Higher renewable standard could boost Minnesota’s economy

Minnesota would see more than $6.2 billion in capital investments if the state raised its renewable energy standard (RES) to 40 percent by 2030, according to a study by the Union of Concerned Scientists.

Meanwhile, the change would have a minimal impact on ratepayers, the UCS says.

Currently the state’s policy calls for 25 percent of energy to come from renewable sources by 2025. With Minnesota receiving 19 percent of its energy from renewable sources today, the prospect of increasing the goal to 40 percent has gotten the attention of policy groups and lawmakers.

UCS’s report is intentionally meant to bolster a move by a coalition of labor, youth, clean energy and environmental groups to push the Legislature this session to pass a 40 percent RES by 2030, said Steve Frenkel, director of UCS’s Midwest office in Chicago.

“We wanted to provide a real sense of the possibilities if that legislation was passed and what that would mean for the state and the economy of the state,” he said.

The UCS is both a member of RE-AMP, which publishes Midwest Energy News, as well as Minnesota Clean Energy & Jobs, the coalition lobbying for a 40 percent RES.

The report suggests a higher RES by 2030 has the potential to produce $155 million annually for maintenance and operation of solar and wind facilities. The state would see a modest increase of $14 million in revenue while landowners who lease property for wind development could see $9 million in annual payments.

The strengthened RES would create another 3,100 megawatts of renewable energy in Minnesota, the report said, while reducing electricity imports so much that the state would become a net exporter. The expected concerns over higher utility rates was addressed by the report, which placed the extra cost at 12 cents a month on the bills of consumers by 2030.

“For Minnesota ratepayers it’s essentially an even trade between continuing to pay for fossil fuel generation — whether generated in North Dakota or Minnesota — and instead invest in new steel-in-the-ground renewable energy infrastructure in Minnesota,” Frenkel said. “That’s a better deal for Minnesota ratepayers, Minnesota’s economy and the environment, too.”

Wind is a “not fully utilized” asset in Minnesota and offers by far the greatest opportunity for increased renewable energy, Frenkel said. The state’s wind output would jump from 3,039 MW to 5,947 MW and utility-scale solar would rise more than 600 MW in 2030 in a model imagined in the report.

This largely reflects another recent report on expanding wind resources in the state but appears to discount solar significantly, even though Xcel Energy, Inc. announced that applications for community solar gardens totaled 431 MW the first year and suggests in its long range planning a goal of 2,400 MW by 2030.

The UCS analysis assumed the state’s existing mandate of producing 1.5 percent of energy from solar by 2020 in investor-owned utility footprint would be realized, he said. The model picked which resource was the most economical for Minnesota and wind won that debate. “Wind on a per kilowatt hour basis is cheaper than solar,” he said.

The report does not take into account Xcel’s planning, nor does it capture the “enthusiasm” for expanding investment in solar in Minnesota, he conceded. In the end, the UCS cares less about which renewable will help fulfill a 40 percent goal and more about making the 40 percent RES the law, Frenkel said.

The dispersal of clean energy jobs would have a greater impact in rural areas, the report adds.

“Investments in renewable energy already strengthen rural areas: Minnesota’s southern region now has the second-highest number of clean energy jobs in the state,” the report states. “And the southwestern region, which has the highest concentration of renewable electricity facilities, has seen the fastest growth in clean energy employment over the past 15 years.”

The UCS notes that a Minnesota Department of Commerce report released last October found the state’s electrical infrastructure could reliably accommodate a goal of 40 percent of retail electric sales by 2030 through additional solar, wind  and other renewable sources.

Finally, the UCS points to Minnesota’s progress as a national leader in renewable energy as cause for optimism for a strengthened RES. The state has seen $5.6 billion in capital investment since the 2007 RES established mandates for renewable energy.

“Minnesota has seen more jobs, cleaner air, more self sufficiency with very little to zero cost,” Frenkel said. “Utilities have said in their filings with the Public Utilities Commission that complying with the current standard has added zero to little additional cost. We think Minnesota can expand that ambition.”

Now it’s up to the Legislature. “The 2007 legislation was passed by strong bipartisan majorities,” he said. “This not a red-blue issue, it’s a Minnesota issue. Now is the time for Minnesota to show its leadership again.”

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