Faced with criticism from environmental and clean energy groups, Xcel Energy has nixed plans for a big natural gas plant in Becker that would have cost roughly $800 million.
Instead, the company said Friday it now plans to build two smaller natural gas plants — one each in southwestern Minnesota and North Dakota — at less than half the cost of the Becker plant.
Also, the new gas plants would operate only sporadically to even out renewable power production, not almost continuously like the planned Becker plant, thus emitting far fewer greenhouse gases.
In addition, Xcel said Friday it will increase its wind and solar power capacity by 27% over the next decade, more than previously planned. And for the first time, the Minneapolis-based company revealed plans for significant energy storage facilities in Minnesota.
Storage, usually in the form of batteries, is seen as a key building block of a carbon-free grid, capturing electricity produced by wind and solar. Xcel did not disclose details on its storage plans, saying battery deployment wouldn’t begin until about 2030.
“We have an important milestone in our resource plan today,” said Christopher Clark, Xcel’s president for Minnesota and the Dakotas. The company’s announcement Friday is a revision of its integrated resource plan, an important proposal before Minnesota utility regulators.
Xcel had planned to build a roughly 800-megawatt natural gas-fired plant at its Sherco site in Becker, where three large coal plants currently operate. Xcel plans to close those plants — and all of its coal generators in Minnesota — between 2023 and 2030.
Xcel had pitched the new gas plant as a replacement for the coal plants, and a necessity for the reliability of its electric grid, particularly as more wind and solar – both variable sources of power — come online.
Gas plants emit about half of the carbon dioxide as coal generators, but they are still significant greenhouse gas emitters, environmental and clean energy groups say.
Several of those groups have criticized the big Sherco gas plant as unnecessary in filings with state utility regulators. “One consistent theme in them was pretty strong opposition to our Sherco gas plant in Becker,” Clark said.
Xcel’s new plan is a blow to Becker and Sherburne County, which Clark acknowledged.
“I think they will view it as a significant loss of property taxes,” said Clark, adding the company is working with Becker to minimize the economic losses.
Also, Xcel will continue its plans to build a new solar plant in Becker, which would be four times larger than the state’s current largest solar array.
In addition to building two new gas plants, Xcel plans to refurbish two of its existing gas plants.
The two new gas plants would both have 400 megawatts of generating capacity, roughly the same together as the Sherco gas plant. However, they would be “peaker” plants, running far less than the Sherco gas plant would have.
They would have only a 5% “capacity factor,” compared with 80% for the Sherco gas plant, said Bria Shea, Xcel’s director of regulatory strategy. “The capacity factor makes them a very different resource.”
Clark said the new gas plants would still be needed for grid reliability since the sun isn’t always shining, and the wind isn’t always blowing.”It’s really the ability to call on a resource to run when we need it to run,” he said.
Xcel said its new plan would save customers about $600 million over time and reduce its carbon emissions 85% by 2030, compared with an 80% reduction in the company’s original proposal.
Xcel was one of the first U.S. utilities to announce a goal of 100% clean energy by 2050. Doing so would mean that the company must deal with gas plants that will still be in operation by that time.
One possible alternative is capturing carbon emissions and storing them underground — currently an expensive and unproven technology. Another is moving to hydrogen as fuel in gas-fired generators, a promising but still expensive technology.
Xcel said Friday that its new gas plants would be designed to enable the use of hydrogen in the future.