Settling down with my usual bedtime reading last night – Austin Energy's Annual Report of System Information – two tables caught my attention: the "Fuel Costs" (in total $) table on page 2, and the "Energy By Fuel Type"(in total MWh) table on page 3. Hiding in those tables are some meaningful numbers that refute the current thinking that with natural gas prices so cheap, nothing can possibly be cheaper. A little bit of math shows that renewable energy is an even cheaper option.
Tables From Austin Energy's Annual Report of System Information
It's unfortunate that the charts above didn't compare the fuel costs of different resources on a relative basis, but we can do that by simply dividing the fuel costs by the energy from each fuel to arrive at a $/MWh value for each resource.
Environmental Defense Fund Calculations Based on Above Tables
When I did that, I found that on a $/MWh basis, Austin's purchases of renewable energy in 2009 were still $5/MWh cheaper than gas, saving Austinites money even as natural gas prices were at historic lows. In 2008, when gas prices were higher before the recession, renewable energy was about $54/MWh cheaper. In the Texas grid (ERCOT), renewable energy almost always replaces natural gas in the "generation stack" so this adds up to a savings of about $50 million for Austinites in the last two years.
These calculations don't include the additional cost to the utility of owning & operating the gas plants, which for the renewable energy purchase agreements are wrapped up into the "Fuel Cost" table. Including those values for a more "apples to apples" comparison pushes the price of natural gas up another $5-$6/MWh, further tipping the scales in favor of renewable energy in Austin.
Roger Duncan provided strong leadership during his time at Austin Energy by seeking out the meaning behind seemingly innocuous tables like these. His decisions lead to immediate savings for Austin customer and significant future savings as the cost of fossil fuels continues to increase. Hopefully city leaders will have the foresight to choose a general manager who can look past the bland numbers in annual reports like Roger did to see the real information: even with historic fossil fuel price dips during the worst recession since the Great Depression, renewable energy is still cheaper than fossil fuels.