Multi-state utility operator Xcel Energy Inc. plans to keep natural gas in its generation mix as it strives to end coal-fired power in the Upper Midwest by 2030. In the process, it plans to reduce its carbon footprint by 80% within 11 years and achieve zero carbon electricity by 2050, CEO Ben Fowke said during a quarterly earnings conference call on Thursday.
Citing the filing last month of its Upper Midwest Resource Plan, Fowke said Xcel’s approach aims to reduce carbon reductions by retiring its remaining coal units, “substantially growing” renewables and adding more gas-fired firm peaking resources to assure reliability.
To replace the retired coal-fired plants over the next decade, the resource plan calls for adding 4,000 MW of solar and 1,200 MW wind, along with acquiring one gas-fired plant and building a second combined-cycle plant, along with 1,700 MW of peaking capacity.
“The plan is a key stepping stone toward the company achieving its vision to provide customers with 100% carbon-free electricity by 2050,” said Fowke, noting that 30 years from now some of that generation could be powered by renewable natural gas (RNG).
Fowke said he thinks “gas, renewables and an extension of nuclear power make all the sense for being on the path to 100% carbon-free power by 2050.” Gas and renewables at that point “really won’t compete with each other; I think they will support each other.”
Fowke also was asked if he sees a role for gas in a zero carbon environment. “By 2050 unless the [thermal] plants are burning RNG, which is certainly a possibility, you wouldn’t want them on the grid…That is a number of decades away, and I think you need to take early action on how we get off coal and how we maintain reliability and affordability. We’re going to have to work with these technologies to get the last bits of carbon off our system, but for now we need to take early action, and gas is the way to get us there.”
In June Xcel launched its decarbonization plan, “Destination 2050,” committing to having its largest utility in Colorado receive more than half of its generation from renewable sources by 2026. Other major utilities in the West similarly have been pushing decarbonization efforts.
For 2Q2019, Xcel reported $238 million of net income (46 cents/share), compared with $265 million (52 cents) for the same period last year.
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