Clean energy groups, Xcel Energy battle over future of Minnesota coal facility

Dive Brief:

A group of clean energy groups say Xcel Energy's integrated resource plan for Minnesota should have called for closing down two generating units Sherco coal facility, finding the cost of shuttering the facility does not justify the additional emissions.
Xcel earlier this year filed a plan which called for more than 3,500 MW of renewables, 1,750 MW of gas peaking resources and the continued operation of Sherco through at least 2030. In 2013, regulators unanimously asked the utility to consider shuttering units 1 and 2 at the coal plant, Minnesota's largest.
The clean energy groups, which include Wind on the Wires and Sierra Club, told state regulators that claims the coal units can continue to operate while Xcel achieves emissions reductions are “false and based on unreasonable assumptions.”

Dive Insight:

Xcel's IRP calls for reducing carbon emissions by 40% and delivering 63% carbon-free energy by 2030, but clean energy groups say the company won't be able to achieve that without shutting down the Sherco coal facility.

The groups, including Fresh Energy, the Izaak Walton League of America, Wind on the Wires, the Sierra Club, and the Minnesota Center for Environmental Advocacy filed a “Clean Energy Plan” with the Minnesota Public Utilities Commission that argued “is that there is no economic justification for continued operation of Sherco Units 1 and 2.”

According to the groups, the cost differences between retirement and continued operation “are simply too slight to provide a sound basis for decision. Xcel proposes to continue to operate Sherco 1 and 2 through the entire planning period, taking a business-as-usual approach.”

The argue that continuing to operate the plans will commit the company, ratepayers, and the state to “millions of dollars of expense in maintaining and operating last century’s technology.”

While Xcel did propose to continue operating the facility through 2030, the company also plans to add 1,800 MW of wind power, 1,700 MW of utility-scale solar, and 1,750 MW of gas peaking. It would also operate baseload nuclear facilities through 2030.

Xcel told regulators that by adding renewables the utility would be able to reduce CO2 emissions by approximately 30% by 2020 and 40% by 2030, “and, at the same time, continue using our existing, cost-effective thermal generation.”

“This is an innovative solution that can provide benefits to our customers and the environment while positioning us to be responsive to the state’s greenhouse gas reduction goals and federal greenhouse gas rules, should they solidify during the planning period,” Xcel said.

Continuing to operate Sherco Units 1 and 2 will give customers “the benefit of their investment” while still achieving emissions reductions.

The clean energy groups proposed retiring Sherco Unit 1 in 2021 and Unit 2 in 2024. The plan call sfor increasing Xcel's efficiency by 0.2% annually, adding 2,500 MW of wind resources, 1,700 MW of solar and 1,300 MW of gas peaking.