Xcel Energy announced a deal with state agencies to reduce the company’s carbon emissions reliance and meet the state’s greenhouse gas emissions and carbon-free electricity goals. 

Xcel Energy released its Upper Midwest Energy Plan on Feb. 20, which details its goals such as expanding wind and solar power in Becker and Oak Prairie, Minnesota. The plan also includes improving battery energy storage and extending the use of the state’s two nuclear plants. 

About 20% of Minnesota’s greenhouse gas emissions are from electricity generation, according to the Minnesota Pollution Control Agency. Other factors contributing to greenhouse gases in the state include transportation, agricultural work and industrial facilities. 

Xcel Regional Vice President of Planning and Policy Bria Shea said their clean energy goals with the state do more than just protect the environment; they also create jobs at new energy facilities and provide more affordable ways customers can receive energy for their homes. 

“We’re cleaning up the general environment for all of Minnesota. We’re also creating jobs that are not just in our service territory, right, for all Minnesotans,” Shea said. “The jobs, the clean air effort, certainly benefiting, I would say all Minnesotans, but probably even more so our own customers.”

Sydnie Lieb with the Minnesota Department of Commerce said the state goal of zero carbon emissions across the economy by 2050 is also something energy providers such as Xcel have to consider alongside the state mandate of 100% carbon-free electricity by 2040. 

The Department of Commerce, alongside the Public Utilities Commission and Legislature, created a resource plan for utility companies to follow to meet these goals. 

“The resource plan makes decisions on size, type and timing,” Lieb said. “How many new resources are needed? How many megawatts? What type of resources those should be? Then when those resources need to come on is the timing piece. That’s where we sort of look at what the clean energy goals are and mandates are for the state.” 

Signed into law by Gov. Tim Walz last year, the 100% carbon-free electricity by 2040 law establishes a standard for utilities to provide Minnesotans with carbon-free resources. The law requires utility companies to produce 80% clean energy in 2030, then increases every five years to reach 100% clean energy by 2040.

Research fellow at the University of Minnesota Matthew Grimley said clean energy mainly means energy sources that do not emit greenhouse gases such as carbon dioxide, methane and more.

Minnesota’s electricity grids were dominated by coal and nuclear power plants for decades before they transitioned into using natural gas power Grimley said. He added that these sources were so attractive despite any environmental concerns because they could be turned on and off at will during a power outage. 

“The goal of that grid, and even our smaller distribution grids, is to help balance out differences and like what’s producing where,” Grimley said. “It’s always been true that we have balanced out these different power plants with each other.”

Under the state’s current energy goals, coal and natural gas use would transition into more clean energy use, such as solar, wind and battery storage, Grimley said. 

Lieb said in addition to clean energy sources, the goal is to make the energy grid more reliable by supplementing other energy sources when wind and solar energy do not fill the gaps.

Outside of their clean energy and carbon-free goals, Shea said a top priority is meeting customers’ energy needs by increasing use of energy sources like battery and nuclear to fill in gaps in wind and solar energies when needed. Xcel does have natural gas plants for critical need moments when clean energy options are unavailable. 

“Our top priorities are maintaining our system that is not only meeting the carbon-free goals of Excel and the state,” Shea said. “But certainly keeping the system safe and reliable and affordable so that our customers can continue their expectations that we provide them electricity 24 hours a day, seven days a week.”

Grimley said a main part of Xcel’s goal is to meet the energy goals outlined by the Legislature, Minnesota Department of Commerce, Public Utilities Commission and green energy advocacy groups. The process came around during the 1970s global oil crisis, Grimley said, and now it aims to predict energy needs and create energy goals. 

“It’s a really complicated process,” Grimley said. “You have like the attorneys general, clean energy organizations participating, labor organizations participating. Everybody is trying to give input on what they think is the best way to go forward on this.” 

The most important and recent commitment Xcel made with the state is the 100% carbon-free electricity by 2040 requirement, Shea said. 

“We were supportive of that when it was passed a few years ago because that is largely consistent with our own internal goals at Xcel Energy,” Shea said. “We were the first utility to announce our intentions to be carbon-free by 2050. We did that several years ago.”

Because of the goals set by the state to have 100% carbon-free electricity by 2040, and to have net zero carbon emissions by 2050, Lieb said the Department of Commerce has worked closely with utility companies like Xcel to improve home-grown energy sources like solar and wind in the state. 

“Having a lot of wind and solar on the system allows us to bring down the overall cost of energy, which is really important to our direction to have affordable, reliable, clean, equitable energy for the state,” Lieb said. 

Shea said it is important to always consider these clean energy goals as Xcel is ending its coal production, which serves a significant portion of its customers. As Xcel removes a reliable and long-used energy source like coal, Shea said it is necessary to think of how renewable energy sources can supplement the energy need. 

“Looking to new technologies to supplement that, and in particular, to meet the state’s goals, will be critical to continue keeping our system safe, reliable, and affordable,” Shea said. “So certainly that’s an important part of the future.”

Ultimately, Grimley said these goals are important because average global temperatures have increased by one and a half degrees Celsius between February 2023 and January 2024, which negatively impacts public health and the environment. He said clean energy can not only make energy production more sustainable, but it can also create new jobs. 

“At least really exciting for me because that wasn’t necessarily possible with big coal plants in the past or anything like that,” Grimley said. “It really does open up a whole new line of equity and benefits and participatory decision-making for communities that the old fossil fuel infrastructure necessarily didn’t have.”