Xcel Energy's Record-Low Renewable Bids Signal Coal's Decline
Xcel Energy, led by CEO Ben Fowke, is committed to reducing its carbon footprint in a cost-effective manner. The company's recent bids for new projects reflect this, with wind and solar prices reaching record lows.
In June, Xcel Energy's bids for new projects saw wind power priced at $11-$18 per megawatt-hour and solar at $23-$27 per megawatt-hour. This trend is driven by the increasing affordability of renewable energy sources.
The shift away from coal is evident nationwide. Between 2018 and 2022, at least 19.8 GW of coal-fired power plant capacity is set to go offline. American Electric Power Company Inc. has already retired 7,200 MW of coal-fired power since 2011 and is considering retiring another 1,600 MW plant in Conesville, Ohio. In 2018 alone, US utilities will retire 11.4 GW of coal-fired power plant capacity.
Xcel Energy's median bids for wind-plus-storage and solar-plus-storage projects in January were $21 and $36 per megawatt-hour, respectively. This demonstrates the growing competitiveness of renewable energy projects with traditional fossil fuel sources.
The decline of coal is significant. Its share of US electricity production has fallen from over 50% in 2007 to 30.1% in 2017. Since 2010, nearly 40% of the US coal-fired power plant capacity has been shut down or designated for closure. Utilities are moving away from coal due to broader market and financial trends, making coal less attractive for long-term investments despite political support.
Xcel Energy's plans to retire two coal-fired units in Colorado and add 1,800 MW of renewable power and 275 MW of battery storage reflect the company's commitment to reducing its carbon footprint. The trend towards renewable energy is driven by cost-competitiveness and market trends, with coal's share of electricity production continuing to decline.
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