Xcel Energy sets a zero-carbon electricity target for 2050, with an 80 percent cut in emissions by 2030
Energize Weekly, December 12, 2018
Xcel Energy has set a goal of producing 100 percent “carbon-free” electricity by 2050—making it the first large U.S. utility to set a net-zero carbon standard.
The investor-owned utility, which operates in eight western and midwestern states, has set a target of an 80 percent reduction in carbon emissions, from 2005 levels, by 2030 and zero emissions by 2050.
Ben Fowke, Xcel’s CEO, said the company decided to raise its emission reduction goals—it had already set a target of 60 percent carbon reduction by 2030—after recent scientific studies showed growing risks of climate change.
“We asked what else could we do and in reality we knew we could step up and do more at little or no extra cost,” Fowke said in unveiling the plan in Denver Dec. 4. “This is what we are going to roll out across our eight states.”
In Colorado, Xcel has already won approval from state regulators for a plan to close two coal-fired units with 660 megawatts (MW) of capacity 10 years early and add 1,000 MW of wind, solar and storage.
Bids for filling that 1,000 MW came in at $11 to $18 per MW for wind and $23 to $27 a MW for solar. Solar plus storage was $30 to $32 a MW. The all-in costs for operating the two coal units it plans to close are $31 a MW, according to Xcel.
Xcel has already closed six coal plants with 900 MW of capacity under the 2010 Colorado Clean Air-Clean Jobs Act, which provided incentives for the utility to shutter the units.
Several smaller municipal utilities have set a goal of 100 percent renewable energy by 2030 or 2035. A few, including Burlington, Vt., and Aspen, Colo., have reached it. Xcel, however, is the first investor-owned utility to set a zero-carbon goal.
“If our investors find what we are doing attractive I can guarantee what we are doing will be replicated by every other utility in the United States. That’s how capital markets work,” Fowke said.
Xcel executives say that they do not yet have a road map or the technology today to delivery on the target. “We cannot reach these goals alone,” said Alice Jackson, president of Xcel’s Colorado subsidiary “Technology and regulatory support are key factors.”
“Technology advancement is key to reaching our goals,” Jackson said.
The carbon-neutral goal is also different from the 100 percent renewable goal of Burlington. Xcel will still operate its Monticello and Prairie Island nuclear plants in Minnesota, and Jackson said that the company’s $1 billion, 1,400-MW Comanche 3 unit in Pueblo, Colo., which came on line in 2010, could be a candidate for carbon-capture technology in the future.
On Dec. 6, the Platte River Power Authority, which serves municipalities in northern Colorado, also adopted a zero-carbon target for 2030.