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Xcel Energy proposes ‘all of the above’ resource plan for Upper Midwest

The utility – still planning an exit from coal by the end of 2030 – wants to extend the lives of its Prairie Island and Monticello nuclear plants.
Xcel Energy proposes ‘all of the above’ resource plan for Upper Midwest
(Monticello Nuclear Generating Station. Source: Xcel Energy.)

Xcel Energy has proposed a resource plan for its Upper Midwest region that calls for extending the use of the utility’s two nuclear plants while adding more wind and solar energy, battery storage, and firm peaking capacity in the form of new combustion turbines.

The plan, submitted to Minnesota utility regulators, details proposed steps and resource additions to be added during the 2024-2040 time period.

Reliability is important as Xcel plans to exit coal by the end of 2030 – a reduction of approximately 2,400 MW through the retirements of Sherco Unit 1 in 2026, King in 2028, and Sherco Unit 3 in 2030. In that same time, 1,700 MW of PPAs, the majority for natural gas generation, are set to expire between 2025 and 2028.

Xcel Energy is notably proposing to extend the operating life of its two Prairie Island Nuclear Generating Plant units by 20 years, to 2053 and 2054, and the Monticello Nuclear Generating Plant by 10 years, to 2050. This would match the 20-year life-extensions the utility is working to obtain from the Nuclear Regulatory Commission (NRC).

The company also proposes extending the lives of its Refuse Derived Fuel (RDF) waste to energy generating facilities.

What Xcel calls its preferred plan includes additions of 3,200 MW of wind generation, 400 MW of utility-scale solar generation and 600 MW of standalone storage through 2030.

The utility said the Inflation Reduction Act (IRA) unlocked a projected $5.7 billion in additional federal tax incentives for its utility-scale renewable and storage resource additions. Xcel said it anticipates additional cost savings from the IRA for its existing renewable and nuclear resources.

Xcel Energy is proposing to add more than 2,200 MW of firm capacity resources to back up renewables and supply power during peak demand on the hottest summer days and coldest winter nights. The utility notes some of this could come through extensions of current PPAs.

Source: Xcel Energy’s Integrated Resource Plan Summary of Proposal.

“We have modeled these firm dispatchable additions as combustion turbine resources that are relatively low-cost to build, do not operate for much of the year, and in the future, could run at least partially on clean fuels like hydrogen,” the company said in filings to Minnesota regulators.

The utility said these gas plants are “designed operate only 5-10 percent of the year.”

Xcel noted it is also examining advanced technologies such as new battery chemistries, advanced nuclear reactors and hydrogen. As new technologies mature, the utility said it would include them in its resource planning.

MORE: Xcel Energy to add multi-day battery storage at two retiring coal plants

Like other areas in the country, Xcel projects increased electricity demand. Its case forecasts now anticipate average annual growth rates of 1.8 percent in peak demand and 2 percent for the utility’s energy forecast over the 2024-2040 planning period.

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