Xcel Energy plans to transform its Colorado grid, boosting renewables and closing coal plants

Energize Weekly, March 3, 2021

Xcel Energy – in one of the country’s most sweeping initiatives to reconfigure a gird – has announced an $8 billion plan to double its renewable energy generation and storage in Colorado, add transmission and close all its coal-fired power plants in the state by 2040.

The plan, to be submitted to the Colorado Public Utilities Commission (PUC) at the end of March, would lead to 80 percent of the electricity supply to Colorado customers coming from renewable sources by 2030 and at the same time cut the utility’s carbon emissions by 85 percent.

Under state climate laws, every regulated utility in the state has to file a clean energy plan with the PUC showing how it will meet the state target of at least an 80 percent reduction in utility carbon emissions from 2005 levels.

“The Clean Energy Plan is going to transform state energy policy in Colorado,” Ben Fowke, Xcel’s CEO, said at a video press conference on the plan. “It provides a blueprint for the nation.”

“Technology is allowing us to do this with affordability and reliability in mind, but we also know our stakeholders want us to do it. They expect use to address climate change,” Fowke said.

Colorado Gov. Jared Polis, who participated in the video conference, said, “Xcel is showing it can be done, this swift transition to renewables.”

While many utilities have announced clean energy plans or the goals of zero carbon emissions, Jon Goldin-Dubois, president of the environmental group Western Resources Advocates, said, “Xcel is actually changing its operations … Other utilities should follow Xcel’s example.”

The Colorado climate change law set a target of an overall 50 percent carbon reduction by 2030 and a 90 percent cut by 2050. Closing coal-fired plants is key to meeting those goals. Xcel’s own goal is carbon-neutral emissions for its electricity by 2050.

Xcel has already announced the closure of three coal-fired units by 2028, and the new plan deals with the remaining three units.

The closure date of one unit at the Hayden plant has been moved up eight years to 2028; the Pawnee Generating Station, in Brush, would be converted to natural gas in 2028; and Comanche 3, in Pueblo, would close in 2040.

The core of the plan is a big buildup of renewable generation and storage with about 5,600 megawatts (MW) of new capacity – including 2,300 MW of wind power, 1,600 MW of large-scale solar projects and 400 MW of battery storage.

Another 1,300 MW of distributed solar, such as community solar gardens, would also be added.

Still, in an effort to diversify the grid and ensure resilience the plan calls for adding 1,600 MW of natural gas generation and storage.

“Customers depend upon the provision of safe reliable electricity every day,” Alice Jackson, president of Xcel-Colorado, said. To assure the viability of the system, Jackson said, “balanced resources, diversified generating capacity and dispatchable resources” are needed.

The problems grid operators faced in meeting electricity demand during February’s winter storms and freezing weather, particularly in Texas, underscore the need for a diversified system, Jackson said.

Xcel said it does not anticipate any layoffs as a result of the plan, relying on a combination of attrition, retirements and retraining.

“It is getting harder and harder to find opportunities for impacted workers,” Rich Meisinger, business manager of IBEW Local 111, which represents Colorado and Wyoming utility industry workers, said during the video conference.

‘You can’t just transfer them to another power plant,” Meisinger said. “The company and the union are working more closely than we ever have.”

Fowke said the utility is also prepared to work with communities whose tax base and economies will suffer with the closure of the coal plants. “We are doubling down on economic development efforts,” he said.

The Clean Energy Plan is at the heart of the Xcel’s electric resource plan (ERP), which the company must submit to the PUC every four years. The ERP forecasts electric demand and how the utility plans to meet it.

The PUC will evaluate the plan, hold hearings and could modify it. Jackson said the process could take until the third quarter of 2022.

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