Xcel Energy XEL announced that it will submit a proposal that includes a plan to shut down two coal plants inthe Upper Midwest region to the Minnesota Public Utilities Commission in July.The company intends to reduce carbon emissions by 80% compared with 2005 levels.
The goal of the company is to retire its coal units a decade earlier than previously planned. If approved, the plan will enable Xcel Energy to provide 100% carbon-free electricityto customers by 2050.
Addition of Renewables
The company has plans to close its coal plants in Upper Midwest and replace the production with electricity generated from the renewable sources. By 2022, the company intends to add 1,850 megawatt (MW) of new wind and supply 30% of customer’s energy from green sources.
Post 2030, the company aims to add 3,000 MW of new solar generation to portfolio and supply more than 30% of customer’s energy from green sources.
The addition of wind and solar energy in existing system will offset the decline in generation stemming from planned closure of two coal units.
Xcel Energy is focusing on the steel-for-fuel initiative that enables the addition of renewables and reduces bills. Nearly 3,000 MW of new wind has received regulatory approval and construction is underway. In Colorado, the commission approved Certificate of Need for Cheyenne Ridge wind farm. Hale project in Texas is on track with construction and expected to be completed on time as well as within budget in June.
The Sagamore project in New Mexico and the Crowned Ridge III project in Minnesota are expected to initiate construction later this year. All other wind projects are in various stages of permitting and construction is expected to be completed in the 2019-2021 period.
Renewable Energy Replacing Fossil Fuel
Dependency on fossil fuel, primarily coal, has gradually declined in the past few years. The need for an emission-less environment is driving the industry toward renewable energy. Per an Energy Information Administration (EIA) report, all renewable sources of energy that include wind, solar and hydropower will produce 18% of U.S. electricity in 2019 and almost 20% in 2020.
Utilities and corporations are also shifting their focus to renewables and other clean sources to generate electricity. Utility companies like WEC Energy Group, Inc WEC, NiSource NI and Ameren Corporation AEE are focusing on renewable sources to add more clean generations in their production portfolios.
Zacks Rank & Price Movement
Xcel Energy has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past 12 months, shares of Xcel Energy have rallied 33.6% compared with the industry’s rise of 15.1%.
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