Xcel Energy's Resource Plan Criticized for Omission of Combined Heat and Power (CHP) Implementation

The Minnesota Public Utilities Commission has issued a document criticizing Xcel Energy's Upper Midwest Resource Plan 2016-2030 for its failure to include implementation of combined heat and power (CHP). The document highlights the potential for CHP to reduce fossil fuel use and greenhouse gas (GHG) emissions by recovering heat that is usually rejected in power plants. According to a 2014 study, Minnesota power plants were only 33% efficient, throwing away two-thirds of the fuel energy as heat. CHP systems can achieve efficiencies of 70% or higher, compared to the 35% efficiency of simple cycle combustion turbines.

Key Takeaways:

• The Xcel Energy Upper Midwest Resource Plan 2016-2030 fails to include implementation of combined heat and power (CHP), despite identifying over 300 MW of economic CHP potential.
• CHP systems can reduce fossil fuel use and GHG emissions by recovering heat that is usually rejected in power plants.
• A 2014 study found that Minnesota power plants were only 33% efficient, throwing away two-thirds of the fuel energy as heat.
• CHP systems can achieve efficiencies of 70% or higher, compared to the 35% efficiency of simple cycle combustion turbines.
• The inclusion of CHP in the Xcel Energy Resource Plan could reduce running hours for Sherco, thereby reducing energy consumption, GHG emissions, and air pollution.
• A study undertaken for the Minnesota Department of Commerce in 2014 found that when CHP is put on a level playing field relative to Weighted Average Cost of Capital (WACC), it can deliver competitive economic performance and outstanding environmental performance.

Statistics:

• 33%: The efficiency of Minnesota power plants in 2012.
• 340 trillion Btu: The amount of heat energy that power plants in Minnesota threw away in 2012.
• 300 MW: The amount of economic CHP potential identified by Xcel Energy.
• 70%: The efficiency of CHP systems.
• 35%: The efficiency of simple cycle combustion turbines.
• 2014: The year a study was undertaken for the Minnesota Department of Commerce.
• 80%: The goal for reduction in GHG emissions by 2050 set by Minnesota.

Sources:

• Comments of the International District Energy Association on the Xcel Energy Upper Midwest Resource Plan 2016-2030 Submitted electronically July 2, 2015 by Mark Spurr, Legislative Director.
• "Minnesota Combined Heat and Power Polices and Potential," FVB Energy Inc. July 2014. Contract 67922.
• "Technical and Economic Potential for DG and CHP Applications in Xcel Energy's Minnesota Territory," Oct. 2014.