Profits & planned obsolescence
The hidden—and huge— costs of Xcel’s plans to shutter its coal plants.
Xcel Energy recently unveiled its plan to retire its coal plants prematurely and replace them with billions of dollars’ worth of wind, solar, and most importantly, natural gas. Unfortunately, Xcel’s plan will constitute a massive increase in electricity costs for Minnesota families, businesses, and schools, and these costs would far exceed any potential environmental benefit.
Xcel’s plan would increase costs because, at its core, the idea is the very embodiment of planned obsolescence. The National Renewable Energy Lab states wind turbines last only 20 years, and solar panels last for only 25 to 30 years. This means every wind turbine and solar panel built today will be scrap metal by 2050, the year Xcel claims it will become “100 percent carbon-free,” and Minnesota residents will be forced to pay for the replacements.
Many renewable energy advocates would likely agree that wind and solar have caused electricity bills to climb but argue the costs have been worth it. However, they would be incorrect.
The Minnesota Public Utilities Commission estimates the “cost” of carbon dioxide emissions to be between $8.85 and $41.56 per ton for 2019, but since 2007, Minnesota has spent more than $15 billion to support wind and solar and has only reduced our CO2 emissions by approximately 50.8 million metric tons through 2017, a cost of $295 per ton.
In other words, we have lost between $253 and $280 per ton of CO2 reduced. Clearly, the benefits are not worth the costs.
Here’s a better alternative: Maintain our existing coal plants through the end of their useful lifetimes—the end of the 2030s—and gradually replace them with nuclear and large hydroelectric power.
In March, Center of the American Experiment released a study showing that legalizing new nuclear plants would cost roughly three times less than relying on wind, solar and natural gas, and this plan would likely cost even less if large hydroelectric power was allowed to be purchased to meet carbon-free goals.
Nuclear and hydro are superior to wind and solar because they can generate carbon-dioxide-free power around the clock, 365 days a year, and do not require natural gas backup. Furthermore, nuclear plants can operate for up to 80 years, and hydroelectric dams built in the 1930s are still churning out power today. The first New Deal was actually very green.
Why would Xcel opt for wind and solar rather than nuclear and large hydro? It boils down to incentives. Many people don’t realize that Xcel is not really a private company; it is a government-approved monopoly utility that is guaranteed to make a 7.5 percent profit on every dollar it spends on infrastructure, such as wind turbines, solar panels, and natural gas plants.
Therefore, the incentive is to be as inefficient as possible because the more Xcel spends, the more it earns, and you as a consumer are forced by the government to buy your electricity from the utility company at inflated prices. Xcel’s heavy investments in wind and solar grew its corporate profits from $600 million in 2007 to more than $1.2 billion in 2018. Unfortunately, Xcel’s wind and solar obsession will result in Minnesota families getting taken to the cleaners by “clean” energy.
A version of this article originally appeared in the Pioneer Press.