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Minnesota’s Goal for 80% Carbon Reductions by 2050 will be Expensive – and Xcel Agrees

Current policies in Minnesota require the state to reduce carbon emissions by 80 percent from 2005 levels by 2050.

This will not only require the addition of renewable energy sources into energy markets but will also involve prematurely retiring coal plants that provide low-cost electricity, building significant transmission lines, investing in battery storage technology, and constructing more natural gas plants to “back-up” wind and solar energy sources when they cannot produce electricity.

In other words, achieving 80 percent reductions by 2050 will completely change the state’s energy market – and it will be costly.

But don’t just take my word for it. Xcel has said as much in their most recent annual report.

Below are the most noteworthy quotes from Xcel’s annual report that detail just how dramatic and expensive this kind of energy shift will be:

Significant Changes in the Energy Market

[I]t is important to acknowledge that an 80 percent reduction in GHG emissions implies a complete transformation in the way electricity is produced and used. The Company’s CO2 emissions of 30.6 million tons in 2005 would need to decline to about 6 million tons per year by 2050.

Importantly, each increment of CO2 reduction may be more challenging and costly than the last.

Lacks the Technology to Achieve

This means an electricity generation, transmission, distribution and storage system that is largely carbon-free, supported by a small fossil fuel share – probably highly efficient natural gas combined cycle and combustion turbines – used primarily for integrating intermittent renewables and to a limited extent for peaking power and ancillary service needs. It would likely require energy storage technologies not available today.

Very Costly to Achieve

Initially, it was possible to retire relatively older, smaller and less efficient coal units, to invest in the most cost-effective renewable resources, and to invest in the “low-hanging fruit” among DSM opportunities.

To reach an 80 percent reduction implies retiring larger, highly efficient and cost-effective baseload units, whose generation is expensive to replace.

If Xcel’s Nuclear Plants Retire

[I]f they are replaced by intermittent renewables, significantly more MW will have to be installed than the baseload nuclear MW retiring, and these resources will have to be balanced with CO2-emitting natural gas or with large-scale energy storage.


Drastically transforming our energy markets to meet 80 percent reductions by 2050 would require many seemingly impossible tasks; including the application of technology not even designed yet.

Pursuing this policy would also mean prematurely retiring coal plants that offer cheap and affordable energy – which could do so for many years down the road. Unfortunately, this would leave ratepayers forced to pay for the leftover capital expenses for power plants that are not even producing energy, while simultaneously paying for the addition of wind, solar, and natural gas sources to replace the coal capacity.

These problems will only increase if public pressure forces Xcel Energy to shut down its two nuclear plants.

Minnesota needs to take a fresh look at its energy policies before utility companies are forced to make dramatic investments that cause electricity bills to go through the roof.

Mitchell Rolling (marolling20@gmail.com) is an intern at Center of the American Experiment. 




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