Brief

Xcel CEO: Wind is a better long-term buy than natural gas

Dive Brief:

  • Wind energy's current 20-year power purchase agreement price of $25/MWh beats the projected average of $32/MWh price for natural gas over the same time period, according to Xcel Energy CEO Ben Fowke.
  • Fowke said Xcel does not expect natural gas, presently at an historic low of below $2.50 per MMBTU, to remain at that price indefinitely. The utility plans to invest in 1,600 MW of new wind capacity over the next 15 years as a hedge against natural gas price volatility, Fowke said.
  • On Oct. 2, Xcel set a single-day record for wind energy electricity generation on its Colorado grid by supplying an average of 54% of its customers’ electricity over the course of the entire day.

Dive Insight:

Xcel set a one-day wind energy generation record early this month. On Oct. 2, more than half of Xcel's system's electricity was generated by wind power for almost every hour. The utility also set a new one-hour record for wind energy output that day with 2,352 MWh, outpacing the record reached in 2014 of 2,203 MWh.

The utility's move to increase its wind capacity 20% by the end of 2016 aligns with a goal to cut 60% of its emissions by 2030.

In setting the one-day wind energy generation record, over 50% of the Xcel system’s electricity was generated by wind power every hour of the day except the last one, during which it met 49% of load. 

The utility is planning to use wind to replace coal plants being retired to meet EPA pollution regulations. Xcel's plan bucks the trend being set by other U.S. utilities moving to natural gas to meet EPA regulations.

Filed Under: Generation Solar & Renewables Corporate News
Top image credit: Flickr; germanborrillo