Advancing Minnesota’s Clean Energy Economy: Building on a History of Leadership and Success

, energy analyst | January 21, 2015, 10:01 am EDT
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A new study by the Union of Concerned Scientists shows how strengthening Minnesota’s renewable energy standard (RES) can drive billions of dollars in new private capital investment and create a cleaner, more diverse, self-reliant electricity system in the state. Minnesota can achieve this future at virtually no additional cost because of the state’s robust and cost-effective renewable energy resources.

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Minnesota’s history of policies supporting renewable energy goes back more than 20 years and has established Minnesota as a national leader in renewable energy development. With Minnesotans now getting more than 15% of their electricity from renewable energy, the state’s utilities are well on their way towards meeting the current 25 percent by 2025 RES. But despite this progress, Minnesota still relies on coal for nearly 50 percent of its electricity  while the state’s potential to tap its vast wind and solar energy resources remains unfulfilled.

So we at UCS decided to explore what Minnesota’s energy future could look like under a strengthened RES of 40 percent by 2030. 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 under the current 25 percent by 2025 RES, known as the Reference case, and under a strengthened RES of 40 percent renewable electricity by 2030.

Our findings show that Minnesota can adopt a strengthened RES of 40 percent by 2030 while maintaining a reliable and affordable electricity supply. Further, the strengthened RES:

  • Drives significant investment in Minnesota’s renewable energy resources. More than $6 billion in additional private capital is invested to develop more than 3,100 megawatts (MW) of new renewable energy generation capacity in Minnesota.
  • Helps sustain local communities. By 2030, additional renewable energy development annually provides more than $150 million in payments to operate and maintain new renewable energy facilities, $14 million in local tax payments to fund essential services like police and fire departments and schools, and $9 million in lease payments to landowners that host wind farms.
  • Is affordable. Achieving a 40% would add less than 0.2% (two-tenths of one percent) to the state’s cumulative electricity expenditures through 2030 – about 12 cents per month for the typical Minnesota household.

Our analysis also shows that the increased generation of renewable energy in Minnesota helps the state reduce its reliance on imported electricity from out-of-state resources – much of which comes from coal-fired power plants in North and South Dakota. Under a 40 percent by 2030 RES, electricity imports are reduced each year, resulting in Minnesota becoming a net exporter of electricity in 2030. Further, this increase in renewable energy generation positions the state to comply with federal limits on carbon dioxide emissions and potentially make even more significant reductions.

Sustained and robust development of Minnesota’s renewable energy resources

Under the 40 percent by 2030 RES, Minnesota’s renewable energy industries add more than 3,100 megawatts (MW) of new renewable energy by 2030. In comparison, renewable energy development in the state essentially stagnates after 2020 under the Reference case. Under the strengthened RES, wind power generation capacity in Minnesota grows by more than 2,900 MW and utility-scale solar power also shows impressive growth of 220 MW compared with the Reference case.

Renewable Energy in Minnesota, Reference case versus the Strengthened RES case

Without a strengthened RES, development of renewable energy in Minnesota largely stagnates after 2020. However, under an RES of 40 percent by 2030, wind capacity almost doubles to nearly 6,000 MW, while utility-scale solar photovoltaic (PV) capacity rises to more than 600 MW.

Without a strengthened RES, development of renewable energy in Minnesota largely stagnates after 2020. However, under an RES of 40 percent by 2030, wind capacity almost doubles to nearly 6,000 MW, while utility-scale solar photovoltaic (PV) capacity rises to more than 600 MW.

Significant economic benefits, particularly for Minnesota’s rural communities

This development of Minnesota’s renewable energy resources would drive more than $6 billion in new capital investments from 2016 to 2030. By 2030, these renewable energy facilities would make significant contributions to local communities, annually adding more than $155 million in local payments to operate and maintain facilities, more than $14 million in tax payments to local governments, and almost $9 million in lease payments to landowners that host wind turbines.

Additional Investments in Clean Energy under a Strengthened RES

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Greater deployment of renewable energy under the Strengthened RES would provide a significant economic boost for Minnesota communities. The stronger RES spurs developers to invest more than $6 billion in more than 3,000 MW of new renewable energy capacity by 2030. Annual operation and maintenance of these renewable energy facilities yields another $155 million in additional local spending that year.

These economic benefits would accrue across Minnesota, but rural communities in particular stand to gain because wind and solar facilities tend to be located in rural areas where land is available for renewable energy development. Landowners who lease their land to wind or solar farm developers can receive a valuable and consistent source of income while local payments that renewable energy facilities make can help fund essential services like police and fire departments and schools. In urban areas, the development of rooftop solar systems and small-scale wind facilities offers additional opportunities for economic investments.

A cost-effective clean energy transition

Our analysis also shows that Minnesota can achieve this clean energy future at virtually no additional cost to consumers. Wind and solar power costs have declined more than 60% in recent years, making these zero-carbon technologies competitive with coal and natural gas power without exposure to volatile fossil fuel prices. Further, because wind and solar facilities have no ongoing fuel costs – the wind and sun are free – their cost advantages grow over their more than twenty-year lifespan as the prices of fossil fuels are expected to continue rising.

Under the Strengthened RES case, the added cost of achieving 40 percent renewable energy in 2030 is less than 0.2 percent of the state’s total electricity expenditures compared to the Reference case – or about 12 cents per month for the typical Minnesota household.

Minnesota’s future is bright with a strengthened commitment to renewable energy

Strengthening Minnesota’s RES is a win-win for Minnesota. By enacting a 40 percent by 2030 RES during the 2015 legislative session the state can reap significant economic benefits, keep rates affordable, and better position the state to significantly reduce its dependence on imported fossil fuels. Minnesota adopted its current RES in 2007 with strong bipartisan support from a democratic legislature and republican governor. Now it’s time to build on the state’s legacy of leadership and success to secure Minnesota’s clean energy future, an idea that both sides of the aisle should again support.

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