Evraz Rocky Mountain Steel in Pueblo, Colorado, will install a 240-megawatt solar facility on its own property. The company forged an agreement with Xcel Energy Colorado to build the solar facility in a move that will provide electric price certainty for the mining and steel making company through 2041. PV Magazine calls the deal with Evraz “by far the largest behind-the-meter solar project” that it has heard of, to date.
Xcel Energy says that its long-term agreement with Evraz will solidify the steel mill’s continuing operations in Colorado, as it forms a foundation for Evraz to evaluate investment projects directed at upgrading and modernizing major components of its hot-rolling operations at its mill in Pueblo. “Achieving long-term price certainty on energy is a key first ingredient for considering further investments,” says Conrad Winkler, president and CEO of Evraz North America. The 22-year power purchase agreement is contingent upon Evraz executing its investment projects by 2024.
The agreement will allow the early retirement of 660 megawatts of coal-fired generation at Xcel’s Comanche Generating Station, also located in Pueblo. In the company’s corporate sustainability report released in May, Xcel said it plans for the retirement of 20 coal units from 2005 to 2026, representing 40% of its coal-powered capacity.
Xcel Energy says that Evraz’s commitment to renewable energy will help the utility keep bills low over time. Renewable energy is a component of Xcel’s business that has allowed the utility to reduce average residential consumer bills by about 9% in the past five years, the company says.
It’s All Part of the Plan
The agreement is part of Xcel Energy’s Colorado Energy Plan, which is currently before the Colorado Public Utilities Commission. In addition to the early retirement of 660 megawatts of coal-fired generation at its Comanche station, the plan calls for the addition statewide of 1,100 megawatts of new wind generation, 700 megawatts of new solar generation, 275 megawatts of new battery storage, and acquisition of 385 megawatts of existing natural gas generation.
The proposed plan would invest $2.5 billion in new Colorado energy sources that will help the company reduce carbon emissions 60% by 2026, Xcel says. Once executed, if approved, renewable energy would account for 55% of Xcel Energy’s supply mix, with a substantial amount of solar and storage being developed in the Pueblo region.