to create a shared vision for
Fort Collins’ centrally sourced energy supply going forward.
Platte River will continue to be the primary centralized
supplier to Fort Collins, and the community’s climate targets
require Platte River to shift, over time, from being dependent
on fossil fuels to renewables. A successful partnership with
⁴⁶ 39% AFTER ACCOUNTING FOR FUEL SWITCHING
69
Platte River would ensure an increased supply of renewables
and develop approaches to secure the continued financial
health of Platte River, Fort Collins Utilities, and the
community.
• Expanding the existing partnership base already formed
through FortZED to support community wide accelerated
targets, by leveraging the support of stakeholders who are
already committed and mobilized to execute on aggressive
energy goals.
• Identifying common goals and strategies of other local and
regional partners to leverage investment and combined
action.
2. Accelerate customer adoption
Achieving the sector goals presented in this report requires
landmark community adoption rates for energy efficiency
measures in buildings, for solar PV, and for reduced driving
and efficient or electric vehicles. To get a sense of the scale of
adoption required to meet these goals, consider that by 2030,
(1) all residential and commercial buildings will have reduced
energy use by close to 30%, (2) 30%–50% of all commercial and
residential buildings in Fort Collins will have installed solar PV,
and (3) close to 50% of all new car sales will be either efficient
or electric vehicles. Acceleration will require new adoption
initiatives that:
• Send the correct pricing signals to participants: ensure that
price structures motivate adoption while fairly distributing
costs and savings across participating stakeholders.
• Overcome the cost hurdle: provide low-cost financing
options and incentives that can be delivered simply and
equitably to participants.
• Find effective ways to entice high-levels of participation:
appeal to the motivations and decision-making criteria of all
segments of the population.
• Be able to deliver services to meet that increased adoption:
engage with providers to deliver services effectively, and at
a deployment rate that can match increased adoption.
The utility, which already serves a diverse customer base,
can take a leading role in designing and implementing these
initiatives. In fact, Fort Collins Utilities is already exploring new
program options including a set of initiatives that can be piloted
in the FortZED district to drive increased energy efficiency in
buildings and greater adoption of solar PV and other distributed
resources.
3. Coordinate and sequence efforts over time
In addition to its role in creating and communicating clear goals
for the benefit of the community, the City can play a critical
role in tracking and reporting progress toward achieving goals.
This will entail periodic reporting on progress and assessing
the usefulness of programs and initiatives led by the City. For
example, as adoption of efficiency and solar PV increases, Fort
Collins Utilities will need to continue the rollout of smart grid
technologies in order to manage a more distributed energy
system. In other areas, the City’s role may entail greater focus
on coordination with private sector partners to facilitate change.
Taking the lead on coordination can help verify that different
initiatives in and across the three sectors are designed and timed
to meet the accelerated goals.
07: MOVING FORWARD
0
71
08
CONCLUSION
Image courtasy of Google
73
STEPPING UP: BENEFITS AND COST OF ACCELERATING FORT
COLLINS' ENERGY AND CLIMATE GOALS
CONCLUSION
Many cities can point back to the formative moments or events
that shaped where they are today. Perhaps it was when the
local university or factory opened or closed. Or when a nearby
airport was built, or a zoning law passed. Looking back, it’s easy
to see how these events triggered what followed next: an uptick
in population as more people came to study and work, a mass
exodus as real estate prices dropped, or the densification of
downtown. In hindsight, it’s easy to recognize decisive moments
that shape the health and vibrancy of a community and set the
horizon for its growth and prosperity.
Increasingly, cities like Fort Collins are recognizing decisions
they make around energy are integrally tied to the livelihood of
their people. A recent report published by the Carbon Disclosure
Project, "Wealthier, Healthier Cities: How climate change action
is giving us wealthier, healthier cities", includes results from 110
major national and international cities who report that 62% of
climate actions their cities are taking have the potential to attract
new business and economic opportunities. The largest share
of these emission reduction efforts are energy efficiency and
building retrofit activities, followed by a variety of transportation-
related and waste-management initiatives. Among the reporting
cities:
• New York expects its energy efficiency initiatives will lead
directly to new clean-tech ventures in the city;
• Dallas is seeing an inverse relationship between the fall in
greenhouse gas emissions and a rise in green jobs;
• Cleveland views investment in clean energy projects as
a “centerpiece of economic development efforts in
Northeast Ohio.”⁴⁷
Few communities in the nation have the combination of factors
that align to make Fort Collins a community that can lead in
creating forward-looking energy policy for community benefit.
These factors include strong and pragmatic civic leadership,
manageable size, an innovative and well-positioned municipal
utility, workable options for creative transportation policy, and
low cost options for clean and affordable electricity supplies. It
is no surprise that Fort Collins’ innovative energy programs and
policies, notably the FortZED project, have already attracted
national and international attention. By stepping forward to
pioneer new approaches, Fort Collins has galvanized the support
of community leaders and attracted the participation of leading
businesses and other institutions in the area.
Now, the City has an opportunity to sustain and advance its
leadership position by taking up new goals that leverage existing
achievements and opportunities. With bold, decisive action
today, Fort Collins tomorrow will be able to look back and see
a turning point at which it pivoted from a business-as-usual
energy system dependent on fossil fuels to a healthy, vibrant
system that runs on efficiency and renewables, putting itself at
the forefront of innovation nationally—stimulating local economic
development, reducing outflows of money from the community,
improving security, and reducing risk.
⁴⁷ “WEALTHIER, HEALTHIER CITIES: HOW CLIMATE CHANGE ACTION IS GIVING US WEALTHIER,
HEALTHIER CITIES,” CARBON DISCLOSURE PROJECT, 2013. HTTPS://WWW.CDPROJECT.NET/
CDPRESULTS/CDP-CITIES-2013-GLOBAL-REPORT.PDF
08: CONCLUSION
0
100
200
300
400
Net Present Value of Accelerated
Scenario, 2013–2050
Present Value (million 2012$)
Investments
Benefits Net Benefits
Buildings & Electricity Transportation
2000
2500
1500
1000
500
0
500
-330
-205
495
2015
1810
165
Figure 2: While transitioning the electricity system to renewables has a net cost, the net
savings of aggressive building efficiency and advanced transportation improvements bring
the accelerated scenario to a combined net present value of $165 million to 2030. By 2050,
the accrued net present benefit is $1.8 billion.
In the accelerated scenario, the amount of money spent on coal
and natural gas to generate electricity supplied to the community
is lower by an average of nearly $15 million per year compared
with business as usual. Investment in efficiency, distributed solar
power, smart grid, and other local energy assets is higher by $30
million per year. This shift in investment—from distant to local
resources—would generate an additional 400–500 jobs within
Fort Collins over the entire period from 2013–2030.
$27,200
$16,300
$5,000
$26,645
$3,150
Conventional:
Average Midsize
$27,200 $6,900 25
$1,500
$2,850
$3,000
Figure 2: Total cost of ownership for various vehicle options ($), includes purchase and
three years of fuel. Includes state and federal incentives and assumes adequate tax
appetite. Note: Volt and Civic are compact cars while all others depicted are midsize class.
TOTAL COST OF OWNERSHIP FOR VARIOUS VEHICLE TYPES
2030
Accelerated
Scenario
Demand
23
2030 BAU
Demand
45
-48%
Figure 1: This transportation energy reduction potential estimate for Fort Collins is based on a detailed, national-level analysis conducted by Rocky Mountain Institute for Reinventing
Fire.
FORT COLLINS TRANSPORTATION ENERGY REDUCTION POTENTIAL
05: ADVANCED TRANSPORTATION
HTTP://WWW.FCGOV.COM/PLANFORTCOLLINS/PDF/TMP.PDF
transition by aligning pricing and incentive structures with the
community’s goals and by employing new, creative approaches to
accelerating adoption of customer-sited resources.
0
BOS:
Customer
Acquisition,
Permitting,
Interconnection,
Inspection,
Installation
Module
& Inverter
BOS:
Installation
Costs
Current
Total Cost -
U.S. Avg.
BOS:
Finance,
Warranty,
O&M,
Residual
Potential Cost
Installed Cost (Q1 2013 $)
$4.93
$2.21
Cost Components Cost Reduction Opportunities
Source: Bloomberg New Energy Finance. July 2013 Solar Spot Price Index. August 2013; GTM/SEIA Q1 2013 Solar Market Insight; Friedman et al.;
Second Annual Benchmarking Non-Hardware Balance-of-System (Soft) Costs for U.S. Photovoltaic Systems, Using a Bottom-Up Approach and
Installer Survey. NREL. Pre-Release. July 2013; Seel et al. “Why Are Residential PV Prices in Germany So Much Lower Than in the United States?”
LBNL. February 2013.
OPPORTUNITIES FOR REDUCING THE COST OF ROOF-MOUNTED SOLAR PV
23 SEE HTTP://WWW.SOLARABCS.ORG/ FOR MORE INFORMATION.
24 SEE HTTP://WWW.IRECUSA.ORG/WP-CONTENT/UPLOADS/SHARING-SUCCESS-FINAL-
VERSION.PDF FOR MORE INFORMATION.
Figure 6: Installed prices for sub 10 kilowatt rooftop PV systems are being installed in the $2.21/
Wdc range in Germany as of the first quarter of 2013. Over 90% of the cost difference between
the U.S. and Germany is attributable to differences in "soft costs" as depicted above. Achieving
such low costs is possible in the U.S., as evidenced by the Department of Energy's currently
funded competition that awards companies able to install 5,000 new rooftop solar systems for
an average price of $2.00/W or less.
CY WORKING GROUP ON SOCIAL COST OF CARBON, UNITED STATES GOVERNMENT, MAY
2013. HTTP://WWW.WHITEHOUSE.GOV/SITES/DEFAULT/FILES/OMB/INFOREG/SOCIAL_COST_
OF_CARBON_FOR_RIA_2013_UPDATE.PDF
04: RENEWABLE ELEC. SUPPLY
08
09 10
11
12
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
Price
(2011
$/mcf)
Year
EIA
Projec7ons
v.
Actual
U.S.
Average
Wellhead
Natural
Gas
Prices
Sources: Annual Energy Outlooks 1985-1987, 1989-2011 (see http://www.eia.gov/forecasts/aeo/archive.cfm for an archive of reports through 2012.); Early AEO 2012 BEA GDP Implicit Price
Deflator
Operations & Maintenance
Building E ciency Measures
Building E ciency Measures -
Integrative Design
Carbon Cost
19%
2013–2030 ELECTRICITY SYSTEM PRESENT VALUE COST
2013–2050 ELECTRICITY SYSTEM PRESENT VALUE COST
04: RENEWABLE ELEC. SUPPLY
400
500
600
700
800
900
Capacity - MW
Hydro
Coal
Gas - Combustion Turbine
Combined Cycle Gas Turbine
Utility Wind
Distributed PV
Utility PV
Combined Heat and Power
Accelerated Scenario
Building E ciency
Business-As-Usual Building
E ciency
Figure 1: Fort Collins’ accelerated clean electricity pathway (right) reflects 100% net electricity
emissions reduction by 2030. The business-as-usual pathway (left) is a projection of 2005–2012
trends to 2030. Capacity is much higher for the accelerated case due to renewables’ lower
capacity factors relative to fossil-fueled generation sources. Excess renewables are generated
to offset remaining natural gas generation.
2013–2030 ELECTRICITY SYSTEM SUPPLY PORTFOLIO
0.02
0
2012 $/kWh
Residential Commercial Industrial
Electricity Retail CCE
dustrial
0.10
0.08
0.06
0.04
0.02
0
2012 $/kWh
Residential Commercial Industrial
Retail CCE
Figure 2: The average CCE for all conventional efficiency measures, by end use, is significantly
less than the retail rate for both natural gas and electricity in all sectors.
RETAIL RATE FOR ELECTRICITY AND NATURAL GAS
vs. COST OF CONSERVED ENERGY
Deep Industry
Engagement
0.2
Gas Fuel
Switching
1.7
Electricity
Substitution
0.6
2030
Accelerated
Demand
9.5
2030
Demand
with Full
E ciency
Potential
10.7
-31%
-8%
20
10
15
5
0
Part 1
(p.24)
Part 2
(p.24)
Figure 1: This building energy efficiency potential estimate for Fort Collins is based on a detailed, national-level analysis conducted by Rocky Mountain Institute for Reinventing Fire,
which draws from
analysis by National Academies and Lawrence Berkeley National Laboratory. Potential savings from industrial process loads, while not strictly addressing building end use, are also included
in this
potential since they represent a considerable opportunity and also frequently occur in or around buildings.
03: EFFICIENT BUILDINGS
2012 FORT COLLINS BUILDINGS ENERGY EFFICIENCY POTENTIAL
moment, Fort Collins can stay on its current path or it can choose to accelerate its
carbon reduction plan and stand among the world’s leading cities. The community
is uniquely positioned to accelerate its goal, develop a specific implementable plan,
and in doing so, become a replicable model for cities elsewhere, contributing to a
broader energy shift nationally and globally.
reflecting the cost of carbon in planning.
3 ROADMAP TO MOVING TO A LOW-CARBON ECONOMY IN 2050," HTTP://EC.EUROPA.EU/
CLIMA/POLICIES/ROADMAP/INDEX_EN.HTM. ACCESSED 9/12/13.
4 "2-DEGREE GLOBAL WARMING LIMIT IS CALLED A 'PRESCRIPTION FOR DISASTER',"
MARK FISCHETTI, SCIENTIFIC AMERICAN, 12/6/11. HTTP://BLOGS.SCIENTIFICAMERICAN.
COM/OBSERVATIONS/2011/12/06/TWO-DEGREE-GLOBAL-WARMING-LIMIT-IS-CALLED-A-
PRESCRIPTION-FOR-DISASTER/
02: WHY ACCELERATE FORT
COLLINS' CLIMATE GOALS?
annual estimate of $30 million in increased investment in local energy assets, as compared to
business as usual.
Potential Renewable Energy Credits present value costs for the electricity system:
We first estimated the cost of using renewable energy credits (RECs) to match the accelerated
goal of achieving a carbon neutral electricity system by 2030. To estimate that cost, we
calculated how much non-hydro renewable electricity was generated (kWh) in the accelerated
scenario each year relative to the BAU scenario. We then multiplied that value by the price of
RECs (per kWh). We assumed a price of $0.04/kWh, which is a roughly middle-range value
derived from DOE’s Green Power Markets data on National REC Products. We then calculated
the overall present value cost of REC purchases using a 3% discount rate.
infographic.jpg
National cost estimates for additional investments
in infrastructure improvements and other VMT
strategies
Amory Lovins and Rocky Mountain Institute.
2011. Reinventing Fire: Bold Business Solutions
for a New Energy Era. White River Junction,
Vermont: Chelsea Green.
able
22: mid
Data
sources
for
Step
4 22 Highlander 28 27%
Average midsize vehicle
pices and fuel economy
Oak Ridge National Laboratory (ORNL). Transportation Energy Databook 31
http://cta.ornl.gov/data/index.shtml
Purchase price and annual
fuel expenditures for all
other vehicles
U.S. Department of Energy, Energy Efficiency and Renewable Energy website.
5
.
Calculate
the
net
present Accessible
value at
(fueleconomy.NPV)
of
the gov
accelerated
scenario
out
to
2050.
NPV for the transportation sector was calculated by estimating annual cashflows from costs and
savings due to the accelerated transportation strategy over the period 2013–2050. This analysis
includes:
• Cost due to additional infrastructure investment for implementing increased alternative
transportation and other VMT reduction strategies.
• Savings due to avoided fuel purchases/expenditure.
• Savings due to avoided vehicle maintenance and tire wear as a result of driving less.
case. Accessible at
http://www.eia.gov/oiaf/aeo/tablebrowser/#release=AEO2013&subject=0-
AEO2013&table=48-AEO2013®ion=1-0&cases=ref2013-d102312a
% of total miles driven by
vehicles as a function of
vehicle age
Oak Ridge National Laboratory (ORNL). Transportation Energy Databook 31
http://cta.ornl.gov/data/index.shtml
Land
Evidence
Institute.
on
Improving Urban
Development
and
Climate
Change”
multimodal
and
alternative
commuting
options
5 11 15 Sloman the Frank
Way
et.
et.
We
al.
al,
Victoria
Travel”,
“Smarter
Transport
2004;
Choices-‐
Policy -‐Changing
Creating
and Institute. Transportation Accessible http:oc161022586 //www.
Transit
at vtpi.
Demand
Elasticities. org/tdm/
Encyclopedia. tdm12.htm#_T
evolving
intelligent
transportation
systems
4 7 10 Reid 2007.
Ewing
“Growing
et
al.
Cooler:
Urban
The
Land
Evidence
Institute.
on
Urban
Development
and
Climate
Change”
Implementing
pricing
signals
and Total T
he
strategies total potential reduction 25 8 of 36 36% 9 was revised 10 45 downward Frank Institute. Demand http:/
et. /www.
Encyclopedia.
al.
Parking to
Victoria 30% vtpi.as
Pricing. org/a
Transport conservative tdm/
Accessible
Transportation tdm26.
Policy
at measure htm
to temper reduction estimates that may not be additive. Accelerated VMT reductions were
applied linearly to the business-as-usual scenario from 0% to 30% over the period 2013–2030.
2030
accelerated
scenario
for
light
duty
vehicles
(cars
and
light-‐duty
trucks)
reflecting
savings
in
fuel
consumption
and
fuel
mix.
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quation T
able
emissions
18:
Data
2:
Emissionsmode
sources
for
each
for
Step
mode
=
1
(Fuel
was
Consumptionmode)
calculated
using
x
(Emissions
the
equation
factor)
below.
Current energy
consumption, MPG data,
CO2 emissions
City of Fort Collins. 2012. Community Greenhouse Gas Emissions
Inventory Quality Management Plan 2005-2011. Report available at
http://www.fcgov.com/climateprotection/
Population and VMT
projections
City of Fort Collins. 2012. Community Greenhouse Gas Emissions
Inventory Quality Management Plan 2005-2011. Report available at
2
.
Project
a
2030
frozen http:
efficiency //www.fcgov.
and
2030 com/climateprotection/
business-‐as-‐usual
scenario
for
transportation 2
030 frozen efficiency
fuel
consumption is a projection
and of total
fuel transportation
mix,
by
transportation fuel consumption
mode. in the years 2013-
2030 assuming no improved vehicle efficiency after 2012 (vehicle stock MPG were assumed to
remain constant for 2013–2030). Equation 1 and 2 above are used to establish annual fuel
consumption and total emissions, using population and VMT projections provided in the Fort
Collins 2012 Community GHG Report for 2013-2020. Population growth rates and VMT/person
projections for years 2020-2030 were extrapolated as shown in the graph below.
Step
5
Cost of installed solar PV Fort Collins Utilities
BOS Cost Reduction Potential Seel, Joachim, Galen Barbose and Ryan Wiser.
“Why Are Residential PV Prices in Germany So
Much Lower Than in the United States?”
Lawrence Berkeley National Laboratory. 2013.
U.S. Department of Energy. Sunshot Vision Study.
Washington, DC. 2012.
Full costs and benefits of solar PV http://www.greentechmedia.com/articles/read/RMI
-New-Insights-into-the-Real-Value-of-Distributed-
Solar
any hour of the year. This output level is fixed at either the minimum allowable output from
the plant (as set by operational and safety requirements—typically 20–40% of nameplate
capacity), or at the previous hour’s output minus the plant’s ramp rate. For example, if a 450
MW coal plant is operating at 320 MW, and has a ramp rate of ±50 MW/h, its minimum
output in the next hour is 270 MW. (Similarly, its maximum output in the next hour is 370
MW.) Most peaking plants are modeled as having the ability to ramp up their full capacity in
any hour.
Variable generators (such as wind or solar PV) have essentially zero operating cost, so it is
assumed that the grid always takes their power when it is available. These outputs are
Solutions for a New Energy Era. White River Junction, Vermont: Chelsea
Green.
Levelized Cost of Energy
Levelized cost of energy is calculated by summing all of the discounted lifetime costs (of
building and operating an energy source) and then dividing by the lifetime energy generated.
LCOE is provided as a cost per kWh of generation and is a useful metric for comparing the cost
of different sources of generation (which often have different total energy output sizes and
lifetime durations). LCOE values and projections were derived directly from a combination of
data sources.
Table
16:
Data
sources
for
Step
3
of
the
analysis.
LCOE base prices Bloomberg New Energy Finance. 2013. Q1 2013 LCOE Ranges. London.
LCOE projections Energy Information Administration. 2012. Annual Energy Outlook 2011
Amory Lovins and Rocky Mountain Institute. 2011. Reinventing Fire: Bold
Business Solutions for a New Energy Era. White River Junction, Vermont:
Chelsea Green.
White House social cost
of carbon
Interagency Working Group on Social Cost of Carbon, United States
Government, 2013. “Technical Support Document: Technical Update of the
Social Cost of Carbon for Regulatory Impact Analysis – Under Executive
Order 12866.”
http://whitehouse.gov/sites/default/files/omb/informreg/social_cost_of_carb
2015 $1,944 $1,944 $14.39 $6.30
2020 $1,843 $1,843 $14.39 $6.30
2025 $1,760 $1,760 $14.39 $6.30
2030 $1,727 $1,727 $14.39 $6.30
2040 $1,727 $1,727 $14.39 $6.30
2050 $1,727 $1,727 $14.39 $6.30
distributed
rooftop PV
2013 $4,543 $4,543 $32.03 $-
2015 $4,253 $3,420 $29.40 $-
2020 $3,045 $1,310 $23.10 $-
2025 $2,258 $1,258 $19.95 $-
2030 $1,764 $1,206 $16.80 $-
2040 $1,260 $1,154 $13.00 $-
2050 $1,103 $1,103 $12.00 $-
utility PV
2013 $4,200 $4,407 $24.15 $-
2015 $3,644 $2,930 $22.11 $-
2020 $2,594 $1,116 $18.00 $-
2025 $1,943 $1,083 $15.06 $-
2030 $1,523 $1,041 $12.99 $-
2040 $1,082 $991 $10.61 $-
2050 $945 $945 $9.85 $-
hydroelec-
tric power all years 3500-5500 3500-5500 $15.59 $6.24
Table
13:
Cost
data
and
assumptions
for
conventional
generation.
capital
costs
($/kW) fixed O&M
($/kW-y)
variable
O&M
($/MWh)
heat rate
(million
BAU Accelerated BTU/MWh)
gas-CC
2013 $892.50 $892.50 $14.40 $3.00 6870
2015 $892.50 $892.50 $14.40 $3.00 6870
2020 $892.50 $892.50 $14.40 $3.00 6870
2025 $892.50 $892.50 $14.40 $3.00 6870
2030 $892.50 $892.50 $14.40 $3.00 6870
2040 $892.50 $892.50 $14.40 $3.00 6870
2050 $892.50 $892.50 $14.40 $3.00 6870
pulverized
coal
2013 $2,178.75 $2,178.75 $35.28 $1.70 9200
2015 $2,178.75 $2,178.75 $35.28 $1.70 9000
2020 $2,178.75 $2,178.75 $35.28 $1.70 9000
2025 $2,178.75 $2,178.75 $35.28 $1.70 9000
2030 $2,178.75 $2,178.75 $35.28 $1.70 9000
2040 $2,178.75 $2,178.75 $35.28 $1.70 9000
from 2013-2050. As a sensitivity, we ran a White House interagency report’s indicated
possible carbon costs of $39.86/metric tonne, ramping up to $80.83 by 2050.
Chelsea Green. (“Transform” case)
3.
Calculate
the
present
value
cost
of
the
two
scenarios
To create cost estimates for generation technologies between 2013-2050, we used Reinventing
Fire methodology that is based on extensive data from both public and industry sources on
historical, present and projected capital costs, operating costs, and performance characteristics.
Base costs and operating characteristics for each technology were selected based on the
validity of data sources, cost trends, and convergences in the cost estimates. Using historical
empirical data, RMI applied learning curve theory to create cost projections that were calibrated
with other industry projections.
net zero emissions.
• As in the business-as-usual scenario, gas peaking is assumed to remain constant from
its 2012 generation level, but is eliminated in the model in 2018 after the new CCGT
comes online in the model. In reality, the peakers still represent available capacity after
2018, but they are anticipated to be used rarely and to such a small percentage that this
was not considered in our analysis.
• Hydro reflects average generation between 2005-2012 each year to 2030 (at a constant
value).
• Utility PV enters the supply portfolio in 2026 (the year it hits parity on an LCOE basis
with combined cycle gas generation) at 10,000 MWh and then grows 14% per year from
there (based on the Transform electricity scenario in Reinventing Fire). The 2026 date
for parity may be conservative considering it reflects national averages. In June, 2013,
for
Step
1
Annual electricity consumption by category Fort Collins Utilities. 2012. Strategic Intelligence
Management System.
Electricity consumption by source “FC GHG and RE Data 2005-2012.xls”; City of
Fort Collins. 2012. Community Greenhouse Gas
Emissions Inventory Quality Management Plan
2005-2011. Available at
http://www.fcgov.com/climateprotection/;
Utility PV adoption rate Amory Lovins and Rocky Mountain Institute.
2011. Reinventing Fire. White River Junction,
their overall share of PRPA generation).
• Hydro is extrapolated to reflect average generation between 2005-2012 each year to
2030 (at a constant value).
• Utility PV enters the supply portfolio in 2026 (the year it hits parity on an LCOE basis
with combined cycle gas generation) at 10,000 MWh and then grows 8% per year from
there (based on the Maintain electricity scenario in Reinventing Fire).
• Combined heat and power (CHP) starts at 1,000 MWh in 2013 and grows at a rate of
1.9% per year (consistent with population growth).
• Until 2019, coal provides the remainder of generation once all other sources have been
accounted for.
accordingly (see Renewable Electricity Supply chapter appendix).
Table
8:
Data
Sources
for
Step
7
Cost, efficiency, coefficients of
performance, lifetime of off-the-shelf gas
furnaces and air source heat pumps
Manufacturer specifications.
Integrative design savings;
deep industry engagement savings
Amory Lovins and Rocky Mountain Institute.
2011. Reinventing Fire: Bold Business
Solutions for the New Energy Era. White
River Junction, Vermont: Chelsea Green
with capturing all cost-effective efficiency potential between 2013-2030 remained constant for
years 2031-2050. This is consistent with peer-reviewed methodology employed in the buildings
analysis of Reinventing Fire.
6.
Estimate
additional
savings
achievable
through
improved
controls,
behavioral
programs,
integrative
design
interventions,
and
deep
industry
engagements.
RMI’s Reinventing Fire study identified additional efficiency savings beyond the “conventional”
and behavioral measures described in sections 1-5 above. These additional savings categories
include integrative design interventions and deep industry engagements. These savings are not
as well documented as “conventional” savings and have uncertain costs, but they nonetheless
represent a potential source of significant and cost-effective energy savings. Integrative design
savings were taken from Reinventing Fire and represent the savings potential from deep
retrofits of existing buildings and efficient design of new buildings. Industry engagement savings
reflect the savings possible from interventions focused on industrial processes (motors, process
heat, etc.) and were developed based on savings observed in RMI collaboration projects with
industrial clients. Based on analytic considerations in Reinventing Fire like building turn-over
and renovation rates (when deep retrofits are most likely to be cost-effective), we assumed 30%
Customer Energy Efficiency. American
Council for an Energy-Efficient Economy.
Washington, D.C.
Tondro, Merry. 2012. Residential Feedback:
What are the Opportunities for Natural Gas?
Behavior, Energy, and Climate Change
Conference (BECC). Sacramento, CA
6:
Data
Sources
for
Step
4
Behavioral/controls savings
Amory Lovins and Rocky Mountain Institute.
2011. Reinventing Fire: Bold Business
Solutions for the New Energy Era. White
River Junction, Vermont: Chelsea Green;
Dietz, Thomas et al. 2009. Household actions
can provide a behavioral wedge to rapidly
reduce US carbon emissions. National
Academy of Sciences
Friedrich, Katherine et al. 2010. Visible and
Concrete Savings: Case Studies of Effective
Behavioral Approaches to Improving
class
Energy Information Administration. 2011.
(electric utility sales and revenue data 2011;
average retail natural gas prices for Colorado
in 2012)
projected annual consumption out to 2030. We started with electricity growth rate projections
from Fort Collins Utilities and revised them upward by removing the impacts of DSM programs
to create a “frozen efficiency” baseline. Studies indicating cost-effective efficiency savings by
end use (see Step 3) use the Annual Energy Outlook (AEO) reference cases from 2007 and
2008 as the baseline from which they indicate cost effective efficiency savings potentials. To
project energy use with “frozen efficiency” in Fort Collins and maintain a consistent baseline with
the efficiency potential studies we were referencing, we assumed constant energy use per
capita in Fort Collins to 2030. We assumed yearly population growth of 1.9% per year as
indicated by the Community GHG Emission Inventory Quality Management Plan.
Table
4:
Data
sources
for
Step
2
Annual electricity consumption growth rate
City of Fort Collins. 2012. Community
Greenhouse Gas Emissions Inventory Quality
Management Plan 2005-2011. Available at
http://www.fcgov.com/climateprotection/
Corroborated by Energy Information
Administration. 2008. 2009. Annual Energy
Outlook.
Annual gas consumption growth rate (for
2030 Demand with Frozen Efficiency)
Energy Information Administration. 2012.
2013. Annual Energy Outlook.
Study.
Commercial:
Xcel Energy. 2010. Colorado Demand Side
Management Market Potential Assessment.
Natural gas consumption by end use Residential, commercial:
Xcel Energy. 2010. Demand Side Management
End use 45 Gas Commercial Convection Oven Xcel 2010 0.4% 25.5%
End use 46 Gas Commercial Griddle Xcel 2010 1.0% 25.5%
End use 47 Gas Commercial Range Xcel 2010 1.6% 25.5%
End use 48 Gas Commercial Other Xcel 2010 2.0% 16.8%
End use 49 Electricity Industrial HVAC Platte River 2013 15.0% 48.2%
End use 50 Electricity Industrial Motors Platte River 2013 42.6% 40.0%
Commercial,
office
Commercial,
education
Commercial,
government
Commercial,
retail
Commercial,
medical
Commercial,
other
Industrial,
manufacturing
Industrial,
other
Consumption by end use data were gathered from either local or Colorado-wide demand-side
management (DSM) and efficiency potential studies. Data units were percentage of total sector
energy consumption used for each particular end use (e.g. 11% of residential electricity
consumption used for refrigerators). End uses and their associated data source, savings
potential, and contribution to total sector energy use are listed in the table below.
Table
2:
Building
end
uses
examined
in
this
analysis,
and
associated
data
source,
savings
potential,
and
contribution
to
total
sector
energy
use.
End Use # Fuel Sector Name Source
% of sector
consumption
% End Use
Savings
Potential
End use 1 Electricity Residential Clothes Dryer Platte River 2013 3.3% -1.5%
End use 2 Electricity Residential Clothes Washer Platte River 2013 6.1% 50.0%
End use 3 Electricity Residential Cooking Platte River 2013 2.5% 0.1%
End use 4 Electricity Residential Cooling Platte River 2013 10.3% 16.9%
End use 5 Electricity Residential CRT TV Platte River 2013 3.3% 25.0%
End use 6 Electricity Residential Desktop PC Platte River 2013 3.2% 42.4%
End use 7 Electricity Residential Dishwasher Platte River 2013 5.0% 13.3%
End use 8 Electricity Residential Fluorescent Fixture Platte River 2013 1.4% 52.8%
End use 9 Electricity Residential Freezer Platte River 2013 1.5% 28.0%
4. Apply those savings potentials to projected consumption to determine total cost-effective
efficiency potential.
5. Use levelized cost of conserved energy (CCE) and estimated avoided energy consumption
to determine net present value of efficiency from 2013 - 2030 and from 2013 - 2050.
6. Estimate additional savings achievable through improved controls, behavioral programs,
integrative design interventions, and deep industry engagements, based on analysis from
RMI’s Reinventing Fire: Bold Business Solutions for a New Energy Era and RMI’s
experience with deep efficiency engagements with clients in industry and buildings.
7. Incorporate fuel switching and determine its cost.