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AE solar contract gets national attention

Tuesday, November 25, 2014 by Mark Richardson

Austin Energy’s deal earlier this year to buy power from a solar farm for 20 years got the attention of The New York Times on Monday. In an article, the paper reported that the cost of generating energy with solar and wind power has fallen to the point that it is almost on par with the cost of generating power with natural gas and coal. Reporter Diane Cardwell noted that the cost of providing renewable energy, previously much more expensive than that from fossil fuels, has dropped precipitously over the past five years and is now competitive in many markets. Austin’s solar farm contract will deliver energy for less than 5 cents a kilowatt-hour, whereas gas and coal come in at an average of 6.1 to 6.6 cents per kwh. The Times quoted Austin Energy’s Khalil Shalabi, the utility’s vice president for energy market operations and resource planning, as saying that the lower cost eliminates one of the two major problems with renewable energy. The other dilemma, Shalabi said, is that solar and wind power can’t be dispatched on demand, a problem that still appears to have no solution. The article also notes that in recent months, Congress has been looking into making the tax treatment of all energy forms more consistent, putting renewables on par with fossil fuels. However, with Republican majorities in both the House and Senate beginning in January, there’s no guarantee that will happen.

 

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