Xcel Energy has announced its plan to move to 100% carbon-free power generation by 2050, with the utility also saying it will reduce carbon emissions by 80% by 2030, from 2005 levels.
Xcel, headquartered in Minneapolis, Minnesota, serves customers in eight states and over the past two years has announced a significant number of renewable energy projects.
Ben Fowke, Xcel’s chairman, president, and CEO, in announcing the plan on December 4, said, “This is an extraordinary time to work in the energy industry, as we’re providing customers more low-cost clean energy than we could have imagined a decade ago. We’re accelerating our carbon reduction goals because we’re encouraged by advances in technology, motivated by customers who are asking for it and committed to working with partners to make it happen.”
Xcel, which is Colorado’s largest power provider, made the announcement in Denver. The utility said it already has reduced carbon emissions 35% since 2005, as it sought to meet its original goal of a 60% reduction in emissions by 2030.
‘Develop Advanced Technologies’
The utility in a news release said that while it thinks it can hit its new 2030 goal, “achieving the long-term vision of zero-carbon electricity requires technologies that are not cost effective or commercially available today. That is why Xcel Energy is committed to ongoing work to develop advanced technologies while putting the necessary policies in place to achieve this transition.”
Said Fowke: “Our goals are ambitious and achieving them requires a long runway. We’re starting the conversation today to make sure we can achieve this groundbreaking transition while continuing to keep energy affordable and reliable for customers.”
Environmental groups and some Colorado officials praised the utility’s announcement.
“Rapid advances in wind farm technology have cut costs and increased output to the point where zero-carbon wind power is now both cleaner and more affordable than traditional sources,” said Tom Kiernan, CEO of the American Wind Energy Association. “Xcel Energy’s outstanding leadership in large-scale wind power investments will help ensure these ambitious carbon cutting goals can be met while keeping electricity service affordable and reliable for consumers.”
Colorado Governor-elect Jared Polis, a Democrat who has said he wants the state to utilize 100% renewable energy, said, “When I launched my campaign back in 2017 we had a bold agenda for our state to get to 100 percent renewable by 2040. Xcel Energy’s exciting announcement today, along with the strong climate goals communities like Pueblo, Summit County, Fort Collins, Denver and others across the state have embraced, shows we are leading the way forward right here in Colorado—by committing to a renewable and clean energy future.”
More Coal Plants Are Closing
Xcel is just one of many utilities that have recently announced large carbon-reduction plans. The utility in 2015 said it would retire two units at its largest coal-fired power plant, in Becker, Minnesota. Northern Indiana Public Service Company on October 31 said it would retire coal plants early as it adds more renewables to its portfolio. MidAmerican, an Iowa-based utility, has said all of its power generation will come from renewables by 2020.
WEC Energy Group in Wisconsin a year ago said it would close its coal-fired Pleasant Prairie facility. The list of coal plants with announced closures includes units in Texas, Montana, and Kentucky, along with several elsewhere.
Xcel announced its “Colorado Energy Plan” earlier this year, saying it would retire 660 MW of coal-fired generation in the state—two units at its Comanche Generating Station in Pueblo—at least a decade ahead of schedule. Environmentalists praised the plan, but some groups, including the Independence Institute, a conservative public policy organization, said the plan would mean higher electricity costs for consumers. The Colorado Mining Association and some state lawmakers also spoke out against the plan, pointing to lost jobs in the coal industry and saying electricity rates would rise. They also expressed concern about the loss of “dependable coal power.”
A report last month by Lazard, a financial advisory and asset management group, said renewable energy is cheaper than coal-fired power generation. It said an analysis earlier this year showed that Tri-State Generation & Transmission, a membership cooperative which operates in Colorado, would save ratepayers money by moving away from coal, and toward renewables. Tri-State challenged the analysis, but some of its members have said they would like to have access to more sources of renewable energy.
Analysis Shows LCOE Falling for Renewables
Lazard’s annual Levelized Cost of Energy (LCOE) analysis said solar photovoltaic and wind power costs have fallen 88% and 69%, respectively, since 2009. The report says coal and nuclear power generation costs rose 9% and 23%, respectively.
“Xcel Energy’s groundbreaking climate commitment is an act of true leadership,” said Fred Krupp, president of the Environmental Defense Fund. “It is anchored in proven clean energy solutions that are already delivering healthier air, low cost electricity, major economic investments and jobs to local communities.”
Analysts with investment bank Morgan Stanley last year said renewable energy had reached a “tipping point” in terms of economics when compared to traditional fossil fuel-powered generation.
Stephen Byrd, who leads the bank’s coverage of North American power and utilities and clean energy industries, said, “Numerous key markets have reached an inflection point where renewables will have become the cheapest form of new power generation by 2020, a dynamic we see spreading to nearly every country we cover.”
—Darrell Proctor is a POWER associate editor (@DarrellProctor1, @POWERmagazine).