Xcel sets new bar in clean energy efforts

Source: Rod Kuckro, E&E News reporter • Posted: Friday, December 7, 2018

Xcel Energy Inc. is setting an ambitious example for the nation’s electric utilities with its pledge Monday to deliver 100 percent carbon-free electricity to its more than 3.3 million customers by 2050.

The Minneapolis-based company also announced plans to reduce carbon emissions 80 percent by 2030, from 2005 levels, in the eight states it serves — Colorado, Michigan, Minnesota, New Mexico, North Dakota, South Dakota, Texas and Wisconsin.

Its previous goal was to cut carbon emissions 60 percent by 2030.

No other investor-owned electric utility has made a similar set of pledges.

Some have adopted goals of cutting greenhouse gas emissions by 80 percent by 2050, according to data compiled by the Edison Electric Institute, which represents investor-owned utilities.

Xcel has roughly 17,000 megawatts of electric generation, 40 percent of which is already carbon free. The remainder is 37 percent coal and 23 percent natural gas.

“I think Xcel is probably one of larger and more aggressive utilities in adopting such a goal, but it would not surprise me if we find others announce similar targets,” said analyst Paul Patterson of Glenrock Associates.

The Xcel announcement is driven by CEO Ben Fowke, who has been an aggressive advocate of wind energy in particular in his Midwest service territories.

Fowke’s vision has been a long time developing. He spoke at length about it in an interview with E&E News in July 2014.

“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,” Fowke said Monday.

Fowke’s leadership is important as he is vice chairman of EEI and could become chairman next year. That would make him the national voice for utilities on this issue much as the way Duke Energy Corp. CEO Jim Rogers became the chief advocate for the industry and advocated in favor of a cap-and-trade bill to address carbon emissions in 2007.

“This is national leadership,” said Michael Noble, executive director of Fresh Energy, a Midwest clean energy advocacy group.

“New wind and new solar in a vast part of the American geography is lower cost electricity than a fully amortized coal plant. And Ben Fowke is just saying it out loud,” he said.

Utilities are “well positioned to help decarbonizes the electricity supply and start to electrify more and more of the economy” and solve the problem of decreasing demand for electricity, he said.

Xcel cautioned that 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,” the company said.

“By implementing new renewable and carbon-free generation and energy storage technologies at scale, the company can provide the greatest environmental impact at the lowest cost for customers,” the company said. “That clean electricity can then also be used to reduce the environmental footprint of other industries, such as transportation through the use of electric vehicles, for even greater impact.”

“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,” said Fowke.

Andrew Barlow, a spokesman for the Public Utility Commission of Texas, offered a comment yesterday on the state’s regulatory role when it comes to Xcel.

“As Xcel is a fully integrated utility with five plants located in the Southwest Power Pool portion of North Texas,” Barlow said via email, “the PUC will carry out its mission to ensure a balance between healthy utilities and low cost, reliable electricity for ratepayers.”

Xcel’s move was widely hailed.

Fred Krupp, president of Environmental Defense Fund, called it “groundbreaking.” He said Xcel’s vision “will help speed the day when the United States eliminates all such pollution from its power sector, which is necessary to seize the environmental and economic opportunity of powering cars, trucks, homes and businesses with cost-effective, zero-emitting electricity.”

Similarly, Tom Kiernan, CEO of the American Wind Energy Association, noted that “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.”

Noah Long, Western energy director at the Natural Resources Defense Council, said he looks forward “to seeing how other utilities keep up with Xcel’s ambitious target.”