Ben Fowke, chairman, president and CEO of Xcel Energy, spoke about the company's carbon-free vision on Nov. 1 as part of the St. Thomas Alumni Association’s 29th annual First Friday Speaker Series.
A major U.S. electricity and natural gas company, Xcel Energy serves 3.6 million electricity customers and 2 million natural gas customers through its regulated operating companies.
Here are five observations from Fowke’s talk before students, alumni and friends of St. Thomas at James B. Woulfe Alumni Hall on the St. Paul campus.
1. A carbon-free vision is the new insurance policy for our society's future.
When Fowke spoke at the St. Thomas Minneapolis campus seven years ago, he projected that by 2025 coal would make up 38% of the company's energy supply in the Upper Midwest and 13% would come from wind. Today, seven years later, Xcel Energy's projections for 2025 have almost completely flipped: Coal will account for 14% and wind will supply 33% of the company's energy in the Upper Midwest. “A lot has changed since then,” Fowke said. The company has developed a new focus on clean energy that headlines its future. In 2025, nearly 50% of the company's energy will come from wind and solar-powered plants, Fowke said. “By 2030 we won’t have any coal in our system,” he added.
With the “ozone layer front and center” during the environmental crisis in the 1980s, the Reagan administration convinced the United States to secure an “insurance policy in case those scientists were right,” he said. “I can tell you today we can take out that insurance policy and it’s not going to cost us much at all.”
2. Reducing carbon emissions is good for the environment and your pocketbook.
For the past 13 years Fowke helped Xcel Energy to become the largest wind provider in the country. Wind and solar panel plants, in particular, have allowed the company to be on a path of 38% carbon reduction with a goal by 2025 of 60% carbon reduction.
“The really neat thing about it is [this] technology is actually going to save customers money in addition to helping reduce carbon emission,” he said. When looking at the levelized cost of wind farms the wind energy is cheaper than the fossil fuel plant price. “And that’s despite the natural gas price being at all-time lows,” he explained.
Xcel Energy Chairman, President and CEO Ben Fowke talks with First Friday luncheon emcee Don Weinkauf, dean of the School of Engineering. (Jamie Tjornehoj/University of St. Thomas)
3. While renewables are vital, they can't be the only source of energy.
“If I were talking to you 10 years ago, I would be talking to you about buying wind at $60-70 a megawatt hour. Today I am talking to you about buying wind for less than $20,” he said.
As “sunny Minnesota” continues to embrace new technology, Xcel Energy has noticed large-scale solar is “much more efficient,” not to mention the low fee of $40 a megawatt hour, Fowke said.
However, "We all connect to the big grid," he said. Fowke added that the big grid can't absorb more than 60-70% renewable energy. After that, a steep cost in the operational curve happens. "So, to my mind, the goal is 100% carbon-free, not necessarily 100% renewables."
4. Climate change is a risk and we need to address it.
Although the response was mainly positive regarding the company’s carbon-free vision, the energy community asked, "Why?" Fowke replied, “If you look at what climate scientists are telling us, the picture is not getting rosier ... It’s getting worse,” he said.
With the ongoing debate regarding the reality of global warming, Fowke continued, “It’s really hard for me to say, but you can’t say it’s not a risk at all.”
As Fowke looked around the crowded hall, he asked, “How many people here would like to see us do this?” Every hand was raised. With a chuckle Fowke rephrased, “Maybe I should have asked the opposite .. [Is there] anybody who doesn’t want to see us do this?” Laughter erupted around the room.
Not only is Fowke influencing the progressive switch to clean energy, but Xcel Energy is paving the way for an environmentally friendly sector: Upon the company’s announcement of their carbon-free vision six other utilities in the nation are following suit, “and there’s more coming,” he promised.
5. Public policy really matters.
When diving into the influence of public policy, “Scientists will tell you what you can do, economists will tell you what you should do, [and] your legislators and regulators [will] tell you what you will do,” he said. “We have to get all of that right because public policy really matters."
The secret to a successful transition into clean energy has to do with affordability and reliability, Fowke said. Without these elements, Xcel Energy “will not have the opportunity to rectify our sectors” and the ability to make this transition successful will ultimately be a challenge, he added.
“My ask of policymakers is, let’s not make one person’s choice be paid by others,” he said.
Referencing inventor Thomas Edison, an important image of perseverance in the face of adversity, Fowke quoted, “Vision without execution is nothing more than a hallucination.” To achieve Xcel Energy's 100% carbon-free goal by 2050, the company plans to increase its wind use to 55% by the end of 2021, “exit all coal by 2030,” as well as increase its renewable energy by 5,000 megawatts, he said.
“While 2050 is a little way off, if we don’t get started now, we won’t get there,” he added.
