More than 100 people attended the Xcel Community Breakfast Wednesday morning at the Monticello Community Center to get an update about current and future projects that will affect the community. 

 

 

The main focus was the future of energy in the area, especially the future of the Sherco plant in Becker.

 

Chris Clark, president of Xcel Energy in Minnesota, South Dakota and North Dakota, said Xcel is in the midst of a major transition, with the proposed closure of Sherco Unit 2 in 2023 and Unit 1 in 2026.

“We’re trying to do that in a way that is respectful to the communities who have hosted us,” he said.

 

Xcel has filed a resource plan that includes not only closing Sherco 1 and 2, but includes converting some of the energy to natural gas and renewable energy sources.

 

Currently, the energy produced by Xcel comes from a diversified mix. About 25% comes from nuclear; 34% coal; 15% natural gas; 14% wind; 7% hydroelectric and 3% biomass.

 

Clark said by 2030, Xcel intends to produce 63% carbon-free electricity. Not only will coal use drop to 15%, natural gas wil provide 22% of energy, solar will be 8% and wind generation will jump significantly to 25%.

 

“We’re taking advantage of federal tax credits that were extended last year. It really means that wind is “on sale” for purposes of adding it to our portfolio,” he said. “We have seen a definite maturing of the wind industry. Towers have gotten taller. Blades have gotten longer, wind turbines have gotten much better.”

 

Ron Brevig, Sherco plant director, said the transition from coal to gas will be significant, but it will work. He said Xcel has done similar conversions at the Riverside and High Bridge plants in the Twin Cities.

 

“It’s not like we haven’t done this before,” he said.

 

Brevig said the two coal units would be replaced with a two-on-one combined cycle gas system.

 

“That means there are two combustion turbines - basically jet engines, that fire on combined cycle gas. The exhaust heat from those engines goes through a heat recovery steam generator, then it’s fed to a single steam turbine,” he said. 

 

“We know how to do it well. In fact, the project manager from Riverside is now the engineer manager at Sherco, so we’re set up. All we need is regulatory approval.”

 

Brevig said since the clean energy campaign started, many coal plants have closed. But the price of coal is rising.

 

“You would think with coal plants in the U.S. closing, it would drive the price of coal down. We’re not seeing that at all,” he said. “A lot of coal companies and mines want to increase their price to keep their profit margins.”

 

With the price of coal increasing, it is approaching the price of natural gas. So there is even more incentive to do the transition.

 

“It’s going to be very competitive and actually beat the price of coal,” said Brevig.

 

Clark said Xcel is still the largest property taxpayer in the state and spends more than $692 million on supplies in Minnesota. It has about 5,500 employees in the state and works with about 3,000 contractors.

 

He said Xcel is committed to helping communities thrive. Keeping the new natural gas plant in Becker is one example.

 

“We know the impact of closing Sherco 1 and 2 is going to eliminate jobs in Becker and we want to do our part and bring new businesses to the community,” he said. 

 

“We’re actively working with the communities of Becker, Monticello, St. Cloud and all of Central Minnesota to help spur economic development.”

 

Xcel will know more about how regulators view their plan next week when they meet with the Public Utilities Commission.