Large-Scale Renewable Energy: The Top Challenges

Dick KellyChairman, President and CEO

EPRI 2008 Summer SessionAugust 4, 2008

Northern States Northern States Power Company- Power Company-

MinnesotaMinnesota

Public Service Public Service Company of Company of

ColoradoColorado

Southwestern Southwestern Public ServicePublic Service

Northern States Northern States Power Company- Power Company-

WisconsinWisconsin

Xcel EnergyElectric Customers 3.3 millionGas Customers 1.8 million

Xcel Energy Wind and Solar Resources

Xcel EnergyXcel EnergyStates ServedStates ServedWind DensityWind Density

HighHigh

LowLow

Source: National Renewable Energy LaboratorySource: National Renewable Energy Laboratory Source: NREL, 2004Source: NREL, 2004

Xcel Energy Renewable Energy Portfolio

No. 1 wind provider in the nation

No. 5 for solar energy

7,400 MW7,400 MW

2020202020072007

2,700 MW2,700 MW

Challenges of Wind Energy

Forecasting

Intermittency

Integration

Cost

Challenge No. 1: Wind Forecasting

Critical information not available Site wind

characteristics

Turbine availability

Site topography

Challenge No. 2: Intermittency

0

200

400

600

800

1,000

1,200

1:002:0

03:0

04:0

05:0

06:0

07:0

08:0

09:0

010

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Total PSCo Wind GenerationMW

Time of Day

Intermittency Solutions

More transmission

Large-scale storage

A smarter grid

Challenge No. 3:Impact on Conventional Supply

Base-load plants cycle faster and more often

Higher maintenance costs

Challenge No. 4: Cost

Production tax credit for wind

Solar investment tax credit

More certainty