Clean Energy that Works for Minnesota                 EI Policy Forum:    Natural Gas and Minnesota’s Energy Future       ...
Xcel Energy                                               No. 1 wind energy provider          Northern States            ...
Natural Gas Forecasts: 2007 vs 2012$12      Cost per MMBtu$10 $8                         2007 Forecast $6 $4              ...
Balanced Fuel PortfolioKeeps Costs and Risks Down                             4
Changing Power Supply
Three R’s – Retire, Retrofit, Repower                  Black Dog, Unit 1 and 2 (2001)         Retire 176 MW of coal gener...
Wind Capacity Additions thru 2012                   Wind Capacity on the NSP System     2000     1500MW     1000      500 ...
Nuclear Facilities License Extensions   Monticello Plant   Prairie Island Plant   Extended to 2030   Extended to 2033/34
Potential 2025 NSP Energy Outlook    Other  Renewables      4%                   Wind                           20%       ...
Benefits of A Balanced ApproachMore flexible, reliable system operationally  Modern generation replacing older  Better ...
Benefits of Early Action                  Annualized Future Env. CapEx                      for Utility Coal Fleet  $/MWh ...
NSP GHG Reductions from MN Programs                                                                             ...
Potential Concerns“Shale Gale” effect   Prices other resources out of the market     Wind, Nuclear, Coal, SolarOver-re...
E.g. – Pipeline Infrastructure
Policy Forum Series: Bull - Clean Energy That Works For Minnesota
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Policy Forum Series: Bull - Clean Energy That Works For Minnesota

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Policy Forum Series: Bull - Clean Energy That Works For Minnesota

  1. 1. Clean Energy that Works for Minnesota EI Policy Forum: Natural Gas and Minnesota’s Energy Future September 21, 2012 Mike Bull, Manager Public Policy & Strategy
  2. 2. Xcel Energy  No. 1 wind energy provider Northern States  No. 5 in solar additions Power Company Northern States  Largest green pricing Minnesota Power Company program (Windsource) Wisconsin  4TH largest DSM programPublic Service  Industry-leading voluntary Company of emission reductions projects Colorado Gas Customers 1.9 M Electric Customers 3.4 MSouthwest PublicService Company
  3. 3. Natural Gas Forecasts: 2007 vs 2012$12 Cost per MMBtu$10 $8 2007 Forecast $6 $4 2012 Forecast $2 $0 2012 2016 2020
  4. 4. Balanced Fuel PortfolioKeeps Costs and Risks Down 4
  5. 5. Changing Power Supply
  6. 6. Three R’s – Retire, Retrofit, Repower Black Dog, Unit 1 and 2 (2001) Retire 176 MW of coal generation Replace with 315 MW of Natural Gas Combined Cycle (NGCC)Retrofit Retire MN Emissions Reduction Project (2007-2009)Anchor Aging, Coal Retrofit King Plant (550 MW) Inefficient Units Retire High Bridge and Riverside coal units (656 MW) Coal Units Construct new NGCC plants at High Bridge and Riverside (1035 MW) Black Dog, Units 3 and 4 (Proposed 2015) Retire two units (253 MW)
  7. 7. Wind Capacity Additions thru 2012 Wind Capacity on the NSP System 2000 1500MW 1000 500 0 2006 2007 2008 2009 2010 2011 Proj 2012 Year
  8. 8. Nuclear Facilities License Extensions Monticello Plant Prairie Island Plant Extended to 2030 Extended to 2033/34
  9. 9. Potential 2025 NSP Energy Outlook Other Renewables 4% Wind 20% Natural Coal Gas 16% 32% Nuclear 28%
  10. 10. Benefits of A Balanced ApproachMore flexible, reliable system operationally  Modern generation replacing older  Better able to respond to load & supply changesSignificantly reduced emissionsReduced risks and costs:  Operational, financial, regulatory
  11. 11. Benefits of Early Action Annualized Future Env. CapEx for Utility Coal Fleet $/MWh $6.00 $4.85 $5.00 Range $4.00 For $3.00 Peer $1.95 Utilities $2.00 $1.00 $0.59 $- NSP Peer Coal Peer Coal Utility: Low Utility: High 11
  12. 12. NSP GHG Reductions from MN Programs  Emissions without state  clean energy programs     Emissions with state Renewables • Mandate began in 2007, 30% by 2020 clean energy  programs Energy • Began in the 1990’s, with DSM spending Efficiency requirement based on revenues  • DSM standard of 1.5% of total retail sales enacted in 2007  Coal Retirements • Metropolitan Emissions Reduction Program, Black Dog                  12
  13. 13. Potential Concerns“Shale Gale” effect  Prices other resources out of the market Wind, Nuclear, Coal, SolarOver-reliance, exports, etc. could increase price and volatility  “Back to the Future”?Electric-Natural Gas “Harmonization”
  14. 14. E.g. – Pipeline Infrastructure

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