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We’re back, and starting 2020 in Minnesota, where the temperatures are frigid and the largest utility is a trend-setter. Then, we look at how Tesla managed to eke out a solid performance in recent months, capping a crucial year of growth for the EV leader.

I’m Dan Gearino, your guide to the clean energy economy. Send me news tips and questions at dan.gearino@insideclimatenews.org, and thanks for reading!

— Dan

Use Less Coal, Save Money. Sounds Good, Right?

I wrote this week about how Xcel Energy continues to be a trend-setter in the transition to clean energy, with a proposal that shows how the utility plans to make some of the important initial steps toward the larger goal of net-zero emissions by 2050.
 
While I was working on that story, Xcel did something else that’s worth highlighting and also will help reduce emissions.
 
On Dec. 20, the utility asked Minnesota regulators to change the status of two of its coal-fired generating units from “must run” to running only as needed on a seasonal basis. The change would save money and reduce emissions.
 
In addition to being a good proposal for consumers and the environment, the data in the filing could be used across the country to argue that other utilities should follow suit.

Regulated utilities can choose to run coal plants even when less expensive options—such as wind, solar and natural gas—are available. The Union of Concerned Scientists argues that changing that practice would provide financial benefits for consumers, along with environmental benefits.
 
That’s what Xcel decided in proposing to idle two plants during the spring and fall months, and operate them during the summer and winter months on days of high demand.
 
The change would lead to savings on fuel costs in the range of $9.1 million to $19.1 million in 2021, the first full year of the policy. The range is based on different scenarios for electricity market prices. If market prices are high, then the coal plants could operate at a profit and would operate more often, which would lead to lower savings on fuel.
 
The fuel savings would be in addition to saving $4.8 million on the costs of operating the plants. Xcel would fill any gaps in electricity demand by relying more on its other sources and buying power on the open market.
 
By reducing use of the coal plants, Xcel would reduce emissions by between 3.7 million tons and 4.4 million tons of carbon dioxide in 2021.
 
The benefits would occur with no expected layoffs. Xcel says it would accommodate the need for fewer employees by not replacing those who retire or leave for other jobs. Some employees at those two plants may be looking for new jobs anyway because the unit at the Sherburne County Generating Station is set to shut down in 2023 and the Allen S. King Generating Station is set to close in 2028.
Joe Daniel, an energy analyst with the Union of Concerned Scientists, tells me the plan is a significant step forward. He has written extensively about how “must run” status for coal plants is a harmful practice. One of the harms is that the electricity from coal is crowding less expensive sources from the market—often renewable sources.
 
“We know, in aggregate, that if power plants were to operate purely on economics, we would have much lower emissions,” he said.
 
I should note that Xcel is not the first utility to make this kind of proposal. Daniel wrote in December 2018 about how a Louisiana plant owned by an American Electric Power subsidiary was switching to only operate a few months a year, leading to projected savings of $85 million.
 
This could be done in many other places, and I’ll let you know if I see any other examples.

(Photo: Andy Cross/Denver Post via Getty Images)
 

Tesla Hits Sales Target and Enters 2020 on a Roll

Tesla has managed, barely, to meet its target for vehicle sales in 2019, surviving a year when it needed to ramp up production of its Model 3 sedan and operate on a much larger scale than before.
 
I wouldn’t say Tesla passed the tests of 2019 with flying colors, but the company definitely didn’t fail, and that’s good news considering that Tesla is the world’s leading manufacturer of electric vehicles.
 
The company had told investors that 2019 global sales would be in the range of 360,000 to 400,000 vehicles. The actual number, revealed on Jan. 3, was "approximately 367,500."
 
Of that total, nearly one-third were in the fourth quarter, a sign that its factory in Fremont, California—the company’s only assembly plant that is fully operational—has made great strides in increasing its output.

Tesla is now poised to grow much more, with a factory getting started in China and another planned for Germany. CEO Elon Musk said in China this week that the plant there would make a new product, the Model Y compact crossover, which would go on sale late this year.
 
“Ultimately, the Model Y will have more demand than probably all of the other cars of Tesla combined,” Musk said.
 
This is the kind of hype that makes Tesla a difficult company to assess.
 
“Tesla has, from the beginning, made aggressive promises and targets that they haven’t always managed to quite hit, but at the same time, they’re moving things forward quite a bit,” said Stephanie Brinley, an auto analyst for IHS Markit.
 
It is not easy to start a new car company and develop new models, she told me. Tesla has done this and is alone at the top of the EV sales charts. In the U.S., the Model 3 sold 158,925 units in 2019, while the other leading EV models were in the 20,000 range, according to InsideEVs.com, a news site focused on electric vehicles and the industry. The U.S. is Tesla’s leading market, but the brand also has a substantial presence in China, Canada and Europe.
 
Despite Tesla’s successes, the U.S. market for electric vehicles didn’t have the kind of record growth we saw in 2018, when sales were 349,298, up 55 percent from 2017, according to InsideEVs. Some results are still coming in, but the pace through October showed that 2019 sales were looking essentially flat compared to the prior year.
 
That’s not fast enough to bring about the kinds of emissions reductions needed from the transportation sector to fight climate change. At the same time, it’s difficult to forecast how automakers and consumers will respond as more EVs come on the market and as battery prices decline, bringing EVs closer to cost parity with gasoline vehicles.
 
Whatever happens, we can assume Tesla will be a big part of it.
 

On Renewable Energy, Minnesota Leaves Wisconsin in the Dust

Minnesota and Wisconsin are neighbors and sometimes rivals, with big geographic footprints and similar population levels. But on renewable energy, the two have diverged in a big way, as Chris Hubbuch of the Wisconsin State Journal reported this week.
 
Minnesota now gets 22 percent of its electricity from wind and solar, while Wisconsin gets just 3 percent, according to the Energy Information Administration.
 
The states were on similar tracks on renewable energy development until Minnesota began taking giant strides with wind energy in the 2000s and solar in the 2010s.

Minnesota has stronger wind resources than Wisconsin, so some gap is understandable. But Minnesota shaped policies to invest in wind energy, while Wisconsin’s government placed limits on development.
 
With solar power, Minnesota passed a law in 2013 to encourage development, while Wisconsin has done little.
 
Some of this comes down to politics. Minnesota spent most of the 2010s under the leadership of Gov. Mark Dayton, a Democrat who supported renewable energy, while Wiscosin was led by Gov. Scott Walker, a Republican who favored fossil fuels.
 
The choices made by voters and political leaders in those states have had consequences. Wisconsin’s slow development of renewable energy put it behind the curve in attracting jobs in the wind and solar industries and has been slow to reduce the environmental hazards of burning fossil fuels.
 
“Wisconsin’s heavy carbon footprint is a liability for our economic future,” said Andy Olsen, a policy analyst for the Environmental Law & Policy Center. “A clean energy economy will bolster prospects.”
 

U.S. Emissions Dropped in 2019. Here’s Why.

My colleagues Nick Kusnetz and Paul Horn have a story that explains in six charts why U.S emissions went down slightly in 2019.
 
The main reason for the decrease: power producers are using less coal, largely for economic reasons since coal is now more expensive than other electricity sources, according to preliminary estimates from Rhodium Group, an economic analysis firm.
 
That was the good news. Then there’s the rest of the economy.
 
While the energy sector’s emissions dropped, emissions from buildings and industry rose, and transportation—now the biggest emitter—was essentially flat.
 
Some of the emissions drop from 2018 can be explained by the economy, Rhodium said. The first three quarters of 2019 saw slower GDP growth compared to the year before.

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