Minnesota Power makes progress on renewables goals

Minnesota Power has a number of renewable energy projects in hand and a number of others on the drawing board as it works to meet a Minnesota renewable energy mandate of 25% renewables by 2025.

Minnesota Power, part of Allete (NYSE: ALE), on Oct. 23 submitted its Renewable Energy Objective (REO) and Renewable Energy Standard (RES) Compliance Report to the Minnesota Public Utilities Commission. The report describes the utility’s progress in meeting a requirement to generate or procure enough renewable electricity to meet these percentages of total Minnesota retail electric sales: 2012 – 12%; 2016 – 17%; 2020 – 20%; and 2025 – 25%.

In the category of completed projects are:

  • Oliver 1 Wind – A 50.6-MW wind facility comprised of twenty-two 2.3 MW Siemens SWT-2.3-93 turbines located near Center, N.D. It was built by NextEra Energy Resources and began commercial operation in December 2006. Minnesota Power has a 25-year power purchase agreement (PPA) with NextEra for all energy, capacity and renewable attributes from Oliver 1.
  • Oliver 2 Wind – A 48-MW expansion of the original Oliver 1 wind facility comprised of thirty-two 1.5 MW GE SLE turbines with 77-meter rotors. The facility achieved commercial operation in December 2007. Minnesota Power has a 25-year PPA with NextEra for all energy, capacity and renewable attributes from Oliver 2.
  • Wing River C-BED Wind – A wind project comprised of one 2.5-MW Nordex N90 turbine located near Hewitt, Minn. This project began operation in July 2007 achieving two firsts: the first C-BED project in Minnesota to begin operation; and the first 2.5-MW Nordex turbine installation in the U.S. Minnesota Power has a 20-year PPA with Wing River LLC for all energy, capacity and renewable attributes from this project.
  • Taconite Ridge Wind – A 25-MW wind facility comprised of ten 2.5 MW Clipper C96 Liberty turbines located on the Laurentian Divide in Minnesota, on US Steel property. It was built by Minnesota Power as its first wind project to own, operate and maintain for long-term use as a rate-based renewable wind resource. It achieved commercial operation in June 2008.
  • Bison 1 – An 81.8-MW wind development near Center, N.D., comprised of 16 Siemens SWT-2.3-101 turbines and 15 SWT-3.0-101 turbines. It was built by Minnesota Power and it owns, operates, and maintains the facility for long-term use as a rate-based renewable wind resource. Bison 1 achieved commercial operation in two phases, the first in December 2010, and the second in December 2011.
  • Manitoba Hydro – This is a non-firm energy supply PPA with Manitoba Hydro. The PPA covers a period from May 1, 2011, through April 30, 2022.

Approved projects under construction:

  • Bison 2 – A 105-MW wind project near Center, N.D., made up of 35 Siemens SWT-3.0-101 turbines. It has a planned commercial operation date of December 2012. Minnesota Power will own, operate, and maintain the facility for long-term use as a rate-based renewable wind resource.
  • Bison 3 – A 105-MW wind project near Center, N.D., will be comprised of 35 Siemens SWT-3.0-101 turbines. The project has a planned commercial operation date of December 2012. Minnesota Power will own, operate, and maintain the facility for long-term use as a rate-based renewable wind resource.
  • Fond du Lac Hydro – An approximate 3,000 MWh upgrade at the Fond du Lac hydro facility. The project utilized $815,000 in American Recovery and Reinvestment Act grant funding to re-runner the facility along with other updates. This project is projected to be completed in 2013.

Planned Projects:

  • Rapids Energy Center Optimization – Minnesota Power plans to file a petition in the fourth quarter of 2012 seeking approval to move Rapids Energy Center, a biomass facility in Grand Rapids, Minn., from Minnesota Power’s non-regulated business into its regulated business. Minnesota Power will also be seeking approval for an optimization investment in the units to increase the biomass generation at Rapids Energy Center by about 56,000 MWh per year by 2015.
  • Hibbard Expansion – This is a planned 140,000 MWh per year increase in biomass generation at Minnesota Power’s Hibbard Energy Center located in Duluth, Minn.

Minnesota Power said its renewable portfolio exceeds the yearly Minnesota RES percentage as the result of high quality renewable project opportunities. Minnesota Power considers it prudent to continue to proactively secure good projects on the best available wind sites as well as secure long-term fuel supply for biomass power additions. “The Company’s strategic addition of renewable generation with acceptable costs and risks is consistent with Minnesota Power’s goals to reduce carbon and other emissions as it evolves its energy portfolio in response to ongoing energy policy changes,” the utility told the commission.

Utility outlines issues related to developing various renewables

In looking at problems and upsides of various renewable resources, the utility said:

  • Hydro – Minnesota Power knows of no new large hydro project sites in Minnesota. Even if sites existed, hydro development is realistically limited to expansions at existing impoundments due to anticipated resistance to new dams. There is hydro potential in the Canadian province of Manitoba but current Minnesota law does not allow renewable generation from hydro units of 100 MW or larger to apply towards Minnesota’s RES. Minnesota Power said it continues to evaluate innovative hydro development options to determine feasibility for these projects, and may revisit a Fond du Lac hydro addition as market conditions change.
  • Biomass – The key driver to developing new competitively-priced biomass generation is having enough supply of reasonably-priced fuel to support the expenditure of the large-scale capital that is required to build facilities. Concerns here include balanced forestry practices that maximize the production of biomass on a sustainable basis while maintaining the appropriate levels of diversity in the region’s forests. Minnesota Power’s biomass generation efforts are focused on existing owned sites and customer sites in order to leverage existing infrastructure to minimize capital expenditures and assure projects that are competitively priced with other renewable generation alternatives, the utility said.
  • Wind – Wind development continues to occur primarily in areas with the best wind resources: southwestern Minnesota as well as North and South Dakota, the company said. Over the past few years significant improvements in wind turbine technology (larger rotors and improved controls) and wind resource assessment (better siting and turbine layout) have enabled it to identify potential sites on the Iron Range in northeastern Minnesota and in North Dakota. Concerns about transmission and integration costs will continue for wind development in general as the penetration of wind power increases throughout the region. Minnesota Power said it executed a unique solution for its customers to provide transmission access to North Dakota wind resources through the purchase of the existing high voltage direct current transmission line that runs between the Square Butte substation near Center, N.D., and Minnesota Power’s Arrowhead substation near Duluth, Minn.
  • Solar – Recent technology advancements have sustained a trend of decreasing implementation costs for solar projects specifically at the residential and commercial levels. However, implementing solar generation in the near term within Minnesota Power’s service territory would be at a premium cost to other alternatives due to the high cost of the utility scale equipment, a moderate solar resource and the abundance of lower cost renewable options, the utility said. Solar equipment is expected to continue decreasing in cost due to technology development. Minnesota Power said it has a long history of encouraging the adoption of renewable energy such as solar photovoltaic systems. It currently supports retail customers in the residential and commercial segments who are interested in solar systems via the SolarSense program.

Although the penetration of intermittent resources such as solar and wind are presently at low enough levels that they do not significantly impact the system or market in Minnesota Power’s region, planned increases in these resources to serve both local and regional needs are expected to impact its customers in the future, the utility said. Minnesota Power noted that it has studied energy storage in order to prepare for future impacts of renewable additions.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.