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Xcel CEO says wind is now cheaper than natural gas, plans for more wind farms

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Minnesota and the wider Midwest is likely to be a hotspot for wind power in the coming decades, after Xcel Energy's CEO said it is becoming a cheaper source of energy than natural gas.

In what it describes as a "another sign of the rapid transformation of the power market," Bloomberg spoke with Ben Fowke, of Twin Cities-based Xcel, regarding its plans for the future.

Xcel, which provides power in eight states including Minnesota, is already the biggest provider of wind power in the U.S., and is expected to make a considerable investment in more of it over the next 15 years, during which time Fowke said the company wants to add 1,600 megawatts of wind energy to its system.

"We have a plan to add significant amounts of wind to our system," Fowke said, adding that Xcel has been signing 20-year agreements to buy wind power at a cost of $25 per megawatt-hour, compared to the $32 he expects natural gas to cost over the next two decades.

"When we're buying wind at $25, it's a hedge against natural gas," he said.

Xcel has been making some major changes as it plans for the future, announcing earlier this month that by 2026 it will shut down two out of the three coal-fired units at its biggest power plant in Minnesota, Sherco in Becker, which between them generate 1,500 megawatts of energy.

It comes amid national legislation set out under the EPA's Clean Power Plan which requires power plants to reduce their carbon emissions by 32 percent by 2030 – with Xcel well on the way to achieving that goal.

Xcel currently generates 15 percent of its electricity in the Minnesota region from wind, the Star Tribune reports, (though Fowke said that can rise up to 60 percent during high winds), and 37 percent from coal.

As it goes forward, Xcel expects a third of its energy in Minnesota and the Dakotas to be generated by wind and solar by 2030, with just 15 percent coal, the newspaper notes.

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