Xcel EnergyXEL made an appeal to the Colorado Public Utilities Commission ("PUC") for approval for the retirement of two coal power plants in Pueblo, which have a combined capacity of 660 megawatts ("MW"). Projecting higher demand in Denver metro-area in the coming years, Xcel Energy is planning to generate power from natural gas and wind as well as solar projects. The operations will be jointly owned by the the company and a third party.
Xcel Energy plans to purchase 707 MW of solar power and 1,100 MW of wind power from third-party owners, subject to the approval of PUC. Xcel Energy intends to shut down coal units and replace them with clean generating sources, which will involve an expenditure of $2.5 billion, which will enable customer to save $215 million.
Motive of the Proposal
Xcel Energy generates electricity through coal, natural gas, nuclear, other renewable, solar and wind energy sources. The company is planning to lower emission and is on track to reduce carbon emissions by 60 % by 2026 from 2005 levels.
The company expects to generate nearly 55% of its electricity from renewable energy sources by 2026. Moreover, for emergency purpose the company also proposed to have three large scale battery projects to save powers on the grid. Two of these battery projects will be located in Pueblo.
Renewable Energy Replacing Fossil Fuel
Over the last few years, dependency on fossil fuel is gradually declining. The U.S. coal industry has faced stringent environmental regulations. The need for an emission-less environment is pushing the industry toward renewable energy. Coal is the primary source of greenhouse gas emissions and thus Utilities are shifting to renewables and other clean sources to generate electricity.
Per Energy Information Administration, wind generation will account for 6.4% and 6.9% of total utility-scale electricity generation in the United States in 2018 and 2019, respectively, up from 6.3% in 2017. Solar electricity generation was 211 gigawatt-hour/day (GWh/d) in 2017, which is likely to increase to 246 GWh/d in 2018 and 294 GWh/d in 2019.
In the last three months, shares of Xcel Energy have lost 1.3%, narrower than the industry 's decline of 2.4%.
Zacks Rank & Other Stock to Consider
Xcel Energy has a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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