Clean energy from renewable resources accounted for more than 20 percent of Xcel Energy’s total energy supply in 2014, more than double what it was in 2005. We remain committed to expanding the use of renewable energy in the most economical way for customers.
As the No. 1 utility provider of wind energy in the country for 11 years running, we have found wind power 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 to expand our wind portfolio by about 40 percent over the next couple years, from 5,080 megawatts to 7,078 megawatts in 2016. We have made similar commitments to grow the use of solar power on our system through a range of resources—from large, central solar plants to community solar gardens to customer-owned solar panels. In fact, our solar portfolio will more than triple by the end of 2016.
As our renewable energy portfolio grows, we are working to better integrate these resources onto our systems too. Specifically, we have projects underway to improve system operations, forecasting and storage.
|Texas/ New Mexico||1,526||-||50||8||58||-||-||1,584|
|Projected year-end 2016||7,078||377||736||388||1,124||197||107||8,883|
|Projected by 20201||8,231||590||736||583||1,319||210||105||10,455|
|1 Projected capacity includes approximately 500 MW of short-term Texas QF wind. Projections also assume expiring PPA capacity is replaced. Onsite solar projections are estimated based on current plans.|
|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 2015A|
|South Dakota Renewable Portfolio Objective||10 percent by 2015A|
|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|
|A Indicates the state has a voluntary renewable energy objective rather than a mandated standard|
Renewable Energy Credits
A renewable energy certificate or credit (REC) is created for every megawatt-hour of renewable electricity generated (1 REC = 1 MWh). RECs are created by statute or voluntary trading programs to promote market-based, cost-effective development of renewable energy. RECs can be disaggregated or separated from the underlying renewable energy and sold separately to utilities and other consumers.
Xcel Energy uses RECs to confirm or validate compliance with state renewable energy standards throughout our service territory. Our company carefully tracks its REC ownership and works to comply with the rules and best practices around renewable energy claims. Generally, only parties that own or retire RECs can claim to use the renewable energy.
Strategy and Sales
We continue to look for ways to increase the value of the renewable energy on our systems through the sale of RECs. 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 2014, we sold about 1.14 million RECs, about one-third what was sold in 2013. The renewable energy that generated these RECs came from Colorado, New Mexico, Texas and the Upper Midwest. Our customers benefit by sharing in any 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 CO2 reporting scenario, in addition to the actual carbon dioxide emissions shared in this report. This alternative assumes the avoided CO2 emissions related to renewable energy are added back to the company’s overall emissions when RECs are transferred.
|Xcel Energy REC Sales by Vintage Year||2007||2009||2011||2012||2013||2014||Total|
Wind power has become an important component to our diverse energy mix, as it is our most cost-effective renewable option. Our early actions to add wind energy at competitive prices and proactively comply with state renewable energy standards have benefitted customers and helped protect them against rising fuel and environmental compliance costs, all while reducing environmental impacts. For 11 consecutive years the American Wind Energy Association has ranked Xcel Energy the nation’s No. 1 utility provider of wind energy. And the wind power on our systems continues to grow.
To take advantage of extremely competitive prices available in the market today, we will add nine new projects totaling 1,900 megawatts, enough to serve about 900,000 homes, throughout our service territory by 2016. Three of these projects were completed and began producing power last year.
The following wind power additions are underway:
- 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. In October 2014, the 200-megawatt Limon III Wind Farm began operations.
- 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. At the end of 2014, the 199-megawatt Mammoth Plains Wind Energy Center in Oklahoma and the 249-megawatt Palo Duro Wind Energy Center in Texas began operations.
- 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.
Our significant wind energy resources and ongoing efforts to improve system operations through better forecasting and other measures have resulted in multiple system records in terms of the amount of wind energy available to serve customers. Around midnight on Nov. 1, 2014, we set a new hourly system record with wind producing more than 61 percent of the electricity on our Colorado system. High wind generation levels are becoming increasingly more common, 2 percent of the time this past year, wind exceeded 50 percent of our energy production in Colorado on an hourly basis.
Below is an overview of our peak hourly wind energy milestones in 2014:
|System||Percent of Load Served||Date||Time|
|Upper Midwest||46%||April 27, 2014||3 a.m.|
|Colorado||61%||Nov. 1, 2014||12 a.m.|
|Texas/New Mexico||35%||Dec. 25, 2014||3 a.m.|
|Xcel Energy Total||38%||April 27, 2014||2 a.m.|
Xcel Energy completed its fifth year using WindWX—one of the most advanced wind-production forecasting systems in the world. Through a multi-year research and development project with Global Weather Corp. (GWC), an affiliate company of the National Center for Atmospheric Research (NCAR), we helped develop this highly detailed wind-forecasting system.
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 uses the funds to pay for hosting services and further development on the system.
The system has increased our wind forecasting accuracy by nearly 40 percent since 2009, and we estimate that this has saved our customers a total of $49 million through year-end 2014. The project’s success was honored in 2014 with a Colorado Governor’s Award presented by Co-Labs, a nonprofit that works to inform the public about the breakthroughs and impacts from the state’s 30 federally funded labs and research facilities.
Xcel Energy, NCAR and GWC are currently collaborating on a third phase of the project to further enhance the sophistication of the WindWX technology. We are seeking 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 are developing systems to help 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.
Improved Wind Integration Efforts
While wind energy prices have declined to the point where wind can compete with new natural gas-fueled generation, wind can be expensive to operate and integrate on the electric system. Although improved forecasting helps to manage this cost, operational costs will continue to rise as wind production increases.
Xcel Energy continues to improve processes and seek additional opportunities to lower integration costs, including:
- Cycling less efficient base-load fossil fuel units offline to accommodate more wind generation; the approach reduces fuel costs and helps save about 233,000 tons of carbon dioxide emissions annually
- Using set-point controls and Automatic Generation Control of wind and thermal units, which lets wind farms operate at peak levels while reducing production from economical fossil fuel units
- Establishing a 30-minute flexibility reserve; after studying the amount of wind energy typically lost within 30 minutes, we implemented the new practice, which dramatically reduced costs associated with carrying large wind reserves
- Adding more flexible production resources that can be ramped up and down more efficiently to work with variable wind generation, such as the new natural gas plant being installed under the Clean Air-Clean Jobs program in Colorado
Xcel Energy’s Colorado system is somewhat unique in that it is small and serves a limited geographic area, which can present challenges for integrating higher levels of wind energy. We curtail about 3 percent of our total wind generation to reliably achieve annual wind production levels around 20 percent. To manage the cost and overall impact of curtailments, the company has taken the following steps:
- Negotiating purchase power agreements that include free curtailment hours
- Conducting a special screening as part of the resource planning process to account for curtailment costs as we evaluate future resources
- Exploring opportunities to increase the flexibility of our Colorado system by developing a larger, organized market in the West; as a step in this direction, the company filed with the Federal Energy Regulatory Commission to enable joint dispatch of its resources with the resources of other Colorado utilities to allow for more efficient and cost-effective, real-time system operations
Learn more about wind power on our system.
Find information on our Windsource program.
Xcel Energy is approaching solar energy with the same commitment that made our company the No. 1 utility provider of wind energy. 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® and Solar*Rewards® Community®.
Investing in solar power is an opportunity to further diversify our energy supply and meet customer interest in clean energy. At the end of 2014, we had more than 327 megawatts of solar on our system, enough to power about 71,000 homes and we have plans to more than triple this in 2016.
As we expand the use of solar power, we believe the policies that encourage its development must work for all customers. Our objective is to meet the preferences and interests of our customers in a way that treats everyone equally and fairly, whether you are a customer who chooses to invest in more renewable energy or not.
Large, Central Solar Energy (Utility-Scale)
Large-scale installations make solar power available at the lowest 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.
These systems are developed with more sophisticated technology 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 2014, with the following expansion plans underway:
- Colorado: Two approved projects totaling 170 megawatts, including purchases from the120-megawatt Comanche Solar project in Pueblo, Colo., and the 50-megawatt SunPower San Luis Valley project near Alamosa, Colo.
- Texas/New Mexico: Two proposed projects totaling 140 megawatts, including purchases from two projects developed near Roswell, NM.
- Upper Midwest: Four approved projects totaling 287 megawatts, including a 100-megawatt purchase from the North Star Solar project near North Branch, Minn., a 62-megawatt purchase from the Marshall Solar project near Marshall, Minn., and a 25-megawatt purchase from the MN Solar I project near Tracy, Minn.; in addition, the Minnesota Public Utilities Commission approved the purchase of 100-megawatts from the Aurora Solar project to be built at 20 locations across Minnesota.
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||6.95 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||0.92 MW||Aurora, Colo.||2012|
|St. John’s Solar Farm||Photovoltaic||0.32 MW||Collegeville, 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 state renewable energy standards.
Read more about Xcel Energy’s Solar*Rewards program.
Solar gardens offer a convenient 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 and Minnesota, Xcel Energy offers Solar*Rewards® Community® for customers who want to participate in a shared, centralized solar installation.
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. The four systems installed in 2009 and 2010 total 77 kilowatts and feature different types of technology, including rooftop and ground-mounted solar photovoltaic panels and single- and dual-axis panels. Projects are located at Clovis High School, Eastern New Mexico University-Roswell and Xcel Energy’s Hobbs Service Center. 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.
Responsible Solar Policy
As the energy landscape continues to evolve and the use of renewable energy grows, it is critical that we incorporate renewable resources in a fair, efficient and sustainable manner. Xcel Energy’s policy around solar and other clean energy resources is guided by these principles:
- We support the development of solar power as part of a diverse energy portfolio
- Cost should be a priority; all customers should have access to the lowest cost, most efficient renewable energy resources available
- Incentives supporting solar energy should be fair and transparent—subsidies should be reasonable and based on market pricing, and customers should know what and how they are contributing to develop clean energy sources
- Energy policy should meet the demand for clean energy in a manner that is equitable to all customers—those who choose to participate and those who do not
- All customers should pay their fair share of grid and system costs
- We will seek to offer customers a variety of solar options to meet different needs
Net Metering in Colorado
Net 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 and to grow a fledgling industry. As panel prices drop and more customers install solar, we have 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.
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. In response, the Colorado Public Utilities Commission began a public process in 2014 to determine the future of net metering in the state. Xcel Energy is participating, along with the solar industry and other stakeholders, in a series of panel discussions with the Commission to examine:
- The present and expected impacts of net metering on Colorado utilities and their customers
- The costs and benefits associated with on-site solar energy
- The efforts of other states across the country to address net metering
- The technologies and policies around solar power
In addition to the panel discussions, all participating parties have submitted legal briefs to respond to specific Commission questions or interests.
Minnesota Community Solar Gardens
Xcel Energy is aggressively expanding solar power in Minnesota to meet the requirements of the state’s new solar energy standard. Adopted in 2013, the standard requires investor-owned utilities to provide 1.5 percent of power from solar energy sources by 2020, and 10 percent of this requirement must come from on-site or rooftop solar.
Beyond the requirement, Xcel Energy wants to provide customers new options for using solar resources—something we know they want. Our Solar*Rewards and Solar*Rewards Community programs both play a role in this effort, in addition to the state’s Made in Minnesota solar rooftop program administered by the Department of Commerce.
Xcel Energy’s Solar*Rewards Community program launched in mid-December 2014, and through April 2015, we had received applications from third-party developers with plans to develop solar garden projects, totaling about 560 megawatts-DC of solar power. In March 2015, at the request of the Minnesota Public Utilities Commission, we submitted comments providing our perspective on how the program is unfolding.
As part of Minnesota’s solar energy standard, the legislature considered and passed the concept of community solar gardens, envisioned as small-scale solar installations—up to one megawatt—that allowed neighbors, nonprofits, churches and businesses to share access to a centrally located solar installation.
Many of the applications for solar garden projects that we received through April 2015 are more similar to large-scale solar. State statute set the size limit for solar gardens at one megawatt; however, approximately 95 percent of the applications are for garden projects of more than one megawatt, with one as large as 40 megawatts. The size of these projects would likely require approving large-scale projects that will have significant cost for customers without the regulatory safeguards and oversight typically given to solar acquisitions of this size.
The impact of higher, small-scale solar pricing for large-scale solar developments will have a real impact on our customers. Small-scale solar gardens are more expensive to develop than large-scale developments, and the payment rate set under Solar*Rewards Community recognized this reality. We estimate that developing all of the garden applications received as of April 2015, including all those that are over one-megawatt in size, would potentially increase rates by $60 million or more annually to customers who are not participating in solar gardens.
Xcel Energy has provided the commission the results to date and our perspective in hopes that any adjustments can be made in the program’s early stages. We also have advanced garden projects totaling about 80 megawatts-DC that meet the one-megawatt size limit. We support the Solar*Rewards Community program and want it to succeed by getting the program right at the beginning. We have asked the commission to confirm our view of what constitutes a solar garden and is eligible for the Solar*Rewards Community program. In the interim, we will work with solar developers to keep the process moving forward.
Learn more about Xcel Energy’s commitment to solar and our policy developments.
Other Renewable and Alternative Energy Resources
Besides wind and solar power, Xcel Energy has nearly 700 megawatts of other renewable and alternative energy resources on our system, including hydroelectric, biomass, waste-to-energy and refuse-derived fuel.
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. The 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 for the MPUC to approve.
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. 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 about $64,000 from customers in 2014, and no grant awards were made during the year.