Facing increased need for power generation, Austin Energy continues to work on climate plan

Austin Energy is working with a variety of community representatives to inform new power generation goals targeting 2035. The city adopted its 2030 plan about five years ago but a number of factors have changed, including increases in peak demand.

The utility is still committed to being carbon-free by 2035 and will leverage the work done by the utility commission’s 2030 work group, Austin Energy deputy general manager and COO Lisa Martin told City Council, meeting as the Austin Energy Utility Oversight Committee, on Tuesday. She explained that the utility is working through different scenarios and pinpointing values that are important to the community in support of the Resource, Generation and Climate Protection Plan, so named to emphasize the city’s commitment to protecting the environment.

Gov. Greg Abbott, Tesla CEO Elon Musk, the Electric Reliability Council of Texas and environmental groups all agree that electricity demand is growing, which University of Texas professor Michael Webber, leader of the Webber Energy Group, pointed out during the meeting. Austin Energy needs to prepare for an era of unprecedented growth in utility demand, he said. According to Webber, Austin Energy is 10 to 15 years into a 30- to 40-year transition.

Webber noted that in 2023, Austin Energy served 541,368 customers and earned $1.5 billion in revenue. The utility’s approved budget is more than $1.7 billion. Energy transition is occurring not only in Austin but throughout the United States with a variety of researchers looking at how to decarbonize not only the Texas economy, but also the economies of the United States and the world, Webber said. Within the next decade, Austin Energy and other electric utilities will face the huge challenge of providing power to thousands of electric vehicles as well as energy-intensive data centers. For example, UT recently announced that the Texas Advanced Computing Center had been chosen to receive $457 million for construction of the Leadership Class Computing Facility. The facility will be one of many data centers using huge amounts of energy.

A variety of studies have concluded that it is cheaper, faster and more equitable for Austin Energy to be “net-zero,” or carbon neutral, than to be carbon-free, which means to completely eliminate emissions. Austin Energy gets 35 percent of its power from wind, 24 percent from a nuclear power plant, 14 percent each from solar and natural gas, and 11 percent from coal.

Austin has already committed to stopping its use of the Fayette Power Project, a coal-burning power plant owned by Austin Energy and the Lower Colorado River Authority. The Environmental Protection Agency expects Fayette to close or make significant changes by 2032. The city has committed to stop using it three years earlier than that. When Webber suggested that there were cheaper and easier ways to become carbon neutral, Mayor Pro Tem Leslie Pool, who chairs the committee, reiterated the city’s commitment to leaving Fayette.

Webber noted that Austin Energy has already prioritized efficiency. The next step is the electrification of home heating and stoves and encouraging the electrification of light-duty vehicles. He noted that air pollution in Austin comes primarily from tailpipes, so the best way to eliminate the majority of pollution is to encourage people to buy electric vehicles. When the number of those cars reaches a significant level, Austin Energy will need to figure out how to spread the energy load across time. If many people come home after work and plug in at 6 p.m., for example, that would put a strain on the utility’s resources. If not managed, Webber said, electric vehicle charging will account for nearly half of the utility’s load.

Webber said the utility should expedite finding a variety of supply and demand options to ensure that the utility does not face price volatility and transmission congestion fees. He said he would encourage the utility to look at more use of solar power in its service area, focusing on commercial locations such as parking lots and warehouses.

Austin Energy has the opportunity to improve overall performance and lower costs for customers but must consider the trade-offs between a variety of advantages and disadvantages, he said.

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