Minnesota Democrats successfully passed a bill for a carbon-free electric grid by 2040, directing a speedy energy transition in at least one sector of the state’s economy.
But that raises a question for lawmakers focused on climate change: Uhh, now what?
Of course, DFLers are considering big plans for reshaping transportation, building codes and more. But there is a thorny debate emerging at the Capitol over whether to intervene further in the electricity sector, which is Minnesota’s third-largest source of emissions and will be responsible for powering electric vehicles, home heat pumps and more in a changing world.
The House’s Climate and Energy Finance and Policy Committee heard a bill last week that would require most utilities to build energy storage systems like batteries in order to hold renewable energy for when the sun isn’t shining and the wind isn’t blowing. The current version of the measure would also create a target for 3,000 megawatts of storage statewide by 2034.
The bill’s sponsor, state Rep. Athena Hollins, DFL-St. Paul, said the legislation — which is backed by solar and energy storage businesses — would jump start the battery industry in Minnesota and nudge utilities hesitant to adopt new technology that could be central to the energy transition away from fossil fuels.
[image_caption]State Rep. Athena Hollins[/image_caption]
The idea of new mandates has been met with skepticism by Republicans. And perhaps more important in a DFL-controlled Legislature, at least one key Democrat isn’t sold on the idea of new regulations.
What the bill would do
Hollins’ bill has several parts, some of which have broader support than others. For instance, it aims to standardize some regulations around energy storage.
But the legislation notably says the PUC would determine how much energy storage utilities should build and order them to build it. And the bill says the statewide capacity for those energy storage systems must be at least 3,000 megawatts by the end of 2033.
Minnesota has 32 megawatts of energy storage capacity operating and less than 20 megawatts under construction or in advanced development, according to an analysis of market data by the American Clean Power Association, a national trade group.
Hollins said the amount of energy storage each utility would need to build would depend on how many customers it serves, so the burden is shared equally. “The deployment of energy storage would overcome one of the biggest obstacles in renewable energy, its cycling between oversupply and shortage,” Hollins testified in the climate and energy committee. “By smoothing imbalances between supply and demand, batteries could eventually replace fossil fuel plants that have to kick in for a few hours when energy demand peaks.”
Energy storage is not a new concept in Minnesota. Utilities are even experimenting with emerging battery technology. The cooperative Great River Energy plans to build a 1.5 megawatt “iron-air” battery system in Cambridge, and Xcel Energy hopes to install a 10-megawatt one in Becker where the utility is planning a large solar project. The batteries use the process of rusting to store power.
Missouri River Energy Services, which includes 25 municipal electric utilities in Minnesota and others in North Dakota, Iowa and South Dakota, is hoping to use renewable energy to pump water uphill, and then release it during periods of high demand to create carbon-free hydroelectric power. That reservoir-as-storage project is planned to have a much larger 1,800 megawatts of capacity, enough to supply power to more than 1.3 million homes for up to 26 hours, but isn’t expected to be operating until 2035.
Still, Hollins said the storage requirements will ensure utility companies that have other concerns — like cost to customers and, for some, shareholders — won’t avoid emerging technology until it’s too late to hit the 2040 carbon-free target.
Logan O’Grady, executive director of the Minnesota Solar Energy Industries Association, which represents 140 companies working in solar and energy storage, said there are “business signals within this bill.”
“The procurement targets tell everybody throughout the country that we are a great place to do business for energy storage companies,” O’Grady said. The American Clean Power Association wrote in a letter to the Legislature that states with energy storage deployment targets are far outpacing Minnesota.
Still, utilities expressed deep concerns about the bill.
[image_caption]Rick Evans[/image_caption]
“It is a very sophisticated program, it is very detailed and it is also a very public program,” Evans said.
Evans said the Integrated Resource Planning process would be usurped under the bill by “arbitrary number in an arbitrary year for a certain kind of resource regardless of whether it is the most affordable or reliable way to reach 100% carbon free by 2040.”
Great River Energy, Duluth-based Minnesota Power, and the Minnesota Municipal Utilities Association, all had issues with Hollins’ bill, too. One main concern was the idea of government determining how they can reach 100% carbon-free energy by 2040.
“The new law was enacted to give utilities flexibility in meeting the standard,” wrote Stacey Fujii, director of governmental affairs for Great River, in a letter to lawmakers. “A mandate dictating a specific resource does not provide flexibility.”
More mandates ahead?
That flexibility was indeed a selling point for many Democrats as the carbon-free standard moved through the Legislature.
“The bill does not require a certain energy mix,” said Sen. Nick Frentz, a DFLer from North Mankato who was a key architect of the legislation. His comments came at an early February press conference, where Gov. Tim Walz signed the measure into law. “You don’t have to have this percent of solar, this percent of hydro, this percent of wind or any other.”
Frentz’s statement is not totally true. The standards do include some restrictions for renewable energy, and new nuclear plants are banned in Minnesota, effectively determining some aspects of a utility’s energy mix.
But at a panel hosted last week by the Minnesota Rural Electric Association — which represents cooperative electric utilities — Republicans argued Hollins’ bill was breaking the spirit of Frentz’s comments.
“If you view carbon-free by 2040 as the solution to all of our problems we certainly are coming up with a lot of bills to put more mandates on the docket,” said Ghent Rep. Chris Swedzinski, the top Republican on the House’s Climate and Energy Finance and Policy Committee. Sen. Jason Rarick, R-Pine City, told the cooperative group that lawmakers should “help free your hands” by allowing new nuclear projects in the state.
Frentz chairs the Senate’s Energy, Utilities, Environment and Climate Committee, meaning he will be crucial to determining how the Legislature moves ahead on energy policy. And at the panel, he echoed Republicans on the idea of additional mandates. Frentz said while lawmakers will work to approve matching funds to unlock federal cash in the Inflation Reduction Act and the infrastructure bill, flexibility for utilities to determine their own path to carbon-free energy was important.
[image_credit]Screenshot[/image_credit][image_caption]Minnesota Rural Electric Association Forum panel, from left: Rep. Chris Swedzinski, Sen. Nick Frentz, Sen. Jason Rarick, and Rep. Patty Acomb.[/image_caption]
Frentz’s counterpart in the House, DFL Rep. Patty Acomb of Minnetonka, said she is “a believer in carrots, rather than sticks,” and hopes to incentivize outcomes rather than demand them.
Hollins, for her part, told MinnPost that she’s open to negotiating the energy storage target and other aspects of the bill. And the PUC would, under the legislation, direct construction of projects if the investments would be “reasonable, prudent, and in the public interest.”
Hollins also said the 3,000 megawatt number was based on a similar goal in Virginia, and isn’t arbitrary. She maintained giving utilities a reason to build more storage would be good. Those utilities are “less likely to want to move forward on something until you are absolutely certain that it makes economic sense or that it is going to make you money as opposed to lose money.”
“The reality is we have 17 years to get to 100% clean energy,” Hollins said. “And if we don’t have energy storage as a part of it, what’s going to happen is we’re going to just be purchasing energy from outside of our state.”
I’d like to know where Athena Hollins got her electrical engineering degree that she can be so confident in her analysis that she can MANDATE the capacity requirements and feasible timetable to implement a state-wide battery storage system. Let the professionals do their jobs, please. They’re in it to make money. They have sufficient motivation to do what needs to be done as efficiently and effectively as possible. The only thing worse than an authoritarian government is one who doesn’t know what they’re talking about.
I’d also like to know which third world country she’d like to exploit for the minerals need for the storage.
I guess it is right here:
“After graduating from law school, Hollins practiced family law and estate planning. She now works in community relations and diversity and inclusion, serving as a senior director of diversity and foundations.”
Mandating something doesn’t solve the problems of technology, implementation, costs or redundancy. It is an absolute joke (or disservice) to mandate anything you don’t know the consequences for. How about we mandate away winter? I am all for that.
Do the kids in Africa mining lithium know they are going to have to work harder?
In the article, it mentioned utilities now planning to build battery storage were going to use iron battery technology. That seems like good news for Minnesota and the Iron Range. It also seems to make sense to put money into building storage systems, and electric generation in Minnesota rather than rely on huge, costly transmission lines to bring electricity from other states.
It is encouraging that the legislature is having these discussions on how to be proactive about climate change instead of waiting for it to become an even bigger problem.
Our local electric cooperative is worried about how the legislation for clean energy that was passed recently, will affect them, and their customers. Part of the concern is: where they are in they pipeline for accessing more electricity as demand increases as more and more customers shift from gas to electric power?
They are part of the Great River Energy Cooperative. So I am pleased that Great River is being proactive and planning to build battery storage. Whether more carrot or stick is needed in their case, I am not sure. In most cases the carrot is a better incentive. The good in all of this is that most people are now aware that we have a serious problem, and that we need to deal with it, sooner rather than later.
Getting to carbon neutral (or better, negative) As Soon as Reasonably Possible is obviously the goal. However, I think I’d let things percolate for a bit before adding more requirements around storage. I think I’d also allow new nuclear back into the mix. I doubt any nucs would end up getting built…solar and wind are too cheap; it remains to be seen which storage technologies end up winning, but it will at least remove one Republican whining point, and if the modular nuclear plants end up panning out, seems like a decent stop-gap while waiting for RE storage to come down farther in price.
I’d guess eventually second use EV batteries will be our preferred RE storage mechanism, but that’s still 20 years out from being viable…there just won’t be enough old EV batteries to do the trick for quite some time, and they seem to be lasting longer than originally expected (which is actually really good news). Even my crummy LEAF battery is still showing no signs of decline after 30,000 miles – it has fewer battery life extending technologies than most EVs. The highest and best use of batteries will remain getting ICE vehicles off the road ASAP for quite some time, while we keep building out as much wind and solar as we can as fast as we can. There’s still a lot of coal and gas that can be eliminated from electricity generation during the day, we can worry about nights, lengthy periods of cloudiness, and wind-free periods after we pick the low hanging fruit.
Eliminating roadblocks to beefing up the grid would be far more valuable than mandated storage, as would speeding up interconnection of small residential and commercial rooftop solar (which is also healthy for the grid, especially in lower income areas that have overwhelmed grids already (looking at you, Selby-Dale)).
In the meantime, technologies will continue to evolve. Whether it’s batteries, pumped hydro, electrolyzed hydrogen, thermal storage, flywheels, or something else, there is a lot of activity in all these areas. Good answers will emerge.
I live in Roseville and work as an independent energy consultant.
I worked at Midcontinent Independent System Operator (MISO), the grid operator, for 15 years.
I have followed energy storage for nearly 15 years since Xcel announced its Luverne wind to battery project in 2008. The storage industry has come a long way in the past decade. I also participated in the Department of Commerce funded energy storage study in 2019.
One of the reasons why energy storage is taking off is – the Federal Energy Regulatory Commission issued Order 841 in late 2020, which mandates that energy storage can participate in wholesale markets. Behind-the-meter storage as small as 100 kW can participate in MISO markets. This Order 841 allows energy storage to participate in wholesale and retail markets by providing different services.
Like a Swiss army knife, energy storage has multiple uses for the transmission and distribution grid. On the distribution feeder level, discharging a battery during peak demand hours – from 4 pm thru 8 pm can reduce the need for adding another feeder. Xcel successfully tested this feeder reduction in Colorado at its Panasonic solar site.
Also, customers can use batteries on the distribution system as backup power. This backup power is useful for commercial and industrial customers during grid emergencies. Customers with backup power will rely less on our utilities, freeing up the utility to help those in need.
Adding energy storage to customers’ rooftop solar allows them to use more solar. For example, Plug-in electric vehicles can be charged from solar using storage systems.
Another benefit of storage is that it can reduce the impact of demand charges on customers by reducing peak demand.
At the transmission grid, storage reduces the transmission charges our consumers have to pay because storage avoids the MISO operator’s curtailment of utility-scale wind and solar.
Mandating someone else to do something isn’t hard, especially if the mandate might not even be possible with present technology. Governor Pawlenty began a program many years ago which as far as I know hasn’t reached its targets along the way regarding emissions and renewables. Just making the mandates more difficult doesn’t make things happen. And of course, the businesses affected are not getting any money to help accomplish these mandates, just orders. But I believe that there are enough smart people in the electricity producing business to possibly achieve the mandates and I also believe that it will cost a boatload of money which, as has been the case since the Pawlenty years, electricity cost will have to rise to pay for all the advances if the state actually allows the necessary increases.