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. 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. 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 program Public Service Industry-leading voluntary Company of emission reductions projects Colorado Gas Customers 1.9 M Electric Customers 3.4 M Southwest Public Service Company
- 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. Balanced Fuel Portfolio Keeps Costs and Risks Down 4
- 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. Wind Capacity Additions thru 2012 Wind Capacity on the NSP System 2000 1500 MW 1000 500 0 2006 2007 2008 2009 2010 2011 Proj 2012 Year
- 8. Nuclear Facilities License Extensions Monticello Plant Prairie Island Plant Extended to 2030 Extended to 2033/34
- 9. Potential 2025 NSP Energy Outlook Other Renewables 4% Wind 20% Natural Coal Gas 16% 32% Nuclear 28%
- 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. 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. 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. 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. E.g. – Pipeline Infrastructure