Xcel Energy subsidiary Southwest Public Service Company (SPS) has announced new generation resource additions, adding up to more than half a gigawatt (GW), as part of an overall portfolio to meet the “rapidly rising” energy needs of its Texas and New Mexico service areas.
The utility cited older plant retirements and projected electricity demand increases as reasons for a “major expansion” of electricity infrastructure. The region’s power demand is expected to grow by more than 40% by 2030, driven by population growth, industrial expansion, and increased electrification, Xcel Energy said. New planning reserve margin requirements from the Southwest Power Pool have further raised the bar, with utilities now required to have more capacity to meet increasing seasonal demand.
“This portfolio is about more than just adding power. We are working to increase speed to market with a stronger, modern, and more resilient energy system that our customers can count on,” said Adrian Rodriguez, president, Xcel Energy – Texas, New Mexico. “We’re investing in the right mix of resources to benefit customers by keeping electricity reliable and supporting economic growth so we can meet our region’s energy needs today and in the future.”
Xcel Energy believes the portfolio supports its broader five-year investment plan for Texas and New Mexico, announced in October 2024, which is meant to modernize and expand the region’s energy infrastructure. Many of the proposed projects will be built at existing power plant sites, which can reduce development timelines by leveraging existing infrastructure to interconnect new generation to the grid.
What’s in it?
In 2024, Xcel Energy invited developers to submit proposals for new power projects using “any type of technology.” According to Xcel Energy, power forecasts showed the region has a future need of over 3 GW of accredited capacity, which would translate to more than 5 GW of additional nameplate capacity by the end of the decade. The utility said the current peak demand in its Texas-New Mexico service area was a little more than 6 GW at the time of the request for proposals (RFP).
The RFP process resulted in a mix of energy solutions, including wind, solar, battery storage, and gas power sources, and the projects will be developed through a variety of ownership structures. Some will be built and owned by Xcel Energy, others built by developers and then sold to the company, and some operated under long-term agreements to purchase the power they produce. The portfolio also includes extending the lives of existing natural gas units at Nichols, Maddox, and Plant X.
The selected portfolio includes extensions of 521 megawatts (MW) of existing generation as well as the addition of 17 new power projects that will add 5,168 MW of new nameplate capacity and 3,121 MW of accredited capacity to the SPS system by 2030. Technologies selected include 3,200 MW of dispatchable generation and energy storage and 1,968 MW of wind and solar generation, establishing a foundation for long-term system reliability, economic development, and a resilient energy supply. Specifically comprised of:
- 2,088 MW of natural gas
- 1,273 MW of wind
- 695 MW of solar
- 1,112 MW of battery storage capacity.
To help meet New Mexico’s 50% renewable energy requirement by 2030, two solar projects in the portfolio will be dedicated to New Mexico customers.
Xcel Energy will seek approval of the portfolio from state regulators in the second half of 2025, and the company also plans to issue another all-source RFP to secure additional resources to be operational by 2032.
Xcel Energy owns and operates a fleet of conventional plants in this region, along with two large wind energy facilities. The region’s energy mix also includes electricity generated by outside suppliers and sold to Xcel through long-term power purchase agreements.
Originally published in Factor This Power Engineering.
