Xcel Energy looks to wind power as a Clean Power Plan compliance
Xcel Energy recently
said it plans to call for $6 billion in wind and solar energy investment as
part of what it says will be Minnesota’s most cost-effective way to comply with
the Clean Power Plan, the nation’s first ever carbon emission reduction rule
for existing power plants.
“We think it is a good business plan, period,” said Laura
McCarten, a regional vice president for the Minneapolis-based utility. McCarten
also said, according to reporting by Minnesota Star Tribune’s David
“Xcel’s analysis of
the strategy, which speeds up wind and solar investment in this decade, shows
it to be a cost-effective way to reduce greenhouse gas emissions by 60 percent
by 2030 — likely beyond Minnesota’s requirements under the Clean Power Plan.”
Xcel Energy’s statement about using wind energy and solar as the
most cost-effective way to comply with the Clean Power Plan (CPP) comes as new analysis shows
Congress helped add a “bridge” to the CPP’s compliance years, according to the Rhodium Group, by passing a multi-year extension of the
Production Tax Credit (PTC) late last year. The long term policy certainty and
wind power’s 66 percent drop in costs over the last six years makes wind energy
one of the “technologies of choice for the entire CPP compliance period” and
“the tax extenders allow states to meet pending carbon dioxide regulations
almost exclusively with zero-emitting renewables,” according to Rhodium.
Xcel Energy clearly recognizes the value in today’s historically
low wind prices, which are being driven in part by the recent extension of the
PTC. In the company’s preferred plan for the next 15 years, which is currently
pending before the Minnesota Public Utilities Commission, they propose adding
an additional 1,800 megawatts (MW) of wind by 2030, 800 MW of which are slated
to be added by 2020. Procuring these resources in the near-term will allow Xcel
to capture the full tax benefits of the PTC, translating to even greater
savings for their customers. Xcel notes in their filings
that the recent extension of the PTC and ITC will reduce the cost of their plan
by $202 million.
Xcel Energy’s decision
to use renewable energy as the most cost-effective way to comply isn’t
surprising, given the utility will reportedly invest $3 billion in wind energy
in its Minnesota region by 2030 and its recent history of promoting wind energy
as being one of the lowest-cost, reliable options to build a less
carbon-intensive energy mix.
This article was written as a Guest Blog Post for the American Wind Energy Association's "Into the Wind" blog.