Dive Brief:
- The South Dakota Public Utilities Commission on Jan. 4 asked Xcel Energy to reconsider shuttering its Sherco and King coal-fired power plants, writing that their premature closure “adds to the uncertainty of electric generation resource adequacy in the upper Midwest.”
- The three-unit Sherco plant in Minnesota is closing in stages; Xcel shuttered one unit in December and the final two are scheduled to close in 2026 and 2030. The King plant, also in Minnesota, is slated to retire in 2028. The four units combined could provide almost 2,700 MW.
- An Xcel spokesperson said the utility appreciated the South Dakota PUC’s feedback and “we are in alignment with the commission’s priority to ensure reliability throughout the clean energy transition.” The utility has plans to add more than 4.6 GW of renewables onto its Upper Midwest system by 2032.
Dive Insight:
The Midcontinent Independent System Operator’s territory spans 15 states, including South Dakota, and in December a grid reliability watchdog warned the region faced a heightened risk of insufficient power resources.
MISO faces a projected 4.7 GW shortfall beginning in 2028 “if expected generator retirements occur,” the North American Electric Reliability Corp. concluded in its annual Long-Term Reliability Assessment. South Dakota regulators pointed to the shortfall in their letter to Xcel.
“Such warning demands action such as we are asking for today to prevent these shortfalls,” regulators wrote.
Across MISO, they noted that 103 GW of generation will be shuttered over the next 19 years. About 80% of the expected closures are dispatchable generation, but not all of the replacement capacity will be, they said.
“In addition, there are grave concerns regarding whether replacement generation can be built quickly enough and in large enough quantities to fill in for plants retiring prematurely,” the PUC told Xcel.
As Xcel retires its coal plants, the utility plans to add 2,150 MW of wind and 2,500 MW of solar by 2032, with another 1,100 MW of wind and solar expected beyond that. Those resources will be added in Minnesota, North Dakota, South Dakota, Wisconsin and Michigan.
“While the power generated by these resources is variable, we will complement it with ‘dispatchable’ generation,” Xcel spokesperson Theo Keith said in an email.
Xcel has two nuclear energy plants and also plans to add 1,100 MW of dispatchable generation.
Of the new dispatchable generation, Keith said, “with guidance from our policymakers, we hope to include 800 megawatts of hydrogen-ready combustion turbines. To better connect all of this new generation to the grid and bolster reliability, we plan to construct between 500 and 700 miles of new transmission lines.”
In October, Xcel proposed two route options for the Minnesota Energy Connection, an approximately 175-mile, 345-kV transmission line that will connect with 4,000 MW of new renewable energy and help to replace the Sherco plant.
America’s Power, which represents the coal sector, said that if Xcel reverses its decision to close King and Sherco “it would join utilities in 13 states that have reversed decisions to retire almost 14,000 MW of coal-fired generation. Most of the reversals were the result of concerns about reliability and load growth.”
