Tuesday, March 26, 2019

Xcel Pledges to Go 100% Carbon Free

By Hudson Sangree

Xcel Energy committed last week to providing its customers with carbon-free energy by 2050, becoming the first large investor-owned utility to make such a pledge.

The company also said it would cut its carbon emissions 80% by 2030.

“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,” Xcel CEO Ben Fowke said in a news release. “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 says its transition to 100% carbon-free power will be aided by its “advantaged geography,” noting that wind resources in its territory have a lower levelized cost of electricity than fossil fuels. | Xcel Energy, National Renewable Energy Laboratory

Another likely motivation is that Xcel has faced dissent from some of its service areas. Boulder, Colo., is attempting to condemn the utility’s assets and create a municipal utility, with the goal of providing residents with all-renewable energy by 2030.

On Dec. 6, the same day that Xcel made its clean-energy announcement, the Boulder City Council authorized city staff to proceed with the acquisition of Xcel’s assets.

“This process will allow the city to determine a price for the assets prior to the community decision on Local Power, currently scheduled for November 2020,” the city said. It scheduled a meeting Dec. 13 to discuss its plans.

A joint application to separate Xcel’s assets in Boulder is pending before the Colorado Public Utilities Commission.

Xcel’s commitment to carbon-free energy allows its two nuclear plants in Minnesota to be part of the mix. Boulder’s pursuit of 100% renewable energy would not.

The company, which has 17,000 MW of generation, says it has reduced its emissions by 35% since 2005. About 40% of its electricity currently comes from carbon-free sources, led by wind (21%), nuclear (13%) and solar (2%). Coal is responsible for 37% and natural gas provides 23%.

Headquartered in Minneapolis, Xcel serves 3.6 million customers in eight Western and Midwestern states: Colorado, Michigan, Minnesota, New Mexico, North Dakota, South Dakota, Texas and Wisconsin.

In a presentation to investors in New York last week, the company touted its “advantaged geography” for making a “cost-effective clean energy transition,” noting that wind resources in its territory have a lower levelized cost of electricity than fossil fuels. It has targeted 4,400 MW of coal capacity for retirement and plans to add 3,550 MW of additional wind capacity by 2021.

In total, the company says it will need to invest $20 billion to $30 billion to add 12 to 18 GW of wind, solar, storage and natural gas capacity.

Investors appeared unperturbed by the company’s plans. Xcel shares closed Friday at $53.19, up 33 cents (0.6%) from its price before the announcement.