Xcel Energy

Xcel’s scope 1 and 2 targets are some of the most ambitious in the sample with an 80% reduction by 2030 and net-zero by 2050. Although its 2030 target is aligned with the IEA’s Net-Zero Emissions scenario, this scenario also requires advanced economies to fully decarbonise their power generation by 2035. Xcel’s 2050 target is not yet aligned with this level of ambition, but the company is well placed to be one of the first U.S. based utilities to achieve it.

Xcel has demonstrated climate leadership among U.S. based electric utilities, but this leadership will be undermined if the company maintains some coal capacity until 2040 and gas beyond that date. The IEA has stated clearly in its net-zero scenario that advanced economies must phase out unabated coal by 2030 and fully decarbonise power generation by 2035. To maintain its leadership Xcel should commit to these phaseout dates.

Xcel discusses the necessity for research and development (R&D) and the lack of technological solutions for long term storage and replacing baseload capacity. There is limited evidence that the company invests in R&D for low-carbon innovations but there is no detail on actual R&D spend. Improving its disclosure in this area would increase Xcel’s alignment with openness and best practice climate reporting requirements.

Xcel was the first U.S. electric utility to commit to net-zero and has a target to reduce 2005 emissions with 80% by 2030. Xcel will close or convert all but two of its coal plants by 2030 and is reducing use of some gas assets. Xcel is aiming for 60% renewables generation by 2030.

Xcel has a Steel for Fuel strategy which replaces fossil fuelled generation with renewables. The company plans on closing coal capacity early and increasing renewables through own investment and power purchase agreements.

Xcel is attempting to extend the life of its single nuclear plant and is adding nearly 2 GW of wind which will start generation in 2022. Xcel issued a TCFD report for the first time in 2020. The company recently amended its plans for a new gas plant at Sherborne and is building lower emitting peaker plants instead.

In 2020 Xcel achieved its largest annual decline, reducing carbon dioxide emissions 12% compared to 2019 levels.

Xcel’s plans and actions are generally consistent barring its long-term reliance on gas. With one of the oldest coal fleets in the world, Xcel plans to close most by 2030. Improving technology and grid resilience increasingly render new natural gas baseload capacity unnecessary. Pursuing gas risks undermining Xcel’s climate leadership.