Colorado, with vast fossil and renewable energy resources, calls itself an “all of the above” state.
Colorado, richly endowed with both conventional and renewable energy resources, calls itself an “all of the above” state. Its diverse geography and geology include the headwaters of major rivers, winds that have created new wealth on the open plains, and substantial deposits of oil, natural gas, and coal. Home to the tallest peaks of the Rocky Mountains, Colorado has the highest average elevation of any state. Wide plains, already more than half a mile above sea level at the Kansas border, rise to meet the mountains running north-south down Colorado’s center.The majority of Coloradans live where the plains and mountains meet in a region called the Front Range.
Weather fronts can move in from the west across the mountains or from the east across the plains. Temperatures vary widely depending on elevation and have reached records of 114℉ on the plains and 61℉ below zero in the mountains. With its large Front Range cities, Colorado is second only to Arizona among the Rocky Mountain states in population size and density. Six in seven residents live in the metropolitan areas, and much of Colorado’s mountain and plains areas are sparsely populated. Colorado is a winter sports destination, and about 1 in 20 houses is occupied only seasonally.
Colorado’s economy is highly diversified. Major industries include aerospace and defense; research and sciences; electronics and advanced manufacturing; agriculture; tourism and outdoor recreation; financial services; and food and beverage manufacturing. Per capita energy consumption is below the national average.Industry is the leading energy-consuming sector, followed closely by the transportation sector.
Colorado was the first state with a voter-approved renewable portfolio standard.
Clean energy is considered a key industry in Colorado. In 2004, Colorado became the first state with a voter-approved renewable portfolio standard (RPS). The legislature has increased requirements several times since, and the RPS now requires 30% of electricity sold by investor-owned utilities to come from renewable energy sources by 2020, with 3% from distributed generation. Separate requirements apply to municipal and cooperative electricity suppliers depending on their size. The RPS and other state support for the efficiency and renewable energy industries have attracted private investment and have made Colorado a clean energy industry leader.
Colorado has significant wind resources on its eastern plains and mountain crests, and the state has substantial solar resources, especially in the south near the New Mexico border. In 2015, wind turbines accounted for three-fourths of all renewable electricity generation, followed by hydroelectric facilities that contributed about one-sixth. Colorado’s largest utility has led the nation for more than a decade in wind capacity and had about 2,500 megawatts of wind operating in the state in 2015. Overall, all turbine operators in the state had nearly 3,000 megawatts of wind capacity installed by early 2016, making Colorado 10th nationwide in wind power generating capacity.
The federal government has identified four Colorado areas that are potentially suitable for utility-scale solar development. In 2015, Colorado was among the top dozen states in installed solar capacity and eighth in the nation in solar electricity generation. Nearly three-fifths of the state’s solar generation came from distributed facilities. Colorado offers rebates to encourage homeowners and businesses to install solar panels, including solar gardens—collections of panels shared by several homes. State electric utilities are also investing in larger scale solar projects. Planning is under way for transmission expansions to bring utility-scale renewable electricity both to Colorado population centers and to cities in other western states. Small-scale applications of renewable technologies such as wind power, solar energy, and methane recovery are used in several industries, including breweries.
There are about 60 small hydroelectric generators in Colorado’s mountainous western region. The state is encouraging development of small-scale hydropower projects that have minimal environmental impact, including turbines on irrigation lines. Colorado negotiated a pioneering agreement with the U.S. Federal Energy Regulatory Commission to speed the permitting process for low-impact hydropower facilities. Colorado’s first commercial-scale woody biomass plant, which burns waste gathered from surrounding forests, consumes trees culled as part of efforts to fight pine beetle infestations. Other biomass projects are in development. Colorado has a number of hot springs, and studies indicate that the state has significant geothermal potential. Some federal lands have been leased for geothermal projects in Colorado.
Coal and natural gas are the primary fuels used to generate electricity in Colorado. Coal-fired power plants provide about three-fifths of net generation, and natural gas provides more than one-fifth. Electricity from renewable sources has tripled since 2007, to more than one-sixth of net electricity generation in 2015, almost all because of increased wind generation. Colorado’s largest utility has committed to replace some older coal-fired capacity with natural gas and renewable generation sources and is pursuing additional options for variable pricing, large-scale storage, efficiency, and distributed (customer-sited, small-scale) energy.
Colorado does not have any nuclear power plants, but it does have some uranium deposits. Projects for both mining and processing uranium ore are in development in the state. No uranium was mined in Colorado in 2015. A proposed uranium mill in western Colorado is permitted and licensed, but plans to build it have been put on hold because of uranium market conditions.
Colorado uses less electricity per capita than three-fourths of the states. The commercial sector is the largest consumer of electricity, followed by the residential sector and the industrial sector. Only one in five Colorado households uses electricity as the main home heating source. Typically, total electricity consumption slightly exceeds in-state generation, and the state is connected by high-voltage transmission lines to Wyoming, Nebraska, New Mexico, Utah, and Kansas.
Colorado is among the major natural gas-producing states in the nation, and state output has doubled since 2001. Historically, the San Juan Basin, which extends into New Mexico, was Colorado’s largest natural gas-producing region, but, since 2000, production has grown in the Denver-Julesberg Basin in the northeast and in the Piceance Basin in the west. Recently, as natural gas prices have declined, some well drilling activity has moved from the Piceance, which produces mainly dry natural gas, to the Denver-Julesberg Basin, which also produces crude oil and natural gas liquids. The state has substantial proved natural gas reserves, and 11 of the nation’s 100 largest natural gas fields are located wholly or partly in Colorado.
Production of coalbed methane from coal seams grew rapidly in the 1990s and typically accounted for about one-third of Colorado’s total natural gas production. Recent declining natural gas prices have rendered some coalbed methane wells uneconomic, and production of coalbed methane fell to less than one-fourth of Colorado’s gross withdrawals of natural gas in 2015. Colorado, New Mexico, and Wyoming are the leading coalbed methane producers in the United States, and Colorado has more than one-third of U.S. proved coalbed methane reserves, more than any other state. Nearly all coalbed methane is produced in the San Juan and Raton Basins.
Colorado has two natural gas trading hubs, Cheyenne in the northeast and White River in the west.
The residential sector is Colorado’s largest consumer of natural gas. Nearly three-fourths of households in the state use natural gas as their primary home heating source. Consumption of natural gas for electricity generation rose during the last decade, and electric power is Colorado’s second-largest natural gas-consuming sector. However, the state uses only about one-fourth of the natural gas it produces.
Colorado is crossed by major interstate pipelines shipping natural gas to markets in the West and Midwest. The state has two natural gas trading hubs at interstate pipeline interconnections. The larger Cheyenne hub is located in the Denver-Julesberg Basin, and the White River hub is located in the Piceance Basin. Colorado has had a relatively small amount of underground storage capacity. Recently, more storage has opened, mainly around the Cheyenne hub, to accommodate seasonal fluctuations in natural gas demand.
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