Minnesota energy providers say being carbon free by 2040 won’t be easy
On Feb. 7, 2023, Gov. Tim Walz signed Senate File 4, also known as the Minnesota Clean Energy Acceleration Act, pledging to lower greenhouse gas emissions by mandating a carbon-free electricity standard by 2040. Technically, the new legislation is a revision to previous energy targets with an updated renewable energy standard of 55% by 2035. The law also adds new carbon-free benchmarks that also must be met: 80% by 2030, 90% by 2035 and 100% by 2040.
While the new legislation stresses the importance of reliable, affordable and safe energy resources, some energy experts have expressed concerns about the fragility of our energy grid including the North American Electric Reliability Corp. NERC is a not-for-profit international regulatory authority. In its December 2023 Long-Term Risk Assessment report, it placed this region in the highest risk category. It says the “high risk” label indicates that electricity supply resources may not be adequate to meet demand in extreme situations. One reason is the moratorium on nuclear plant construction that has been in place since 1994. Nuclear is one of the only carbon-free alternatives that can always meet demand.
Though there are many challenges on the road ahead. Energy suppliers have been ramping up for the future for a long time. This article seeks to bring a basic understanding of how our energy systems work, the severity of threats and what is being done to ensure a brighter future.
Understanding the grid
Most people give very little thought to where our electricity originates. We flick a switch and the lights go on. We plug in appliances and electronic devices expecting them to power up. Here’s what we don’t see.
The United States is actually composed of three power grids. The largest runs from the Eastern Seaboard to the Rockies. With the exception of Texas, all of these states are running in sync, interconnected and operating on the same frequency. The Western Interconnect, hugging the Pacific Ocean, is on a separate grid. Texas has a grid of its own.
Within the grid there are Regional Transmission Organizations (RTOs), non-profit agencies that manage the electrical markets, acting like a New York Stock Exchange for wholesale power bought and sold on a minute-by-minute basis in its territory. Minnesota is in the Midcontinent Independent System Operator(MISO) region. Spanning parts of 15 states, MISO has two major roles: It balances the load on the large transmission lines within its region and it operates the wholesale power markets. MISO owns no infrastructure.
The Federal Energy Regulatory Commission (FERC) stands as the overarching regulatory authority governing the entire system, with a mission to achieve “reliable, efficient and sustainable energy for consumers.” In addition to overseeing interstate electricity distribution, the agency regulates pipelines for natural gas and oil, as well as some related facilities and hydropower projects.
The primary aim of energy providers and regulators is three-fold: reliable, affordable and safe energy. In fact, it’s mandatory. Each of these is essential; none can be neglected or compromised. This is one of the primary challenges with which energy providers concern themselves.
Co-ops and utilities
On the state level, energy is delivered through co-ops and utilities. According to Joe Miller, director of communications for the Minnesota Rural Electric Association (MREA), its electric co-ops serve 1.7 million Minnesotans through 44 distribution cooperatives in all 87 counties while operating the largest distribution network in the state with more than 135,000 miles of electric lines. A percentage of these, like East Central Energy and Great Lakes Energy, are member-owned cooperatives. A larger number, like the 3,000 electric customers in Proctor, are served by municipal co-ops.
The co-ops do not create most of the electricity they deliver to homes and businesses. Rather, they resell power that comes from a multitude of companies that own and operate the power plants, solar arrays and wind farms.
When it comes to meeting the ambitious net zero carbon targets by 2040, all three primary providers – Minnesota Power, Great River Energy and Xcel Energy-Minnesota – expressed confidence that they are well on their way toward meeting or exceeding the mileposts laid out by state government.
Kevin Coss, senior media relations representative for Xcel Energy, noted “Xcel Energy was the first electric company in the nation to set a vision to deliver 100% carbon-free electricity. We supported the 2040 legislation and are committed to achieving a zero-carbon future as quickly as possible while also ensuring affordability and reliability. The electricity we currently provide to our Minnesota customers is nearly 70% carbon-free.” Two-thirds of this is from the Monticello and Prairie Island nuclear-powered plants.
John Brekke, vice president and chief power supply officer at Great River Energy (GRE), likewise affirmed that its Minnesota-based member co-ops “will be 90% carbon-free by 2035. We are aligned with that target.”
Minnesota Power’s Communications Director Amy Ruttledge stated that the Duluth-based utility has been actively moving in this direction for nearly two decades.
“We were 95% coal-based in 2005. We have since closed seven of our nine coal plants,” she said. Minnesota Power already delivers more than 60% renewable energy to their customers, Ruttledge added. “We’re not starting from scratch. We are actively carrying out objectives.” This includes eventually closing the Boswell 3 and 4 plants, putting out RFPs for new solar (300 MW) and wind (400 MW) projects and making other investments in the grid.
“Grid resilience is critical,” Ruttledge said.
The role of nuclear
“Nuclear energy will play an important role in the clean energy future as a source of ‘always on,’ carbon-free electricity,” said Xcel’s Coss. “Our two nuclear plants have reliably provided Minnesotans with carbon-free energy for about 50 years and currently constitute 28% of the electricity we serve to customers. Neither of the nuclear plants have been scheduled for decommissioning; in fact, we are currently taking the steps needed to extend the operating license of our Monticello nuclear plant and will follow suit with our Prairie Island nuclear plant in an upcoming regulatory filing.” These extensions, after a full in-depth safety analysis that takes years to complete – will allow the Monticello and Prairie Island nuclear plants to remain online until 2053 and 2054, Coss explained.
In early December, Justin Jahnz, president and CEO of East Central Energy, discussed with BusinessNorth some of the intricacies of this issue.
“Energy is a complex conversation. At first it seems easy but is quite complicated. One hundred percent carbon free is different from 100% renewable. Wind, which is affordable and prevalent, can cover a lot. We also need capacity. In the next 60 to 90 days there will be cold weather and cold nights. There’s no solar at night and often not a lot of wind. We need to have dispatchable resources.”
This is where peaking plants currently come in. Natural gas peaking plants are designed to meet temporary peaks in electricity demand. They operate only when the demand for electricity is high, typically for short periods in the heart of winter here or hot summer months in the South. This makes them different from baseload power plants, which run continuously to meet the constant minimum demand for electricity.
“Natural gas is affordable in summer, but expensive in the winter,” Jahntz said. “When needed, it can be dispatched. Reliability trumps everything, and should. But (we) should also be thinking about progress so we can reduce the amount of carbon we put into the atmosphere.”
He currently has concerns, however, about meeting the 2040 targets without nuclear.
“There’s a lot of development around SMRs (small modular reactors). Some organizations are making great progress, and I think there’s a lot of potential. The political appetite here is relatively low.”
When the 70-year history of nuclear submarines was noted as an example of DMR safety, Jahntz said “a lot of those nuclear reactors were run by the federal government, which does not operate on a financial/economic basis.”
“The biggest misconception people have is this,” said Jahntz. “There is no realistic storage function of the grid. There is a lot of demand volatility. We may see situations where we have rolling blackouts. I don’t think people will put up with that very long.”
The problem, according to Miller, is that both wind and solar are intermittent sources. “And those sources are not controlled by the generation company like all our other sources. The generation company has to adapt to a continuous fluctuation in power generation.”
Additional concerns
Lake Country Power, a Touchstone Energy Cooperative, serves parts of Aitkin, Carlton, Cass, Itasca, Koochiching, Lake, Pine and St. Louis counties. The co-op provides electricity and other energy related services to nearly 43,000 members in the rural parts of northern Minnesota. With more than 8,200 miles of distribution lines within 10,872 square miles of service territory, LCP is geographically Minnesota’s largest electric cooperative.
Lake Country Power receives and distributes power from its supplier, Great River Energy. GRE is a not-for-profit electricity provider owned by 28 distribution cooperatives in Minnesota and Wisconsin, including Lake Country Power. GRE generates and transmits electricity.
Mark Bakk, general manager at Lake Country Power, expressed concerns about meeting the renewables target in the governor’s energy bill.
“To me, we’re going to have a problem. If they are really serious about being carbon free, we need nuclear. Right now, the target is 80% carbon-free by 2030.” The biggest problem with nuclear, Bakk said, is the public’s perception. “We have to get over the fear.” After citing Three Mile Island and Fukushima, he added, “They don’t build nuclear plants that way anymore. There is new technology, including small modular reactors (SMRs) that have been effective for decades.”
Bakk stated that energy distribution is exceedingly complex. “Keeping everything going involves a lot of moving parts. It’s not as simple as people think.”
Storage
In the 15 years that Ruttledge has been with Minnesota Power, she’s found it quite striking how quickly things have changed.
“This transformation of our industry is amazing,” she said. This applies to every facet, including the challenges.
“Storage is something that is evolving. We’re exploring storage technologies. It’s about being commercially viable and cost effective. Storage will definitely play an important part in this transformation,” Ruttledge said. “We’re continuously investigating these new forms of technology. This transition is happening fast, and storage plays an important part.”
Transmission lines
Transmission lines were another matter addressed in various ways by several energy spokespersons. The rollout of wind farms and solar arrays is taking place in areas not presently serviced by adequate power lines, if there are power lines at all. Even when the technology is ready, permitting can create delays.
Bakk pointed out that “if you look at the state where we are, the lines are owned by GRE or Minnesota Power. They have open access, the two providers using each other’s lines. Working on a joint transmission project, permitting reform is needed to meet deadlines. Solar panel arrays and wind farms aren’t sited where the energy is used, so more transmission lines are needed, and it all costs money. There are going to have to be changes, common sense changes for reliability and affordability. A better-defined process and better-defined timelines are needed.”
The risk
Returning to the matter of risk, Philip Hult, development coordinator at Generation Atomic, helped explain the dilemma. The best way to understand it is to chart the trajectories of renewables and carbon-free energy, past, present and future. The renewables targets established in 2007 were a set of stairsteps up to the 25% by 2025 which Minnesota providers have done well to exceed by means of wind, solar, small hydro, biomass and trash.
The new carbon-free standard signed into law in February 2023, which includes all the renewables above plus nuclear, is 100% by 2040 and 55% renewable by 2035. The climb to 55% renewable will be a challenge, but does not seem absurdly out of reach. The leap to 100% carbon-free, however, will be impossible without a lot of firm, dispatchable carbon-free power, many energy experts agree. With the technologies available currently, that means nuclear. There’s simply too great of a gap between the projected decarbonization trajectory and the targets of upcoming years, Bakk and other fear.
The Minnesota mandates appear incompatible. The 2023 mandate can’t be achieved. without carbon-free nuclear power. The 1994 mandate prohibits new nuclear.
Despite the concerns raised and challenges to address, there is a surprising amount of optimism about the future. Jahnz said, “We need to be pragmatic and have conversations about the future of energy in this country. I am confident the legislature will continue to listen and work toward better solutions. I believe our best years are ahead of us. I try to stay politically agnostic. We’re involved in politics but we’re working in the best interest of our customers.”
--This article originally appeared in the February 2024 issue of Business North
