Xcel Announces Deal to Power Steel Mill with Solar

Xcel Energy has announced an agreement with Lightsource BP and EVRAZ North America to develop a $250-million, 240-MW solar power facility in Pueblo, Colorado. The plant will provide power to the EVRAZ Rocky Mountain Steel facility in Pueblo. Xcel said the plant will be the largest on-site solar facility dedicated to a single company.

The Pueblo steel plant has long been powered by Xcel’s coal-fired Comanche Generating Station. The utility plans to close the two coal units at Comanche in 2022 and 2025, respectively, in each case at least 10 years ahead of schedule. The deal announced Sept. 27 for the solar plant has been discussed for months, and must still be approved by state regulators.

“We’re thrilled to partner with EVRAZ North America and Lightsource BP, two companies committed to creating innovative solutions, while developing new solar energy sources within the state,” said Alice Jackson, president of Xcel Energy Colorado, in a statement. “Working together, we’re benefiting the environment and the local economy by retaining a valued company in southern Colorado.”

“This pioneering partnership with Xcel Energy and Lightsource BP marks a milestone for the development of our new rail mill and will make EVRAZ North America the industry leader in the use of renewable energy to produce the greenest steel and engineered steel products in the world, from rail to rod and bar,” said Skip Herald, president and CEO of EVRAZ North America, in a statement. “This long-term agreement is key to our investment in Colorado’s new sustainable economy.”

“Xcel Energy and EVRAZ North America have been excellent partners for Lightsource BP and we look forward to our continued collaboration as we bring this significant project online,” said Kevin Smith, CEO of the Americas for Lightsource BP. “The project highlights the tremendous potential that Colorado offers for large-scale solar and serves as a creative multi-stakeholder model to meet increasing demand for affordable, clean energy. We’re committed to building on this momentum and replicating this model across the U.S. as we grow our suite of clean energy solutions that boost local economies.”

The project, known as Bighorn Solar, will be financed, built, owned, and operated by Lightsource BP. The company will sell the electricity generated to Xcel under a power purchase agreement.

Xcel has said the project is part of its Colorado Energy Plan, under which the utility plans to deliver 55% renewable energy to the state’s grid by 2026, while reducing carbon emissions by 60% from 2005 levels. The Bighorn project is expected to come online by year-end 2021.

EVRAZ North America is Xcel Energy’s largest retail electric customer in Colorado. EVRAZ and Xcel in 2018 began work on a long-term power contract that gives the steel mill price certainty for its electricity through 2041, though rates have not been made public. The mill employs about 1,000 workers.

Darrell Proctor is a POWER associate editor (@DarrellProctor1, @POWERmagazine).