E3 Study Conclusions give clue on Xcel's Energy Plan

Xcel Energy has teamed up with a research organization called E3 to model 18 different scenarios for our long-term energy future. Xcel hired E3 to help them craft their 15-year Integrated Resource Plan (IRP), which Xcel Energy has a July 1st deadline to release.



On April 17th, E3 presented the study conclusions to a room of Xcel Employees and stakeholders who are closely following Xcel’s integrated resource planning process.     See Full slideshow here


Xcel will release a sneak preview of the 15-year plan the company prefers on May 20th which will provide us with some new updates. But until then, here are the Main Takeaways from E3’s April 17th presentation:   (Below )



  • COAL


 E3’s data concluded that the most cost-efficient action way to meet climate goals is to retire coal plants early. It also found that the Energy generated from existing coal plants “can be replaced at a relatively low cost with a portfolio of efficiency, renewables, storage and natural gas”.

  • This is non-controversial across a wide range of stakeholders as utilities are already moving away from coal (due to rising cost and carbon issues) and coal plants (due to aging infrastructure)
  • Placing this as their opening conclusion felt like a way to quickly get climate activists both on their side and lulled into a false sense of security.
  • One of their next key conclusions is that “meeting all reliability needs by a combination of wind, solar, and storage will require “prohibitively large” investments”.




 Their E3 study considers nuclear power to be an essential part of a “least-cost pathway” toward deep emissions reductions. This hints that Xcel is likely ask to re-license both of their MN nuclear plants in the 2030’s in the name of meeting 2050 greenhouse gas emissions reduction goals while also ensuring reliability.



  Their presentation appears to recommend that saying no to new Natural Gas plants (or gas conversions of old coal plants like Sherco) would increase the costs of decarbonization. ($21 vs $40 (just adding Sherco scenario) vs $54 (no new gas scenario)


  • Their study concluded it to be necessary to keep Natural Gas plants on the system in case there are at times when wind, solar and demand response can’t provide effective capacity, but not to operate gas plants at high capacity long-term as baseload power.

Main Concerns:


The main concern about the April 17th presentation was that it cherry picked the conditions utilized to pad their assumptions and to support conclusions Xcel apparently already favors. The presenter quite clearly stated several times that we would need natural gas for cost effectiveness. But the only scenario he showcased for “no new gas” was the most extreme example (out of three) and then tried to use that to claim “no new gas” in general doubles the cost of carbon abatement ($21 vs $40)


  • The “No New Gas” scenario was only presented in conclusions as condition 9 (which also contained no nuclear re-licensing). Meanwhile conditions 7 and 8 which contained some nuclear re-licensing options were obviously more cost effective than condition 9, but they were somehow not presented at all.
  • The Nuclear Re-licensing scenarios included only new gas scenarios and thus were found to be even more cost-effective than the $21 per ton of decarbonization. But in this case Condition 9 was not mentioned.
  • These demonstrate a bias in the presentation, and since this bias directly links up with the known desires and plans of their employer Xcel Energy, this begs addition scrutiny.


  • Speaking of natural gas, the Mankato Energy Center purchase is considered a baseline assumption of all of the data and conclusions of this E3 report, yet the rest of Xcel’s IRP up to that time avoids mention of it (which may soon change to Xcel’s credit).
  • The focus on nuclear power seems to be a way to avoid more robust investment in renewables. The scenarios they used to make a point in favor of nuclear power also include full new gas investments. Nuclear Power Plants are not very compatible with wind and solar energy because they can’t change their output quickly like natural gas plants can. See this video for an illustration: https://www.youtube.com/watch?v=deWtgpheDJM&t=154s   Thus, a key question to ask is the extent to which investing further ratepayer dollars into nuclear comes at an opportunity cost to further renewable energy penetration.  
  • It is good to take a look at the resource mixes on the slideshow behind these condition scenarios. A weak point of the study were the assumptions presented in those graphs (especially pertaining to wind and storage quantities). One of these assumptions was a 160% of load buildout overage requirement for near-all renewables conditions, something which deploying energy storage should lessen significantly. E3 concedes that they don’t have a competent grasp on the contribution that energy storage brings for reliability (nor the “value” to Xcel for limiting redundancy necessary for renewable builds to meet load).

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