New Analysis Shows Minnesota Can Save Millions AND Cut Carbon Pollution

, energy analyst | February 23, 2016, 9:12 am EST
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A new UCS analysis released today shows that strengthening Minnesota’s commitment to renewable energy and energy efficiency will drive billions in capital investments, reduce carbon emissions, and lead to significant cost savings on consumer electricity bills through 2030. Further, by setting a cap on carbon emissions and auctioning off carbon allowances, the state could generate more than $200 million in annual revenues that could be used to further reduce electricity bills or be reinvested for the benefit of Minnesotans.

With well-designed policies and careful planning and coordination, Minnesota can greatly increase its clean energy resources, cost-effectively comply with the emissions reductions required by the Clean Power Plan, and reap important economic and public health benefits in the process. Credit: © Creative Commons/Mulad (Flickr)

Minnesota can increase its clean energy resources, cost-effectively comply with the Clean Power Plan, and reap important economic and public health benefits. Photo: Mulad/Flickr

Minnesota has a long and successful history of leadership on clean energy. The state’s current renewable energy standard (RES) is a success, and the state now gets more than 20 percent of its energy from renewable energy resources. Energy efficiency investments have also paid off, providing net benefits exceeding $3 billion between 2008 and 2013. But the state still gets nearly 50 percent of its electricity from coal, and much of Minnesota’s renewable energy and energy efficiency potential remains untapped.

We analyzed the impact on Minnesota’s energy future if the state further strengthened its commitment to renewables and efficiency, and how that might help the state achieve, or even exceed, its carbon reduction targets set by the EPA’s Clean Power Plan (CPP).

Minnesota can exceed its targets

Using the Regional Energy Deployment System model developed by the National Renewable Energy Laboratory, we examined the impacts on consumers, the economy, and the environment of Minnesota strengthening its RES from the current 25 percent by 2025 to 40 percent by 2030, and its EERS from the current 1.5 percent annual savings to 2 percent annual savings for all Minnesota utilities. We combined these policies with a robust carbon trading program to create what we call the “Clean Path Case” for Minnesota.

Our findings show that under the Clean Path Case, Minnesota can achieve the strengthened standards, exceed its carbon reduction targets in the CPP, and generate significant economic and public health benefits for Minnesota. Under these strengthened clean energy policies, our results show:

  • More than 4,500 megawatts (MW) of new wind and solar resources would be developed in Minnesota by 2030, generating more than $4.6 billion in new capital investments
  • Overall expenditures on electricity would be reduced every year through 2030, savings Minnesota $745 million between 2016 and 2030
  • The typical Minnesota household would see electricity bills drop by 7 percent, providing annual savings of more than $50
  • Energy efficiency investments would increase by more than $1 billion dollars above and beyond what will be driven by the current EERS
  • Reduced emission of carbon dioxide (CO2), sulfur dioxide (SO2, and nitrogen oxides (NOx) would provide some $111 million in public health and economic benefits between 2022 and 2030.

We also found that if Minnesota adopts a mass-based carbon reduction strategy (that would set an overall limit on CO2 emissions from the electricity sector) and auctions off its CO2 emission allowances, it could generate more than $200 million in annual revenues that could then be invested in things like the deployment of clean energy resources or support to communities affected by the transition away from fossil fuels.

Bright future for solar and wind

More than 1,400 MW of new wind capacity and 3,000 MW of new solar capacity would make up the bulk of new renewable energy builds under the Clean Path Case, including more than 900 MW of rooftop solar on homes and businesses. This build-out represents more than $4.6 billion in new capital investment in Minnesota.

More than 1,400 MW of new wind and 3,000 MW of new solar capacity could be built in Minnesota under a 40 percent by 2030 RES, representing $4.6 billion in capital investments.

More than 1,400 MW of new wind and 3,000 MW of new solar capacity could be built in Minnesota under a 40 percent by 2030 renewable energy standard (RES), representing $4.6 billion in capital investments.

Clean energy = lower electricity bills

Tapping into Minnesota’s renewable energy resources, particularly when combined with a strengthened EERS that requires efficiency savings of 2 percent annually, would save consumers money. Under the Clean Path Case, a typical residential household in Minnesota would see lower electricity bills in every year. By 2030, average monthly bills are 7 percent lower than under a business as usual case, amounting to annual savings of $54.

Under the Clean Path Case, typical household electricity bills are lower in every year compared to business as usual. By 2030, the average residential household would see bills that are 7 percent lower and annual savings of more than $50.

Under the Clean Path Case, typical household electricity bills are lower in every year compared to business as usual. By 2030, the average residential household would see bills that are 7 percent lower and annual savings of more than $50.

These economic benefits can be achieved while significantly reducing emissions of CO2 and other air pollutants in Minnesota. Under the Clean Path Case, CO2 emissions drop to 14 percent below the target set by the CPP. Emissions of SO2 and NOx are also lower compared to business as usual. These reductions in emissions would provide an estimated $111 million in public health benefits to Minnesotans between 2022 and 2030.

Minnesota can—and should—continue to lead

The U.S. Supreme Court’s recent ruling to put a hold on the CPP until the merits of the rule are decided does not change the reality of climate change or the urgent need to continue reducing our dependence on fossil fuels. Nor does it change the fact that renewables and efficiency are cost-effective resources that provide a host of economic, environmental and public health benefits.

We applaud the Dayton administration’s commitment to move forward on Clean Power Plan, despite the Supreme Court’s stay. The Minnesota Pollution Control Agency is committed to moving their process forward as well with the recent unveiling of a new Clean Power Plan website and their solicitation for public input at upcoming listening sessions being held across the state.

Our analysis shows that clean energy makes sense for Minnesota, and that a robust set of policies designed to drive investments in these resources is a smart choice. With a long history of success to build on, Minnesota is on its way to a truly clean energy future.

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  • m&m

    When speaking to governments and in-state utilities, I believe showing them the flow of money out of the state w/ fossil fuels versus the flow (and potential flow) of money with locally produced power. Not to mention where money goes with conservation efforts like passively heated & cooled buildings. Health & environmental benefits are a plus but in the school of hard knocks, money talks. Thank you for your work!