In response to Xcel Energy’s long range plan, Clean Energy Organizations file a five-year plan with greater emissions reductions and less dependence on new natural gas “peaker” plants.
With submission of its 2024 Integrated Resource Plan (IRP) to the Minnesota Public Utilities Commission this past winter, Xcel Energy is making strides toward a cleaner, more flexible energy system. However, extensive modeling and evaluation by Clean Grid Alliance, Fresh Energy, Minnesota Center for Environmental Advocacy, and Sierra Club (collectively the Clean Energy Organizations or CEOs) has found that elements of Xcel’s plan should be changed, particularly adding 2,244 megawatts (MW) of new “peaking” natural gas plants to its already significant gas fleet by 2030.
In Xcel Energy’s 2019 IRP, the utility included retirement of all of its coal plants by 2030 — a decision applauded by the CEOs. Xcel’s 2024 plan builds on that commitment to decarbonization by adding approximately 4,700 MW of renewables to the grid, 1,700 MW of demand-side management including energy efficiency and demand response, and 600 MW of battery storage between 2026 and 2030. This is an objectively ambitious plan, and the CEOs appreciate Xcel’s efforts but strongly urge the utility to adopt a plan that depends less on building new natural gas “peaker” plants while also leveraging existing resources and building new renewables and storage.
On August 9, 2024, the CEOs filed a Five Year Action Plan for Xcel Energy’s 2024 Integrated Resource Plan at the Minnesota Public Utilities Commission. The CEO’s Five Year Action Plan, based on extensive research, modeling, and evaluation, concluded that Xcel Energy does not need six new gas peaker plants to meet demand and reliability needs as it transitions away from coal. Instead, CEOs found that the utility can leverage existing resources within Minnesota and the region, while adding more renewable energy and storage to meet its goals for a reliable, cost-effective, and clean energy future.
The CEOs’ plan builds on Xcel Energy’s existing portfolio, extending agreements with three existing plants and adding more battery storage instead of building new gas plants, resulting in a cost-effective and reliable plan that is more closely aligned with climate science and Minnesota policy. The CEO Action Plan also recommends that Xcel add between 3,800-4,800 MW of wind, 400 MW of solar, and 800-1,200 MW of energy storage resources by 2030.
The CEOs also gave close consideration to equity in Xcel Energy’s IRP and appreciate the work on equity and access in the utility’s 2021 plan, which led to concrete outcomes including the Automatic Bill Credit Pilot Petition filed by Xcel Energy earlier this year. The CEOs urge the utility to continue focusing on how its resource plan can benefit everyone through targeting energy efficiency efforts toward low-income communities, advancing workforce opportunities within the clean energy economy, growing workforce diversity, and meeting Justice40 goals through ensuring disadvantaged communities in Minnesota benefit equally from modern energy investments.
Both the state of Minnesota and the U.S. government have committed to achieving net zero carbon emissions by 2050 and Xcel Energy has its own corporate goal of providing entirely carbon-free power by 2050. Xcel Energy’s plan for constructing six new peaker gas plants conflicts with existing federal climate goals for 2050 and its own corporate goal.
Regulatory filings and hearings on Xcel’s IRP will continue throughout this year and next. The CEOs anticipate the Commission will make a decision on Xcel’s IRP in winter of 2025.
“Xcel Energy is setting the pace for utilities around the country when it comes to its approach to decarbonization,” said Allen Gleckner, executive lead, policy and programs at Fresh Energy. “To ensure the utility stays on the path to a decarbonized clean energy future, it is crucial the utility does not over invest in new peaking natural gas plants. With extensive modeling, the CEOs were able to put forward a plan for a reliable, cost-effective, and clean energy future by depending less on new natural gas “peaker” plants and instead maximizing existing resources and building new renewables and storage.”
“Xcel’s resource plan presents an exciting question–what comes after coal? We are thrilled Xcel is continuing its commitment to retire its coal plants in the timeframe we need to address climate change,” said Amelia Vohs, Climate Director at Minnesota Center for Environmental Advocacy. “However, adding a significant amount of new gas adds emissions and erodes the utility’s climate progress. That’s why our groups have proposed an alternate plan that allows Xcel to provide safe, reliable, affordable service, that also aligns with the changes we need to make for the climate.”
“Clean Grid Alliance appreciates Xcel’s continued commitment to reducing carbon emissions and investing in cost effective clean energy resources like wind, solar and battery storage. With the forthcoming large load additions and system-wide electrification, now is the time to move even faster to build out our carbon free resources,” said Peder Mewis, Regional Policy Director with Clean Grid Alliance. “We look forward to continuing to work with Xcel to ensure they can cost effectively achieve their carbon free goals while maintaining reliability of the system.”
“Xcel Energy’s plan to construct six new methane gas peaker plants poses significant environmental and public health risks, especially for communities already burdened by pollution and climate impacts. Peaker plants are inherently more polluting than regular gas plants, emitting higher levels of NOx, CO2, and particulate matter due to their inefficiency and frequent start-ups, which exacerbate disproportionate adverse health effects. Prioritizing renewable energy and storage solutions is essential to protect vulnerable communities, promote equity in our energy system, and ensure a healthier, more sustainable future for all Minnesotans. It’s time for Xcel to fully commit to a clean energy transition that benefits everyone, not just the status quo,” said Patty O’Keefe, Campaign Strategist with the Sierra Club.