Xcel Energy (NASDAQ:XEL) on Thursday announced plans to develop long-duration storage systems at two retiring coal plant sites, part of an accelerating timeline for transitioning away from coal as a fuel resource.
The Minneapolis-based company has entered into definitive agreements with clean energy developer Form Energy to deploy its iron-air battery systems in a pair of pilot projects. Xcel said the storage technology will allow it to integrate more renewable energy into its system and maintain reliability as it continues to retire coal plants in the coming years.
“We are starting to get on a treadmill of shutting down our coal plants,” CFO Brian Van Abel told financial analysts Thursday during the company’s year-end earnings conference call.
The 10-MW/1,000-MWh multiday systems — capable of providing 10 MW of instantaneous power for up to 100 hours — will be installed at the Sherburne County Generating Station in Becker, Minn., and the Comanche Generating Station in Pueblo, Colo. Both projects are expected to come online as early as 2025 and are subject to regulatory approvals.
“Our partnership with Form Energy opens the door to significantly improve how we deliver carbon-free energy,” CEO Bob Frenzel said in a statement.
The company remains on track to reduce carbon emissions 80% by 2030 and to deliver carbon-free electricity by 2050, Frenzel said. Pursuing advanced storage opportunities will “balance” Xcel’s system needs.
Xcel said in October it would quit burning coal by 2031 when it retires the final Comanche plant. It plans to shutter the 1.1-GW Tolk Generating Station in West Texas in 2028, more than four years earlier than planned. (See Xcel Energy to Quit Burning Coal in 2030.)
The company reported earnings for the year of $1.74 billion ($3.17/share), up from 2021’s performance of $1.6 billion ($2.96/share). Earnings for the fourth quarter came in at $379 million ($0.69/share), compared to $315 million ($0.58/share) for the same period a year ago.
The quarterly earnings were on par with Zacks Investment Research’s consensus estimate; the quarterly revenues of $4.05 billion exceeded the Zacks estimate of $3.54 billion.
Xcel’s share price closed the week at $68.43, off just 13 cents from its pre-earnings close of $68.56.
