Xcel’s ‘Sherco Solar’ facility will reduce reliability, increase costs for Minnesota families and businesses

Xcel Energy has announced its plan to spend $575 million building a 460 megawatt (MW) solar facility in Becker, Minnesota, right next to coal plants they will be prematurely retiring.

By prematurely retiring the Sherco coal plants and replacing them with a 750 MW natural gas plant and 460 MW of solar, Xcel Energy will be reducing the amount of reliable electricity the company owns and drive up electricity costs for Minnesota families and businesses.

Recent blackouts in California, Texas, and the 14-state Southwest Power Pool show how vulnerable our electric grid has become. Unfortunately, Xcel’s decision to shut down their coal plants and build wind, solar, natural gas, and rely on electricity imports from the regional grid, the Midcontinent Independent Systems Operator, will only make our electricity supply less resilient in the face of adverse weather conditions.

Xcel currently owns about 1,879 MW of coal-fired power capacity at the Becker facility. The three coal units play a critical role in maintaining the reliability of Minnesota’s power grid when temperatures plunge and demand for natural gas for home heating soars.

Coal plants and nuclear plants offer important diversity and resiliency attributes that natural gas does not. Coal plants often have weeks or months of fuel stored on-site, and nuclear plants can hold enough fuel rods on-site to power the plants for 18 months.

Natural gas, in contrast, relies on pipelines that deliver the fuel to power plants just in the nick of time. This can potentially lead to natural gas supply disruptions if there are problems with the natural gas delivery system. Increasing our reliance upon natural gas makes our electric grid more vulnerable than it would be if we had more coal and nuclear power plants.

The diversity of the grid is also good for all energy consumers because as we saw in February, natural gas prices can spike, increasing the cost of heating our homes in winter, and also increasing electricity prices as the fuel used to generate an increasing share of America’s electricity supply becomes more costly.

Shutting down the coal plants will make Minnesota extremely dependent upon wind, solar, and natural gas power plants. The diagram below shows electricity generation by source in Minnesota in 2020 and compares it to a hypothetical day with low wind and solar output in 2035, when all the coal plants have closed.

As you can see, Minnesota would be putting 66 percent of our electricity eggs in the natural gas basket if we are overly reliant upon wind, solar, and natural gas in the future. Low wind speeds, snow-covered solar panels, and a failure along our natural gas supply chain could result in a Texas-like disaster.

Not only will the solar panels contribute little to the reliability of the grid, they will also drive up costs for Xcel Energy customers.

Using the cost per megawatt of installed capacity announced by Xcel and using U.S. Energy Information Administration assumptions for operating costs, the Sherco solar facility will probably produce electricity for about $51.96 per megawatt-hour (MWh), assuming a 19 percent capacity factor and 3 percent interest rates.

This is much more expensive than the cost of coal-fired power at Sherco, which produced electricity for $33.43 per MWh, according to 2018 data from the Federal Energy Regulatory Commission.

It’s also important to remember that the cost of power from the solar facility doesn’t include the cost of the natural gas plants needed to make sure lights don’t go out when the sun goes down, like what happened in California.

When other expenses are accounted for, like utility profits, increased property taxes, and the cost of “backup” power generators, solar is much more costly than existing power plants. There are many hidden costs of using wind and solar, even if their advocates, and Xcel Energy, would prefer to pretend otherwise.

In fact, Christopher Clark, Xcel’s president for Minnesota and the Dakotas, claims “The Sherco solar project will deliver more of the renewable energy our customers want while also keeping bills affordable for the long-term,” but this phrase is basically a lie because electricity prices will increase due to the solar installation, and they have been rising for years.

This is one of Xcel Energy’s favorite tricks. They never come clean on how their Green New Deals will impact customers. Instead, they pervert the meanings of words like “affordable,” and “low-cost,” while simultaneously planning to raise electricity prices by 20 percent over three years. But because these words are subjective, and therefore utterly meaningless, they can get away with it.

Minnesotans need reliable, affordable energy, but they won’t get it unless they turn up the political pressure on their elected officials and the Public Utilities Commission. One way you can do your part is to sign our petition demanding reliable energy by clicking here.