Xcel’s move to replace coal with solar, fueled by tax incentives, raises concerns about the economic feasibility and the impact on energy reliability in the long run.
QED: A Minnesota Utility Is Swapping Coal for Solar. It’s Like Taking 780,000 Cars Off the Road.
Xcel also announced last year that it was planning to replace another retiring coal plant in Minnesota with some 650 megawatts of new solar capacity, which it says can supply about 130,000 homes with electricity every year. That plant is scheduled to retire in 2028.
It’s a trend that Richardson expects will accelerate in the coming years as utilities and local governments take advantage of generous tax incentives included in the Inflation Reduction Act—President Joe Biden’s cornerstone climate law. Utilities like Xcel can receive upwards of 70 percent of their investments back through tax credits, Richardson said, so long as they meet a number of requirements, including paying employees the prevailing wages. Developers can slash 10 percent off the cost of their clean energy project, he said, just by building it in a city where a coal plant or mine has been closed.
It’s worth noting, however, that the economic trade off isn’t equal, Richardson added. Coal plants and other fossil fuel facilities, by the nature of how they operate, employ far more people than solar and wind farms, he said, meaning many career coal workers will still have to find other work and likely need retraining.
When magical thinking meets a polar vortex cold, hard reality follows.
h/t Ed Driscoll
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