Tell us again how renewables are too expensive?

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Austin Energy, the municipal utility in Texas, is on a tear.

Last month, they signed a contract for 300 MW of wind energy, for a reported $25-36 MWh.

And now comes news that the utility is signing two contracts for 150 MW of solar, at rates under 5 cents/kWh, fixed for 25 years.

That price is well below the cost of alternative sources of new generation — from the Greentech Media article, Austin Energy estimates new “natural gas at 7 cents, coal at 10 cents and nuclear at 13 cents.”

Tell us again how renewables are too expensive?

Here’s the text of the announcement

Austin City Council Approves New Wind Contract To Reach Renewable Energy Goal Austin, TX (February 27, 2014)

Austin, TX (February 27, 2014) – The Austin City Council approved a new wind energy contract today that positions Austin Energy to achieve its goal of delivering 35% of all of its electricity from renewable sources four years ahead of its goal and making it the leader for all large public power utilities in the country.

The contract with Lincoln Renewable Energy calls for Austin Energy purchasing up to 300 megawatts of wind power for 18 years for $31 million a year. The price for the wind power is in the $26 per megawatt-hour to $36 per megawatt-hour price range, making it the least expensive wind purchase Austin Energy has ever entered into since it began contracting for wind power in the late 1990s. The price is lower than the $32/MWh average cost for all power in the Electric Reliability Council of Texas in 2013 and will not increase customer bills.

The new wind project consisting of 160 wind turbines will be built in Castro County, Texas and is projected to come online in the fourth quarter of 2015. The new project is in addition to two other new projects that Austin Energy entered into contracts with last year to purchase wind power. Those two projects by Duke Energy are 200 MW each and are scheduled to come online in 2015 and 2016, respectively. The 300 MW Castro County project replaces a 170 MW project that was approved last year but did not materialize.

When the three new projects are all online, Austin Energy will have about 1,350 MW of wind power in its portfolio – helping Austin Energy achieve its 35% renewable energy goal in 2016 – four years ahead of schedule. Austin Energy also currently has about 50 MW of solar power and 112 MW of biomass.

“The new wind contract has come at a good time and at a good price to meet our renewable energy goal early,” said Larry Weis, Austin Energy General Manager. “Both persistence and patience have paid off.”

The new wind contracts are the last Austin Energy expects to enter into before 2020 since it has reached its renewable energy goal and will now concentrate its efforts at achieving it solar energy goals – which includes installing 200 MW of solar by 2020 with half of that installed locally.

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