Trump Desperate to Shore up Fossil Fuels. Too Late.

December 5, 2018

turbines1218

Despite Republican efforts to hold back the clean energy tide, it keeps rising.

Xcel Energy:

Denver, Colorado (Dec. 4, 2018)—Xcel Energy, a national leader in renewable energy, rolled out a clean energy vision today in Denver that will deliver 100 percent carbon-free electricity to customers by 2050. As part of this vision, the company also announced plans to reduce carbon emissions 80 percent by 2030, from 2005 levels in the eight states it serves. The new goals are the most ambitious announced to date within the electric power industry.

Denver Post:

Xcel Energy, Colorado’s largest electric utility, is upping its renewables game with the announcement Tuesday that it has a goal of being 100-percent carbon free by 2050.

The Minneapolis-based company that serves eight states has been a leader in the quest to increase the use of renewable energy sources, said Ben Fowke, the utility’s chairman, president and CEO.

“This isn’t new to us. We’ve been leading the clean-energy transition at Xcel for quite a while now. Investing in renewables has really been part of our DNA for over 20 years now,” Fowke said at a news conference for the announcement Tuesday at the Denver Museum of Nature and Science.

The move to more wind, solar and other renewable energy sources is not only good for the environment but also good for the bottom line of both the company and its customers, Fowke added.

“That has allowed us to reduce our carbon footprint by 35 percent across all our eight states since 2005,” Fowke said.

Xcel Energy already had a goal of reducing carbon dioxide emissions by nearly 60 percent and increasing its use of renewable energy sources to 55 percent of its mix by 2026 as part of its Colorado Energy Plan, which was approved by state regulators in August. The new plan includes a goal of reducing carbon emissions by 80 percent by 2030 across eight states and getting to zero emissions of the greenhouse gas by 2050.

Fowke and Alice Jackson, president of Xcel’s Colorado operation, said they don’t know of any other utility in the country that has set a goal and timeline for producing no carbon emissions.

Dave Roberts in Vox:

Xcel, based in Minneapolis, serves 3.6 million customers across eight states — Michigan, Minnesota, New Mexico, North Dakota, South Dakota, Texas, and Wisconsin. Its CEO, Ben Fowke, is part of the leadership at the Edison Electric Institute, the main utility trade group.

It is the first major US utility to pledge to go completely carbon-free. So make no mistake: This is industry-shaking news. Let’s look at why.

Xcel is getting more ambitious because it’s in its political and economic interests to do so

Xcel has been a leader on clean energy for a while. According to the company, it has reduced its carbon emissions by 35 percent since 2005.

Earlier this year, it announced its intention to reduce carbon emissions 60 percent (from 2005 levels), increase the level of renewable energy in its fleet to 55 percent, and shut down 50 percent of its coal capacity by 2030 — in the state of Colorado. Those goals were enough to win the company Utility Dive’s Utility of the Year Award for 2018.

But the new goals go much further, and they cover Xcel’s entire eight-state territory.

So what pushed the company’s ambition even higher?

First, renewables are getting really cheap. In its recent solicitations, Xcel is getting more bids for renewables, with more variety, for much cheaper. Wind and solar plants paired with storage are bidding in cheaper than the ongoing operating costs of existing coal plants. Renewables are even giving natural gas a run for its money.

Second, Xcel’s customers — particularly cities — are demanding it. “When your customers are asking for this over and over,” Fowke said when announcing the news, “you really do listen. Boulder, the city of Denver, Breckenridge … Pueblo, they’re considered or they have already decided that they want to pursue 100 percent renewable.”

Remember that, because it’s important in an age of no federal climate policy: Cities can move utilities, and utilities can move the energy industry.

Third, the political landscape is shifting. Democrats took the governor’s mansion in Colorado, Michigan, New Mexico, and Wisconsin. In Colorado and New Mexico, they now have a “trifecta” — governor and both legislative houses. Running for governor in Colorado, Jared Polis supported a new renewable energy standard of 100 percent by 2040; with a newly Democrat-majority Congress, he might get it passed.

Renewables are on the rise in the West, popular with politicians, cities, corporations, and ordinary ratepayers. It is to Xcel’s benefit to get ahead of the curve and give the people what they want.

Fourth, Xcel is a vertically integrated monopoly — the areas in which it operates have not been “restructured,” i.e., generation has not been split off from transmission and distribution. Xcel owns and runs all of that stuff.

Regulated monopoly utilities, as I’ve explained in previous stories, do not make money on the power they sell or the fuel they buy. They make money by drawing a rate of return on investments in power infrastructure. These “rate-based” investments are the utility’s bread and butter.

In a broad sense, the shift to renewables is good for such utilities. When they shift from existing fossil fuel plants to new renewable energy, they shift from fuel (coal and natural gas) costs, which they make no money on, to investing in new renewable energy power plants, new batteries to store power and electric car chargers to help electrify the vehicle fleet, and tons of new transmission lines, much of which they can rate-base.

These goals (perhaps combined with a new, more stringent RPS in Colorado) will help Xcel get permission from regulators to depreciate lots of uneconomic old power assets (which activists have been hassling it about forever) and build, build, build a bunch of new stuff.

 

 

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6 Responses to “Trump Desperate to Shore up Fossil Fuels. Too Late.”

  1. John Says:

    Reblogged this on jpratt27 and commented:
    Nature doesn’t negotiate the longer we delay climate action the higher the price we will have to pay.

    We urgently need a a #GreenNewDeal


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