With its multi-state utility operations centered in geographical areas undergoing big pushes for renewable energy and conservation programs, Minnesota-based Xcel Energy will be deemphasizing the use of natural gas and coal to fuel its power fleet, according to CEO Dick Kelly, who spoke last Tuesday at the Merrill Lynch Power and Gas Leaders Conference in New York City. As a result, Xcel also will be adding to its $2.4 billion high-voltage electric transmission system.
From an existing request for proposals (RFP) outstanding, Xcel hopes to have a “package” of several new wind power deals to submit to the Minnesota Public Service Commission later this year, Kelly said, and it hopes to increase its wind project ownership from that RFP.
Fast forwarding from its end-of-2007 totals, Xcel expects to have 24% of its power supplies come from renewable sources by 2020, relying less on coal and natural gas. “Not only will we reduce our amount of carbon, but we will reduce the amount of natural gas we use on an energy basis,” Kelly said. “It makes us very unique, and again it offers our customers not only cleaner energy but a hedge against fuel prices.”
Kelly spent most of his time on a panel discussion with Wisconsin Energy’s CFO talking about Xcel’s plans to boost its already sizable renewable portfolio that is heavy on wind-generated supplies — particularly in Minnesota and Colorado where it has purchased a lot of power from new wind farms.
As the nation’s leading distribution utility supplier of wind-generated supplies, Xcel at the end of last year had 2,700 MW in its portfolio in wind, and in Minnesota alone the company wants to add about 2,600 MW of wind by 2020. The utility holding company wants to own at least half of its wind projects going forward.
Although not in the Southwest sun belt, Xcel’s Colorado operations are eyeing a lot of future solar, Kelly said. During the question-and-answer period the CEO was pressed on why he thinks solar is a good bet, but some of his colleagues in the utility industry are hanging back as far as investing heavily in the solar sector. He said Xcel’s proportion of solar in its renewable mix will almost double in the next year and will reach 63 MW by 2016.
“I am not sure what is holding [other utilities back] other than price,” he said. “I’m a big proponent of solar for a couple of reasons — we’re in Colorado where there are 320 days of sun annually, and solar coincides more with our peaks than wind does. In Colorado, the wind blows much more at night, so solar is a much better fit for our system.
“Costs are coming down and it is much easier to come up with storage for solar, as opposed to wind. So I am a big proponent of solar, and we’ll push it at Xcel.”
Solar and wind installations generally are located remote from the load centers, and this means Xcel can expand its already large regional transmission assets, which collectively represent the third largest transmission system owned by a private-sector utility in the nation.
“Obviously, if you like renewable energy, you have to love transmission, and we do at Xcel Energy,” he said. “This is one of our growth engines.”
©Copyright 2008Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.
© 2020 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |