Minnesota is set to require carbon-free electricity. What does that mean?
A bill that will require Minnesota’s electricity to be carbon-free by 2040 is racing through the legislature.
The house already has passed the measure and the Senate will vote on it today. Here’s a closer look at the bill and what it will mean for electric utilities and their customers.
What is causing state legislatures to enforce this now?
It is mainly driven by concerns about climate change.
In Minnesota, burning fossil fuels such as coal and natural gas to generate electricity is one of the largest sources of carbon and other greenhouse gases that contribute to climate change.
It’s no longer the biggest culprit as utilities have switched to cleaner sources of energy like solar and wind. Transportation and agriculture are the largest emitters of greenhouse gases in Minnesota today.
However, Gov. Tim Walz, DFL lawmakers and environmental groups want utilities to make the transition to cleaner power faster. The CO2-free electricity measure is part of a Action plan to combat climate change, which the Walz government published last autumn.
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The proposal has been discussed for a number of years. Now that the DFL party controls both the House of Representatives and the Senate, they have a real chance of making a breakthrough.
What would the bill do?
It includes two separate standards for renewable and carbon-free energy.
A 2007 Minnesota law already requires that electric utilities obtain at least 25 percent of their electricity from renewable sources. The state already achieved this goal in 2017. This law would increase that amount to 55 percent renewable by 2035.
It also creates a new carbon-free standard. It requires utilities doing business in Minnesota to get a percentage of their electricity from carbon-free sources — starting at 80 percent by 2030, 90 percent by 2035, and eventually 100 percent by 2040.
What is the difference between renewable and zero-carbon energy?
The bill defines renewable energy as solar, wind, hydro, hydrogen and biomass, such as B. a facility that burns garbage or wood to generate electricity.
There’s one exception to the bill — the Hennepin Energy Recovery Center, or HERC, which incinerates garbage for energy in downtown Minneapolis. It has been a source of environmental justice concerns over the years due to the air pollution it emits.
The authors of the bill say the plant should not be considered in the same category as other renewable energy sources such as solar or wind.
Another change: Previously, only energy from small hydropower projects below 100 megawatts was considered renewable. The bill removes this restriction, so large, existing hydropower projects would now qualify.
That’s significant because it would now include electricity Minnesota Power sources from a large hydroelectric facility on Canada’s Manitoba River, which has been controversial among some environmental and tribal groups.
What is considered carbon-free energy?
Carbon-free energy sources are those that do not emit carbon dioxide, such as solar, wind, hydroelectric or nuclear power. According to the law, nuclear power is not considered a renewable energy source, but it is carbon-free.
Minnesota has two nuclear power plants on Prairie Island and Monticello owned by Xcel Energy. Xcel has said it will continue operating these facilities for at least the next few decades to support its zero-carbon goals.
Minnesota law currently prohibits the construction of new nuclear power plants in the state. Some Republican lawmakers have argued that the ban should be lifted to allow for new nuclear power generation, particularly smaller modular technology.
Are utilities saying they can meet these new standards?
The state’s largest utilities, including Minneapolis-based Xcel Energy and Duluth-based Minnesota Power, were cautiously supportive. They already have a goal of being zero-carbon by 2050, so that would bring that date forward by a decade.
“We’re really excited to be pushed to go faster,” said Chris Clark, president of Xcel in Minnesota, North and South Dakota, in an interview. “But we also know that it is a challenge.”
A big reason big utilities aren’t vetoing the law is that it includes exceptions and ways they can meet the standard without abandoning fossil fuels altogether.
For example, a utility could buy renewable energy credits to offset the electricity generated by a natural gas facility.
The draft law also contains so-called “off-ramps”. The state Public Utilities Commission could allow a utility to delay compliance if it would have a large impact on electricity rates or cause reliability issues.
“It’s a balancing mechanism to increase flexibility and address uncertainty about how to achieve a completely zero-carbon electrical system from the ground up,” said Allen Gleckner, director of clean electricity at nonprofit organization Fresh Energy. But he believes utility companies will be able to meet the standard by adding more sun and wind and new technologies such as solar energy battery storage.
Another exception gives utilities leeway for so-called “advantageous electrification” — for example, when a utility needs more capacity to switch people who use natural gas to heat their homes to electricity.
What was the reaction of member-owned cooperatives to the bill?
Some cooperatives have expressed concerns about meeting these standards while keeping costs under control. They are usually smaller and often have contracts to purchase electricity from fossil fuel power plants.
As a compromise, the bill was amended to give cooperatives and municipal energy agencies a little more time to transition.
They would need to be 60 percent carbon-free by 2030, instead of 80 percent like investor-owned utilities. But all utilities would need to reach the 100 percent standard by 2040.
Why is North Dakota joining the debate?
North Dakota produces a lot of electricity from coal and gas. Senior officials in that state have threatened a lawsuit over Minnesota’s bill, saying it would illegally restrict interstate commerce and hamper its ability to develop carbon capture technologies.
This isn’t the first litigation the two states have had on the matter.
North Dakota officials are suing Minnesota over its 2007 law, which essentially banned the state from importing electricity from new out-of-state coal-fired power plants. A federal court sided with North Dakota.
If the bill passes the Senate, what’s the next step?
The Senate will consider the same bill that the House of Representatives passed. If it passes, it goes to Walz, who has said he will sign it.