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Xcel Energy’s costly mistake

In February 2009 Minnesota-based energy company Xcel Energy filed an application with the Wisconsin Public Service Comission that would see the installation of its biomass gasification technology at its Bay Front power plant in Ashland. The project was estimated to cost in the region of $58 million (€44.5 million) and $70 million.

The project was approved in December last year, after which Xcel Energy and its consultants completed the second phase of engineering and development work.

However it has now come to light that the company underestimated the installation costs by almost $10 million, with the project costs now estimated at $79.5 million.

Speaking about the incident Don Reck, director, regulatory and government affairs said: ‘We remain committed to increasing the use of biomass at the Bay Front power plant and are looking at ways to reduce the cost to our customers.’

Xcel’s vision is to replace the Bay Front power plant’s only remaining coal-fired unit with technology so it can burn 100% biomass in all three boilers.