Minnesota Power retires one Taconite Harbor coal unit, to shut others in 2016

Minnesota Power, a division of ALLETE Inc. (NYSE: ALE), on July 9 laid out the next steps in its EnergyForward plan, which will reduce carbon emissions, increase the use of renewable resources and add natural gas to meet customer electric service needs over the next 15 years and beyond.

EnergyForward, introduced in 2013, is Minnesota Power’s roadmap for achieving a diversified energy supply of one-third renewable resources, one-third coal, and one-third natural gas. The next steps in the plan include:

  • Economic idling of the company’s Taconite Harbor Energy Center in the fall of 2016 and ceasing coal operations there in 2020.
  • Adding 200 MW-300 MW of cleaner and flexible natural gas generation to the company’s portfolio within the next decade.
  • Building both large- and small-scale solar generation.
  • Expanding the potential for additional energy efficiency savings.

“Minnesota’s energy landscape continues to evolve, and EnergyForward is helping our region adapt to changing policy in ways that protect affordability and uphold reliability for our customers,” said ALLETE Chairman, President and CEO Alan R. Hodnik. “This is Minnesota Power’s way of answering the nation’s call to reduce carbon and mitigate climate change. The cost of building and fueling natural gas generation has dropped significantly in recent years and along with other key steps in our plan, we can reduce cost risks for customers by adding this least-cost resource.”

Following careful study, the company plans to cease coal operations at Taconite Harbor Units 1 and 2 in Schroeder, Minn., by the end of 2020. As part of this transition and taking advantage of trends in lower cost replacement energy supplies from wholesale markets, the company will idle Taconite Harbor in the fall of 2016. The decision to idle the plant rather than close it completely in the near-term will give the company more flexibility at a time when considerable change is occurring in energy supply and policy. If necessary, with appropriate notice, the idled units can be restarted. The company also plans to further reduce emissions and continue operating two smaller units at its largest generating station, the Boswell Energy Center.

“Planning for a smooth evolution away from our smaller coal units is an important part of EnergyForward,” said Minnesota Power Vice President of Strategy and Planning Al Rudeck. “We will assist the 42 Taconite Harbor employees in finding new positions within the company. We will also work with the North Shore community through this transition, exploring future options for the plant that may include refueling, re-missioning or retirement. There is valuable port, rail and other associated infrastructure at the facility site that may catalyze future economic development and business growth opportunities.”

The company’s actions are estimated to reduce carbon emissions across its system 20% by 2020 and 30% by 2025. Minnesota Power has already taken significant steps toward a more balanced energy supply, including:

  • Renewable resources: Built and secured almost 625 MW of wind capacity; upgraded existing hydro stations in Minnesota and signed a contract with Manitoba Hydro to purchase renewable hydropower starting in 2020.
  • Transmission: Certificate of Need approved by state regulators for the Great Northern Transmission Line. The 500-kV line will deliver more than 350 MW of carbon-free hydropower from Manitoba Hydro to Minnesota Power customers.
  • Solar power: Announced plans to partner with Camp Ripley on a 10-MW large-scale solar array; began offering electric residential and business customers free solar energy analysis; developing a community solar garden pilot program.
  • Cleaner power plants: Making significant investments to reduce emissions and increase efficiency, including a project now underway to reduce 90% of mercury emissions at the coal-fired Boswell 4, the largest unit in Minnesota Power’s fleet. It has converted the company’s 110-MW Laskin Energy Center in Hoyt Lakes, Minn., from coal to cleaner-burning natural gas. In addition, one of three coal units at Taconite Harbor Energy Center was retired in May of this year.
  • Energy efficiency and conservation: Regularly meet and exceed the state’s annual 1.5% energy savings goal through the Power of One program to help customers reduce energy use and manage their energy bills.
  • Customer service and infrastructure upgrades: Deployed smart meters for about 25 percent of customers, improving system communications and efficiencies in outage management; plans to deploy these meters system-wide over the next few years, also enabling new program options to meet the ongoing needs of customers.

“We are creating a successful roadmap to a cleaner energy future,” Hodnik said. “Our significant actions to date have shifted Minnesota Power’s portfolio from 95 percent coal-based to a 75 percent coal and 25 percent renewable energy mix, moving toward a supply that has one-third of our power coming from coal, one-third from natural gas and one-third from renewable resources. Each year, our customers are served by electricity which comes from a more diverse set of clean power sources, and we are meeting our goals in a way that protects our customers, the communities we serve and the quality of life in our region.”

New resource plan will cover the various aspects of EnergyForward

Minnesota Power intends to outline its final recommendations for the next phase of its EnergyForward plan in an Integrated Resource Plan, to be filed with the Minnesota Public Utilities Commission by Sept. 1.

The current or former coal plants are:

  • The Taconite Harbor Energy Center is located at Schroeder, Minn. It consists of three 75-MW units and fires low-sulfur, sub-bituminous coal.
  • The Boswell Energy Center is located at Cohasset, Minn. Boswell is a four-unit plant. It burns low-sulfur, sub-bituminous coal from the Powder River Basin in Wyoming. Units 1 and 2 are 65 MW each, Unit 3 is 355 MW and Unit 4 is 585 MW.
  • The Laskin Energy Center is located on Colby Lake between Aurora, Minn., and Hoyt Lakes, Minn. Units 1 and 2 are 55 MW each.

Minnesota Power had announced on July 2 that Laskin Units 1 and 2 completed commissioning and began creating electricity fueled by natural gas on June 16 and June 3, respectively. The plant’s two 55-MW coal units were taken offline for the conversion in early March, about two weeks after the Laskin station received its last trainload of coal. As a natural gas “peaking plant,” Laskin will not operate 24/7 as it once did, but will instead generate power when demand and economics dictate, serving as a capacity resource and price hedge for customers. Work inside Laskin, which started in March of this year, involved replacing the old coal burners with new natural gas burners and installing new electronic controls. Participating contractors included the Jamar Company, Hunt Electric, TKDA, and Lakehead Constructors.

Minnesota Power provides electric service within a 26,000-square-mile area in northeastern Minnesota, supporting comfort, security and quality of life for 144,000 customers, 16 municipalities and some of the largest industrial customers in the United States.

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.