It’s a privilege to work in the energy business, alongside people who are committed to keeping the lights on every day, while also rolling up their sleeves to tackle tough challenges like protecting our environment. Since the U.S. pulled out of the Paris climate accord several weeks ago, at a time when federal carbon emissions rules have been put on hold, there have been many questions around where Xcel Energy stands and what happens next.
The fact is that Xcel Energy has been pursuing a clean energy strategy that would have met these federal and international standards — and we’re not wavering from that path. Our approach and plans are based on the needs and interests of customers and communities we serve, sound economics, and prudent risk management. Our stakeholders expect us to take action to reduce our emissions while keeping customers’ bills low, and we are doing just that.
Power companies like Xcel Energy are leading the way toward a clean energy future. As an industry, electric utilities already have reduced carbon emissions by 25 percent since 2005. The Paris agreement would have required a reduction of 26 to 28 percent by 2025. Our industry is reducing carbon emissions and doing so 10 years in advance of international agreements.
All CEOs are proud of their companies, and I am no exception. Last year, Xcel Energy achieved a 30-percent reduction in carbon emissions, and we are on track to reduce our emissions by 45 percent by 2021 companywide. Our reductions are the result of remarkable changes in how we produce energy. Back in 2005, 9 percent of our energy came from renewable sources. In 2016 it was 25 percent, and by 2021 we project it will be more than 40 percent.
Xcel Energy has been the nation’s No. 1 utility wind provider for a dozen years, and we plan to continue to hold that title. Our recent announcement of 3,500 megawatts of additional wind generation to come online by 2020 is making our projections real.
But renewables alone are not enough. We support energy efficiency through a variety of programs, available to all types of customers, and we continue to transform our power plant fleet to more flexible, low-emission technologies that can support our renewable energy portfolio.
Clean electricity will also support a clean economy. For example, due to emissions reductions in the electricity industry, in 2016 transportation became the nation’s largest source of greenhouse gas emissions. As more of us drive electric cars and trucks, the transportation sector will benefit from the changes happening in our business. The progress of clean electricity is good news for everyone.
We have achieved this kind of progress because clean electricity is affordable electricity. The average Xcel Energy residential customer’s electricity bill has stayed flat over the past four years, making electricity a bargain, especially considering all it does to drive our communities.
Low-cost renewables (with a federal tax credit) are in large part to thank for these results. By replacing a portion of the higher-cost fuel we used to burn in our plants, we have been able to add renewables and invest in making the power grid even more reliable, all while keeping electricity affordable. This winning combination of good economics and abundant renewable resources allows us to give our customers and communities what they want regardless of federal policy.
Our industry’s progress has been remarkable, but it’s not done yet. With further advancement in renewable energy technology, continued support of state public policy and the continued interest of our customers, I believe that our company can achieve a carbon emissions target of 60 percent by 2030 from 2005 levels, all while keeping bill increases well below the rate of inflation.
In fact, I have challenged the team at Xcel Energy to see if we can do even more, and we are rolling up our sleeves again. I’m excited to see what we will accomplish.
Ben Fowke is chairman, president and CEO of Xcel Energy.