Xcel Energy Will Spend More Than $2 Billion To Maintain Existing Wind Turbines Through 2034
From now until 2034, Xcel Energy will spend more than $2 billion on repowering 1,200 megawatts (MW) of existing wind capacity, based on the company’s upcoming resource plan and cost projections for prior repowering sites.
Just to be clear, this $2 billion will not add any additional wind capacity to Xcel’s fleet, and is designed merely to maintain existing wind energy resources.
Minnesota currently has about 3,500 MWs of wind capacity on the grid, meaning Xcel is planning to repower roughly 30 percent of the state’s entire wind fleet.
If we apply the same cost estimates to the remaining 2,300 megawatts of wind capacity that will need to be repowered eventually, which is either owned by other companies or part of the capacity Xcel isn’t repowering until after 2034, Minnesota ratepayers can expect to foot the bill for an additional $4 billion, bringing the total to $6 billion simply to maintain existing wind turbines.
If state officials decide to raise Minnesota’s renewable energy mandate from requiring 25 percent of electricity generation provided by renewables to a 50 percent threshold, this $6 billion will be in addition to whatever more utility companies must invest in order to reach higher renewable generation levels.
This ongoing capital expenditure to maintain Minnesota’s wind fleet will continue until lawmakers and utilities end their reckless pursuit of green energy, which has driven up the cost of electricity for all Minnesotan’s and hasn’t made a dent in reducing climate change or any future warming on the planet.
Let me repeat: wind and solar energy investments, which were designed to reduce climate change and total in the multi-billions of dollars in Minnesota alone, have done nothing to reduce climate change.
So, here’s a radical question: what if Minnesota utility companies spent this money on more efficient, reliable, and valuable energy sources that would still reduce CO2 emissions? Like natural gas, for instance.
Before we begin this experiment, one important piece of context is needed:
If Minnesota policymakers were truly concerned with providing reliable electricity at a low cost, they would be encouraging utility companies to utilize existing resources, like our existing coal, natural gas, and nuclear power facilities, throughout their useful lives, and wouldn’t be allowing the high level of investments Xcel is asking for.
It may be true that government mandates are requiring utility companies like Xcel to hit a certain level of renewable generation, thus fueling their massive investments in new infrastructure in recent years – but Xcel’s new resource plan goes further than what is required in anticipation of further mandates and in cooperation with renewable energy groups, like the Sierra Club, in exchange for accepting the company’s natural gas investments.
Ratepayers, however, shouldn’t give up as easily as Xcel, who helped write the state’s renewable energy legislation in the first place and profits from building new infrastructure.
Minnesotan’s deserve better, and there are more affordable options to choose from.
What If Xcel Built 1,200 Megawatts of New Natural Gas Instead of Repowering 1,200 Megawatts of Wind
If Xcel were to build 1,200 megawatts of reliable natural gas capacity instead of repowering 1,200 megawatts of intermittent wind capacity, it could do so at a cheaper total cost of just under $1.9 billion over a longer period of 30 years, whereas wind facilities usually last no more than 20, while producing 155% more electricity over its lifespan compared to wind (based on 50 percent capacity factors for wind).
These costs include initial and ongoing capital costs, fixed and variable O&M costs, fuel costs, and transmission costs based on Xcel’s own assumptions – meaning, compared to natural gas, repowering wind facilities would not provide for any net fuel cost savings.
Compared to the lifespan of a wind facility, natural gas produces more electricity at a more affordable cost over a longer period of time. Furthermore, if the 1,200 megawatts of new natural gas capacity went toward replacing Xcel’s retiring coal capacity, CO2 emissions would be cut by more than half.
Of course, even if natural gas sounds wonderful compared to wind energy, it should also be mentioned that cutting emissions in Minnesota by half wouldn’t have any impact on “climate change” at all.
So… Do We Even Need New Energy Sources?
Investing in either wind or natural gas, which would both increase electricity rates, could be averted entirely if Xcel was simply allowed to utilize existing coal facilities until their useful lives came to a natural end, instead of retiring them early and skipping out on the immense savings running them longer could bring to ratepayers.
Remember, it was Minnesota ratepayers who paid for the construction of these facilities to provide reliable and affordable electricity for a determined number of years, and they deserve to reap the full benefits of these still-useful power plants.
Government mandates, however, have directly resulted in higher electricity costs by forcing utility companies to shut down existing facilities prematurely and build newer and inefficient renewable energy sources to replace them, in addition to natural gas plants for reliability concerns.
So, you be the judge.
Is it fair, just, and/or reasonable to force ratepayers to pay for the construction of coal facilities only to shut them down early without ratepayers receiving the full benefit from them, while forcing these same ratepayers to also pay for the decommissioning expenses that go along with shutting them down prematurely?
I don’t know about you, but I don’t enjoy paying for something and only receiving half the value, in addition to paying a premium just to not receive it.
Imagine ordering a deluxe meal at a Culver’s drive thru, and just as you’re about to pull away, the manager comes to your window and tells you he’s taking your fries back with no refund, and you have to pay him another $5 for his walk out there.
You’d tell this fine manager to pound sand, and that is exactly what all Minnesotan’s should tell Xcel when they say they’re retiring their coal plants to make room for billions of dollars of investments for renewables. (Oh yeah, Xcel is also spending $7.5 billion on solar energy).