Xcel Energy Announces Proposed Renewable Energy Project Selections

Business Wire, August 31, 2004

MINNEAPOLIS -- Twenty-five proposed renewable energy projects featuring hydroelectric, biomass, wind, solar and biofuel technologies have been selected to receive more than $22 million from the Xcel Energy (NYSE:XEL) Renewable Development Fund.

An advisory board with representatives from Xcel Energy, environmental groups and the Prairie Island Indian Community today recommended to the Minnesota Public Utilities Commission that $9,935,901 be awarded to projects for energy production and $12,804,466 for research and development.

More than 200 renewable energy project proposals were considered, three times the number submitted in the program's first funding cycle in 2001.

"We're delighted with the high level of interest shown in renewable energy through this program," said Bill Grant, associate executive director, Izaak Walton League, and Renewable Development Fund advisory board member. "These projects reflect an increasing awareness that renewable energy is a reality, not just a possibility."

The Renewable Development Fund money comes from Xcel Energy customers. Each year the company collects $16 million for the fund in accordance with state statute. Owners of energy production projects sell the energy to Xcel Energy or use the energy themselves. All selected projects are subject to final approval by the Minnesota Public Utilities Commission.

"The energy production projects will benefit Minnesota consumers by providing economic sources of renewable energy," said Dave Sparby, Xcel Energy vice president of regulatory services and government affairs. "Likewise, the research and development projects will allow us to continue to provide environmentally sound and reasonably priced energy in the future."

Energy production projects (locations denote project site):

--SAF Hydroelectric, Minneapolis, Minn., to use new turbine technology to restore the power generating potential of the Lower St. Anthony Falls Hydroelectric plant, $2 million.

--Central Minnesota Ethanol Cooperative (with Sebesta Blomberg, Primenergy, PCL and Interstates), Little Falls, Minn., to build biomass energy plant to co-generate heat and electricity using a steam turbine fueled by gasification and agricultural residues, $2 million.

--University of Minnesota, Minneapolis, Minn., to refurbish the Southeast Steam Plant to accommodate an increase in biomass fuel mix for a new circulating fluidized bed boiler, $2 million.

--Ripley Dairy, Dodge County, Minn., to install an anaerobic digester system from which methane biogas will be collected and used for fuel in combined heat and power gensets, $399,371.

--Diamond K and Greden's Ponderosa Dairies, Altura, Minn., to invest in a shared anaerobic digestion system and use the energy produced by combusting biogas to run a pair of diesel engines, $936,530.

--St. Olaf College, Northfield, Minn., to install a wind turbine on campus and use the energy for the college's own energy needs, $1.5 million.

--Wayzata Public Schools, Wayzata, Minn., to construct a wind turbine, the largest in the seven-county Twin Cities metropolitan area, on the campus of Wayzata High School, $1.1 million.

Research and development projects (locations denote research site):

--Rural Advantage/Blue Earth River Basis Initiative, Luverne, Minn., to determine the feasibility of commercially growing miscanthus, a large perennial grass native to Southeast Asia, and converting it to energy in Minnesota, $318,800.

--Production Specialties, Norman, Okla., and Minnesota, to develop a hydrogen sulfide removal technology for biogas, $228,735.

--Gas Technology Institute, Des Plaines, Ill., and Coleraine, Minn., to develop clean, highly effective and low-cost hydrogen production from the biomass gasification process, $861,860.

--Center for Energy and the Environment, Minneapolis-St. Paul, Minn., to create for communities a framework to determine the feasibility of regional biomass generated-electricity and develop cost-effective projects that use local biomass resources, $397,500.

--University of Minnesota and RMT Inc., to determine the economic feasibility of generating renewable biomass-based electric power at dry-mill ethanol plants, $858,363.

--University of Florida and American Crystal Sugar East Grand Forks, Minn., to research the conversion of biomass into energy and compost through sequential batch anaerobic composting, $999,995. This project was sponsored by the Prairie Island Indian Community.

--Coaltec Energy USA, Allendale, Mich., to utilize a poultry waste product as fuel to supply a solid-fuel, fixed-bed gasification testing facility, $450,000.

--Energy Performance Systems, Maple Grove, Minn., and Southern Minnesota, to improve the efficiency of planting, tending and harvesting farm-grown trees so that biomass electric power generation can compete with fossil fuel systems, $957,929.

--National Renewable Energy Laboratory, Golden, Colo., and University of Minnesota, to develop a solar cell that would be significantly cheaper to produce than current wafer-based silicon solar cells, $1 million.