Clean energy from renewable resources comprised about 20 percent of Xcel Energy’s energy supply in 2013, more than double what it was just eight years ago in 2005. We remain committed to adding more. As the No. 1 wind power provider in the country for ten years running, we have found wind energy to be the most cost-effective renewable resource. It has grown to become an important component of our diverse energy portfolio. In 2013, we proposed, and have since received approval, to expand our wind portfolio by about 40 percent over the next couple years. We have made similar commitments to grow the use of solar power on our system from a range of resources— from large, central solar plants to community solar gardens to customer-owned solar panels. As our renewable energy portfolio grows, we are working to better integrate these resources onto our systems. Specifically, we have projects underway to improve system operations, forecasting and storage.
|Projected* by 2020||7,000||590||530||510||205||107||8,940||* Projected capacity includes approximately 500 megawatts of wind energy in Texas acquired through short-term arrangements with qualifying facilities; projections also assume capacity under expiring purchased power agreements is replaced.|
State Renewable Energy and Portfolio Standards
|Colorado Renewable Energy Standard||30 percent of retail sales by 2020, with 3 percent from distributed generation (DG), including at least 1.5 percent from retail net-metered DG resources and up to 1.5 percent from wholesale DG resources (defined as resources ≤30 megawatts located in Colorado)|
|Michigan Renewable Portfolio Standard||10 percent by 2015|
|Minnesota Renewable Portfolio Standard||30 percent by 2020 with at least 24 percent of sales from wind; 1.5 percent of sales from solar energy by 2020, with at least 10 percent of this from on-site solar|
|New Mexico Renewable Portfolio Standard||20 percent by 2020|
|North Dakota Renewable Portfolio Objective||10 percent by 20151|
|South Dakota Renewable Portfolio Objective||10 percent by 20151|
|Texas Renewable Portfolio Standard||Based on statewide capacity, Xcel Energy’s requirement is about 3 percent of retail sales in 2010 and 4 percent in 2015|
|Wisconsin Renewable Portfolio Standard||Statewide goal of 10 percent by year-end 2015, and each utility must increase renewable energy 6 percent over its baseline; for Xcel Energy this is 12.89 percent in 2015||1 Indicates the state has a voluntary renewable energy objective rather than a mandated standard|
We continue to look for ways to increase the value of the renewable energy on our system through the sale of Renewable Energy Credits (RECs). RECs are created by statute or voluntary trading programs to promote market-based, cost-effective development of renewable energy. Usually quantified in terms of one REC per one megawatt-hour of renewable energy generated (1 REC = 1 MWh), RECs can be disaggregated or separated from the underlying renewable energy itself and sold separately to utilities and other consumers.
In several states, Xcel Energy has more renewable energy on its system than is needed for compliance with renewable energy standards. Based on market opportunities, we sell some of our extra RECs. In 2013, we sold about 4 million RECs, about four times what was sold in 2012. The renewable energy that generated these RECs came from Colorado, Minnesota, New Mexico and Texas. Our customers benefit by sharing in profits associated with the sales.
Consistent with The Climate Registry protocols, Xcel Energy does not presently adjust its CO2 reporting for REC sales. However, because the treatment of CO2 attributes associated with REC sales under future greenhouse gas reporting protocols is uncertain, we have provided a chart to illustrate the potential effect of an alternative carbon reporting scenario, in addition to the actual carbon emissions shared in this report. This alternative assumes the avoided carbon emissions related to renewable energy are added back to the company’s overall emissions when RECs are transferred.
|Xcel Energy 2013 REC Sales by Vintage Year||2008||2009||2010||2011||2012||2013||Total|
We recently received sufficient regulatory approvals to expand our wind power use by about 40 percent. Wind power is easily the best-priced renewable option we have for meeting our customers’ energy needs, and it has become an important component to our balanced energy mix. As part of our wind power expansion, we will participate in nine projects that will add a total of 1,900 megawatts of new wind throughout our service territory, enough to serve about 900,000 homes. We currently have 4,900 megawatts of wind power on our systems. The new projects are scheduled to be in service by the beginning of 2016.
State regulators in Colorado, Minnesota and New Mexico have approved the following new wind power projects:
- Upper Midwest: Four projects totaling 750 megawatts in Minnesota and North Dakota for a system total of about 2,600 megawatts. The additions will save Upper Midwest customers about $225 million in fuel costs over 20 years.
- Texas/New Mexico: Three projects totaling almost 700 megawatts located in New Mexico, Oklahoma and Texas, for a total of more than 1,500 megawatts in wind purchases. The additions will save Texas-New Mexico customers between $481 million and $590 million in fuel costs over 20 years.
- Colorado: Two projects totaling approximately 450 megawatts, for a system total of about 2,600 megawatts. The additions will save Colorado customers $231 million in fuel costs over 20 years.
Our pursuit of new wind power capacity was made possible by extremely competitive prices and the extended federal Production Tax Credit (PTC) for projects that begin significant construction activities by the end of 2013.
Recognizing our commitment to expanding the use of wind power and progressive wind integration efforts, the American Wind Energy Association (AWEA) named Xcel Energy its “Utility of the Year” for 2013. This is the second time in five years we’ve received this award. We were also ranked as the No. 1 wind power provider in the United States by AWEA for the ninth consecutive year. Our early actions to add wind energy at competitive prices and proactively comply with state renewable energy standards have benefitted our customers and helped protect them against rising fuel and environmental compliance costs, all while reducing environmental impacts.
Our significant wind energy resources and ongoing efforts to improve system operations through better forecasting and other measures have resulted in multiple national and system records in terms of the amount of wind energy available to serve customers. One early morning hour in May 2013, we set a new national record with more than 60 percent of the electricity on our Colorado system coming from wind energy. Below is an overview of our hourly wind energy system milestones in 2013:
|System||Percent of Load||Date||Time|
|Upper Midwest||46%||April 27, 2014||3 a.m.|
|Colorado||60%||May 24, 2013||1 a.m.|
|Texas/New Mexico||26%||Feb. 27, 2013||12 a.m.|
|Xcel Energy Total||38%||April 27, 2013||2 a.m.|
Xcel Energy completed its fourth year of operational deployment of WindWX—one of the most advanced wind-production forecasting systems in the world. We have worked on a multi-year research and development project with Global Weather Corp. (GWC), an affiliate company of the National Center for Atmospheric Research (NCAR), to develop this highly detailed wind-forecasting system. We have reduced our forecasting error rate by almost 37 percent since 2009, and we estimate that this has saved our customers a total of $37.5 million through year-end 2013.
Wind power production is difficult to forecast due to its variability. Also, landscape features such as hills and trees can reshape wind speeds and directions, causing turbulence in ways that can greatly influence the amount of energy produced. In addition, most forecasting models are designed to generate information about winds near ground level rather than at 200 to 300 feet, where turbine hubs are typically located.
The WindWX system uses real-time, turbine-level operating data and applies sophisticated algorithms to forecast the amount of wind power that will be produced. Through ongoing work with GWC, forecasts for a 168-hour period are provided every 15 minutes across Xcel Energy’s entire service territory—from the hills of western Minnesota to the plains of eastern Colorado and the flat expanses of the Texas Panhandle.
The forecasts, now available worldwide through GWC, are designed to help utilities make better commitment and dispatch decisions, including opportunities to power down less efficient power plants when sufficient winds are forecasted to help meet customer electric demands. Xcel Energy receives royalties from the sale of WindWX to other utilities and will use the funds to pay for hosting services and further development on the system.
Xcel Energy, NCAR and GWC have initiated a third phase of project work to further enhance the sophistication of the WindWX technology. In this stage, Xcel Energy seeks to improve short-term forecasting, focusing on ramping and extreme weather events, introducing probabilities into the forecasting process, as well as exploring solar forecasting behind the customer meter. NCAR scientists and engineers will develop systems to enable us to anticipate sudden changes in wind, to shut down turbines ahead of potentially damaging icing events and to predict the amount of energy to be produced by private solar panels on a daily basis.
Learn more about wind power on our system .
Find information on our Windsource program.
Xcel Energy is approaching solar energy with the same determination that made us the No. 1 wind energy provider. We are investing in economical large-scale projects that serve all customers on our systems, in addition to offering customers the option to participate more through voluntary, customer-driven programs, such as Solar*Rewards®, Solar*Rewards® Community® and our proposed Solar*Connect™ program.
Investing in solar power is an opportunity to further diversify our energy supply and meet customer interest in clean energy. At the end of 2013, we had more than 300 megawatts of solar on our system, enough to power more than 60,000 homes, and we have plans to more than double this in the next several years. As we expand its use, we believe the policies that encourage solar development must work for everyone.
Under current policies, net energy metering is the method used to determine how customers with solar panels are compensated for the energy their systems produce. It was originally designed as an incentive to encourage the early adoption of rooftop solar when the market launched. As more customers install solar panels, Xcel Energy has become increasingly concerned with the effect of net metering on non-solar customers. While customers with rooftop solar still use and rely on the electric grid, they avoid paying for its upkeep under net metering—and those costs are unfairly shifted to non-solar customers. To address this issue, we have opened conversations with our regulators, the solar industry, customers and other interested stakeholders on how to make solar energy sustainable and practical for all.
Large, Central Solar Energy (Utility-Scale)
Large-scale installations make solar power available at the right cost, to the greatest number of people in the communities Xcel Energy serves. We support the development of large, central solar because of the benefits that come with the economies of scale.
It is the right way to do solar because large installations can be developed in optimal locations to maximize sun exposure. They produce up to 50 percent more energy panel-for-panel than the typical rooftop installation, due in part to tracking technology that is used to follow the sun, compared to fixed panels on most rooftops. For these reasons, large projects are lower in cost—less than one half the cost of rooftop solar to install per kilowatt.
Xcel Energy had 139 megawatts-AC of large, central solar on its systems at the end of 2013, and we have plans to expand this. We have proposed and received approval to enter into power purchase agreements for 170 megawatts of large-scale solar in Colorado and 100 megawatts of large-scale solar in Minnesota, to be installed by 2016 and at costs competitive with new natural gas-fueled generation.
The largest project under this plan is the Comanche Solar Project. This 120-megawatt project will be built adjacent to our Comanche Generating Plant in Pueblo, Colo. It is projected to generate enough power for 31,000 homes during its first year of operation and produce over six billion kilowatt-hours of clean energy over the life of the project.
The table below outlines the large-scale solar projects that currently supply Xcel Energy’s systems
|Facility Owner||System Type||Size (AC)||Location||Online|
|SunEdison Alamosa||Combination concentrating and flat-plate photovoltaic||7 MW||Alamosa, Colo.||2007|
|SunPower Greater Sandhill||High efficiency photovoltaic||19 MW||Alamosa, Colo.||2010|
|SunEdison||Ground-mounted photovoltaic (five 10-MW sites)||50 MW||Lea and Eddy counties, New Mexico||2011|
|Iberdrola Renewables San Luis Valley Solar||Central photovoltaic||30 MW||Alamosa, Colo.||2012|
|Cogentrix Alamosa Solar Generating Project||Central, concentrating photovoltaic||30 MW||Alamosa, Colo.||2012|
|Solar Technology Acceleration Center (SolarTAC)||Multiple technologies||1 MW||Aurora, Colo.||2012|
|St. John’s Solar Farm||Photovoltaic||0.4 MW||Collegville, Minn.||2010|
|Slayton Solar||Photovoltaic||1.66 MW||Slayton, Minn.||2013|
Learn more about SolarTAC and Xcel Energy’s participation in this world-class solar testing and demonstration facility.
Xcel Energy offers the Solar*Rewards® program in Colorado, Minnesota and New Mexico. We provide incentives to customers interested in installing solar systems on homes and businesses to help make the systems more affordable. In turn, the program and the renewable energy credits associated with the solar energy produced enable us to meet requirements of state renewable energy standards.
Read more about Xcel Energy’s Solar*Rewards program.
Solar gardens offer a convenient, more affordable option for customers to invest in solar energy, especially for those who cannot or do not want to install solar panels on site. In Colorado, Xcel Energy offers Solar*Rewards® Community® for customers who want to participate in a shared, centralized solar installation. We proposed a similar program in Minnesota in 2013, and if approved, we expect to begin accepting applications from developers in 2014.
Read more about Xcel Energy’s solar gardens programs.
Through our New Mexico Community Solar program, we own four photovoltaic systems located on community partner sites in eastern and southeastern New Mexico. A key component of the program is educational outreach. We provide energy curriculum developed specifically for New Mexico schools. Students, as well as the general public, are able to access live and historical data measuring ambient temperatures, wind speed and levels of solar production at the sites. Find information on the program website.
Learn more about solar power on our system.
Read about our work at SolarTAC.
As the energy landscape continues to evolve and the use of renewable energy grows, it is critical that we incorporate renewable resources in the right way—in a fair, efficient and sustainable manner. Generally, Xcel Energy’s policy around solar and other clean energy resources is guided by three principles:
- We support energy policy that meets the demand for clean energy in a manner that is equitable to all customers—those who participate and those who do not.
- If customers receive additional incentives to develop renewable resources, these incentives should be transparent, meaning customers and others should know what and how they are contributing to develop clean energy sources.
- Cost should be a priority; all customers should have access to the lowest cost, most efficient renewable energy resources available.
Net Metering in Colorado
Net energy metering is the method for determining how customers with solar panels are compensated for the energy their systems produce. It was originally designed to encourage the adoption of on-site solar energy. The current net metering calculation does not separate the cost of energy from the cost of the infrastructure (poles, wires and other interconnected technologies), freeing solar energy users from the costs that keep the electric grid safe and reliable. And while they don’t pay to help maintain the electric grid, solar customers still use and benefit from having this broader energy system available to them when they need it—at night, when it is cloudy or when their solar panels are not producing.
In a plan submitted to the Colorado Public Utilities Commission (CPUC) in 2013, Xcel Energy proposed a way to improve the transparency of net metering by tracking and quantifying the costs that are shifted from solar customers to non-solar customers. Ultimately, the goal of this proposal is to start an informed conversation with the utilities commission, policymakers, the solar industry, customers and others to help find a solution that allows us to continue pursuing solar development in a way that is transparent, cost-effective and accessible to all. Solar energy delivered through a range of installations from rooftop to large-scale, combined with fair and economically sustainable reimbursement policies, will make a major contribution to Colorado’s clean, reliable energy future.
The CPUC has established a special docket and is determining the process to explore this issue further. We anticipate the process to take place in 2014.
Minnesota Solar Standard
Xcel Energy is committed to providing the solar power that the state of Minnesota desires. In 2013, the Minnesota legislature adopted a statewide solar energy standard that requires investor-owned utilities to provide 1.5 percent of their power from solar by 2020. The legislation also requires that 10 percent of the 1.5 percent come from on-site or rooftop solar.
We have proposed plans to meet the new standard in the most reliable, cost-effective way and are on pace to meet the standard. Through a range of solar energy options, we will add nearly 300 megawatts of new solar resources by 2020. About two-thirds of this solar power will come from large-scale solar projects that provide the lowest cost solar energy and will benefit all customers on our system. In April 2014, we requested proposals for large-scale projects totaling up to 100 megawatts of solar energy.
Xcel Energy is also moving forward to negotiate an agreement to purchase solar energy from a 100-megawatt project offered by Geronimo Energy. During our last resource planning process, the Minnesota Public Utilities Commission (MPUC) determined that this project was the best alternative for our customers in light of the state’s new solar standard. Geronimo plans to spend about $250 million to install solar power facilities on 20 sites located next to existing substations across Minnesota.
In addition to large-scale solar power, we will meet the remainder of the solar standard by expanding our program offerings for those customers who want to participate in solar energy at a greater level. In the fall of 2013, we filed with the MPUC for a solar gardens program. Solar*Rewards®Community® is an option for customers who want to own solar power but cannot or do not want to install solar panels. Through this program customers subscribe or purchase solar power from a solar garden and can take advantage of the economies of scale that come with large-scale solar installations. We expect to receive MPUC approval and begin offering the program in 2014.
For those customers with the interest and means to pursue rooftop solar, Xcel Energy will continue to offer an on-site solar program. We filed a proposal for an improved Solar*Rewards® program with the MPUC in fall 2013 and expect to begin offering the revised program in 2014.
In addition to establishing a standard for solar energy, the new Minnesota law also created another mechanism to compensate solar customers for energy generated by their facilities. The statue is intended to pay solar customers based on the value solar energy provides to utilities. The Minnesota Department of Commerce was charged with establishing a methodology to determine the value of solar, which was to be based on known and measurable costs and benefits to the utility. Xcel Energy participated in the department’s stakeholder process to develop this methodology, which was proposed to and approved by the MPUC in early 2014. Utilities in Minnesota now have the option to adopt this value-of-solar methodology as an alternative to net metering policies.
Xcel Energy wants to ensure that solar energy is delivered to customers at the best price and in a manner that is fair to all. We asked the MPUC in April 2014 to reconsider its value-of-solar order and to specifically review the valuation methodology to confirm that it fairly balances the interests of customers and solar developers.
Learn more about Xcel Energy’s commitment to solar and our policy developments.
Other Renewable and Alternative Energy Resources
Besides wind and solar power, has nearly 700 megawatts of other renewable and alternative energy resources on our system, including power produced from biomass, waste-to-energy, refuse-derived fuel and hydroelectric facilities.
Learn more about other renewable resources on our system.
Renewable Development Fund
Xcel Energy’s Renewable Development Fund (RDF) supports the startup, expansion and attraction of renewable electric energy projects and companies in Minnesota. RDF also stimulates research and development into renewable electric energy technologies. Our RDF efforts are designed to increase the market penetration of renewable electric energy resources at reasonable costs, which benefits customers. RDF is financed by our Minnesota and Wisconsin electricity customers.
In March 2014, the Minnesota Public Utilities Commission (MPUC) issued a written order approving our grant award recommendations for cycle 4, the latest funding cycle from the RDF. These recommendations include 29 grant awards totaling $42 million, as well as six projects to be held in reserve. Grants were awarded in the areas of energy production, research and development projects, and educational research initiatives. Nearly 70 renewable energy proposals were considered for funding, and those selected predominantly feature solar technologies. See the full list of projects funded.
Projects that receive an RDF grant award are evaluated by a seven-member advisory board consisting of two representatives of environmental organizations, one representative of the Prairie Island Indian Community, an industrial/commercial customer representative, a residential customer representative and two Xcel Energy representatives. Xcel Energy recommends projects which are approved by the Minnesota Public Utilities Commission.
Learn more about the Renewable Development Fund.
Renewable Energy Trust
The Renewable Energy Trust (RET) is a voluntary, customer-driven charitable fund established in 1993 to help develop renewable energy sources in Colorado for the benefit of local schools, nonprofit organizations and community groups. Xcel Energy customer contributions to RET are tax deductible and are used to purchase and install renewable energy projects, such as solar electric systems for community organizations that would otherwise be unable to afford the technology. We collected donations totaling $67,000 from customers in 2013, although no grant awards were made during the year. Xcel Energy plans to make awards to new projects later in 2014.
Learn more about the Renewable Energy Trust.