The Future of Electrical Energy in Minnesota
in 2040
Where are we today?
And what do we know about the current situation of electrical
energy?
Compiled by Ramya Winstead
National Electricity Generation by fuel, 1990-2035
Net electricity generation (trillion kilowatthours per year)
6
History
Projections
5
4
Coal
43%
Renewables
14%
Natural gas
25%
Nuclear
17%
45%
3
2
10%
23%
1
20%
Oil and other liquids
1%
0
1990
2000
2009
1%
2020
Source: History: EIA, Annual Energy Review 2009. Projections: National Energy Modeling System, run REF2011.D120810C.
2035
U.S. Energy Information Agency Excerpt
Report Number: DOE/EIA-0383ER(2011); Release Date: December 16, 2010
Coal remains the dominant energy source for electricity generation because of continued reliance on
existing coal-fired plants and the addition of some new plants in the absence of an explicit Federal policy
to reduce greenhouse gas emissions.
Concerns about greenhouse gas emissions continue to slow the expansion of coal-fired capacity in the
AEO2011 Reference case, even under current laws and policies.
Lower projected fuel prices for new natural gas-fired plants also affect the relative economics of coal-fired
capacity, as does the continued rise in construction costs for new coal-fired power plants.
Electricity generation from nuclear power plants grows 10 percent, from 799 billion kilowatthours in 2009
to 879 billion kilowatthours in 2035, accounting for about 17 percent of total generation in 2035
(compared with 20 percent in 2009).
Increased renewable energy consumption in the electric power sector, excluding hydropower, accounts
for 23 percent of the growth in electricity generation from 2009 to 2035. Generation from renewable
resources grows in response to key Federal tax credits. The share of generation coming from renewable
fuels (including conventional hydro) grows from 11 percent in 2009 to 14 percent in 2035.
Summary of Major Energy Legislation in MN Since 2004
Prepared by the Minnesota Office of Energy Security in Energy Policy and Conservation Report 2008
A. RENEWABLES PORTFOLIO STANDARD (RPS) (2007 MINNESOTA LAW, CHAPTER 3)
In February 2007, the Minnesota Legislature enacted legislation that created a renewable portfolio
standard (RPS) for Xcel Energy, created a separate RPS for other electric utilities,2 and modified the
state‟s existing non-mandated renewable-energy objective. Electricity eligible for the standards and the
objective include: solar, wind and hydroelectric facilities less than 100 megawatts (MW); hydrogen and
biomass, which includes landfill gas, anaerobic digestion; and municipal solid waste. The standard for
Xcel Energy requires that eligible renewable electricity account for 30 percent of total retail electricity
sales (including sales to retail customers of a distribution utility to which Xcel Energy provides wholesale
service) in Minnesota by 2020. Of the 30 percent renewables required of Xcel Energy in 2020, “at least”
25 percent must be generated by wind-energy systems, and “the remaining” 5 percent by other eligible
technologies.
The standard for other Minnesota utilities requires that eligible renewable electricity account for 25
percent of retail electricity sales to retail customers (and to retail customers of a distribution utility to
which one or more of the utilities provides wholesale service) in Minnesota by 2025.
The following utilities are subject to the statute: Xcel Energy, Minnesota Power, Otter Tail Power, Interstate Power & Light
Company, Northwestern Wisconsin Electric Company, Great River Energy, Minnkota Power Cooperative, Dairyland Power
Cooperative, Basic Electric Power Cooperative, East River Electric Power Cooperative, L&O Power Cooperative, Southern
Minnesota Municipal Power Agency, Western Minnesota Municipal Power Agency/Missouri River Energy Services,
Northern Municipal Power Agency, Minnesota Municipal Power Agency, and Central Minnesota Power Agency
Summary of Major Energy Legislation in MN Since 2004
Prepared by the Minnesota Office of Energy Security in Energy Policy and Conservation Report 2008
B. NEXT GENERATION ENERGY ACT OF 2007 (2007 MINNESOTA LAW, CHAPTER 136)
Energy Savings Goals - It establishes an energy savings goal for all utilities at 1.5% of annual retail
energy sales. The bill also sets goals to achieve a certain number of high-performance buildings within
Minnesota.
Community Based Energy Development - The Next Generation Act expands and strengthens
Minnesota‟s commitment to the development of locally-owned renewable energy projects. Previous
legislation also increases funding for community energy outreach through Clean Energy Resource Teams
(CERTS) throughout the state.
Climate Change and Greenhouse Gas Reduction - The bill establishes statewide GHG reduction goals
of 15 percent by 2015, 30 percent by 2025, and 80 percent by 2050.
Next Generation Energy Board - The board develops next generation energy and biofuels policy, and
makes recommendations to the Governor and Legislature about how the state can invest its resources to
most efficiently achieve energy independence, agricultural and natural resources sustainability, and rural
economic vitality.
Summary of Major Energy Legislation in MN Since 2004
Prepared by the Minnesota Office of Energy Security in Energy Policy and Conservation Report 2008
C. GREEN SOLUTIONS ACT (2008 MINNESOTA LAW, CHAPTER 340)
As part of the state‟s effort to adopt and implement a comprehensive plan to reduce greenhouse gas
emissions from the electricity generation sector, as required under Minnesota Statutes 2007 Supplement,
section 216H.03, the Minnesota Climate Change Advisory Group developed, through an extensive sixmonth stakeholder process, a list of recommended actions to achieve the state‟s reduction goals, and
submitted it to the 2008 legislature.
Among its recommendations was the adoption of a cap and trade program, under which greenhouse gas
emissions from individual sources are capped at a level that is reduced over time. Emitters can elect to
undertake actions to reduce emissions or, if it is more economical, purchase emissions from other
facilities that have reduced their emissions below their cap.
Minnesota Resource Assessment Study Excerpt
Prepared by the Minnesota Office of Energy Security and the Reliability Administrator
Based on the assumptions used in the modeling and the forecasting, the Office of Reliability Administrator
offers the following findings from this analysis:
Energy demand is likely to grow in the future;
While new technologies will have an important impact, they are not likely to be the „silver bullet‟ that
solves all of our energy issues; and
Resource planning will continue to survey long-term periods because of the number of years required to
plan, permit and construct facilities.
Economies tend to operate in cycles fluctuating between period of strong economic growth and periods of
recession. Planners must ensure an adequate and reliable supply of electricity for customers at all usage
levels regardless of any short-term economic fluctuations. As such, it is not advisable to base long-term
demand or facilities forecasting on short term economic activity that represents only part of a full
economic cycle. Rather, forecasting should take into account periods of strong economic growth, with
high customer demand, along with recessionary periods when customer demand may be lower.
Since the future is unknown, forecasting usually involves testing a number of different scenarios involving
high/low facilities/fuels/environmental costs.
Even with the RES and CIP mandates fully met, coal will continue to be a main fuel source for generation
used in Minnesota under any foreseeable future.
Distributed generation resources may play some role in allowing additional generation to interconnect to
the transmission grid, but that role will be very small unless and until significant transmission upgrades
are constructed in order to allow for additional distributed generation opportunities.
Minnesota Resource Map
Minnesota has no fossil fuel resources, but the western part of the State has wind energy potential, and cornfields in the south
and west provide feedstock for ethanol production. Minnesota‟s population and total energy consumption place the State in the
middle of national rankings. The industrial and transportation sectors lead State energy demand.
Source: State Energy Profiles, U.S. Energy Information Agency as of March 24, 2011
Minnesota’s Electric Energy Use by Type in 2011
The Renewable Energy Standard requires utilities to purchase power from renewable sources. The largest source of
new renewable energy in Minnesota is electricity generated by wind, as shown below. The best wind resources in
western Minnesota are part of a larger region stretching from Manitoba south to Texas in which wind blows fairly
continuously and consistently throughout the year, and thus provides a good place for wind turbines.
COAL (31,762,749 MWh)*
10.8%
1.3%
5.2%
0.6%
0.4%
NUCLEAR (12,978,916 MWh)*
23.7%
WIND AND OTHER RENEWABLES (5,914,443
MWh) *
NATURAL GAS (2,847,695 MWh) *
HYDRO (711,923.7 MWh) *
OTHER (328,580.2 MWh) *
58.0%
PETROLEUM (219,053.4 MWh) *
Source: Jan 2011 Report "Minnesota's Electric Transmission System - Now and the Future" submitted by The Offices of Energy Security and the
Reliability Administrator Minnesota Chamber of Commerce
Electricity Generation by Source – 2008 to 2035
AEO2011 Reference Case: Region - Midwest Reliability Council / West (MROW)
Renewables include conventional hydroelectic, geothermal, wood, wood waste, biogenic municipal waste, other biomass, solar
thermal, photovoltaics, and wind power. Includes electricity - only combined heat and power plants whose primary business is
to sell electricity, or electricity and heat to the public. Includes small power producers and exempt wholesale generators.
COAL
218.95
217.94
219.99
221.78
224.08
225.35
225.25
228.63
231.76
235.12
233.98
234.85
235.55
236.99
243.50
243.65
244.30
244.71
216.91
218.89
245.43
218.24
242.12
213.84
239.98
210.76
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
220
TOTAL GENERATION
2010
260
240
PETROLEUM, DISTRIBUTED GENERATION AND OTHERS
210.32
NATURAL GAS
2009
NUCLEAR
214.24
RENEWABLES
2008
ELECTRICITY GENERATION PER SOURCE (IN BILLION KWh)
280
200
180
160
140
120
100
80
60
40
20
0
Sources: 2008 and 2009: Energy Information Administration (EIA), Form EIA-759, "Monthly Power Plant Report"
Projections: EIA, AEO2011 National Energy Modeling System
MROW Forecasts for Generation, Consumption and End-use Prices
AEO2011 Reference Case: Region - Midwest Reliability Council / West (MROW)
TOTAL ELECTRICITY GENERATION (BILLION KWh)
TOTAL SALES (BILLION KWh)
END USE PRICES (CENTS PER KWh)
7.8
245.43
250
227.64
6.93
200
190
180
7.4
7.2
214.24
210
7
6.8
188.54
BILLION KWh
220
7.6
6.6
170
6.4
160
2035
2034
2033
2032
2031
2030
2029
2028
2027
2026
2025
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
6.2
2008
150
YEARS
Sources: 2008 and 2009 Electric power sector generation; Sales to utilities; Net imports; Electricity sales; Electricity end-use prices; Energy Information
Administration (EIA), Annual Energy Review 2009, DOE/EIA-0384(2009) (Washington, DC, August 2010) and supporting databases.
Projections: EIA, AEO2011 National Energy Modeling System
CENTS PER KWh
230
7.41
240
National Forecasts for Generation, Consumption and End-use Prices
TOTAL NET GENERATION TO THE GRID (BILLION KWh)
TOTAL ELECTRICITY USE (BILLION KWh)
END-USE PRICES (NOMINAL CENTS PER KWh)
16
5100
14
4900
4700
12
10
4300
4100
8
3900
6
3700
2035
2034
2033
2032
2031
2030
2029
2028
2027
2026
2025
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
4
2008
3500
YEARS
Sources: 2008 and 2009 Electric power sector generation; Sales to utilities; Net imports; Electricity sales; Electricity end-use prices; Energy Information
Administration (EIA), Annual Energy Review 2009, DOE/EIA-0384(2009) (Washington, DC, August 2010) and supporting databases.
Projections: EIA, AEO2011 National Energy Modeling System
CENTS PER KWh
BILLION KWh
4500
Carbon Dioxide Emissions by Sector and Source,
West North Central, AOE2011 Reference Case
COMMERCIAL
INDUSTRIAL
TRANSPORTATION
ELECTRIC POWER
EMISSIONS PER PERSON
280
260
240
220
200
180
160
140
120
100
80
60
40
20
Data shown for emissions from electricity only for Residential, Commercial, Industrial and Transportation sectors. Emissions from electric power sector are
distributed to end-use sectors
Data for Electric Power sector includes electricity only and combined heat and power plants whose primary business is to sell electricity
Sources: 2008 and 2009 Electric power sector generation; Sales to utilities; Net imports; Electricity sales; Electricity end-use prices; Energy Information
Administration (EIA), Annual Energy Review 2009, DOE/EIA-0384(2009) (Washington, DC, August 2010) and supporting databases.
Projections: EIA, AEO2011 National Energy Modeling System
2035
2034
2033
2032
2031
2030
2029
2028
2027
2026
2025
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
0
2008
CARBON DIOXIDE EMISSIONS (IN MILLION METRIC TONS EQUIVALENT)
RESIDENTIAL
General Information
Minnesota is expected to increase at an average rate of about 1.1 percent annually over the next few
years, based on the combined projections of all utilities serving Minnesota customers.
As of 2008, Minnesota has over 1,754 megawatts of wind energy capacity installed.
By diversifying Minnesota‟s energy portfolio with a healthy mix of traditional and less traditional
technologies, electricity can be made more reliable and perhaps less prone to price volatility. Traditional
non-renewable fuels for the generation of electricity include nuclear, coal, petroleum, and natural gas.
These fuels continue to provide the vast majority of our energy today.
The Minnesota Office of Energy Security is expanding its role to promote more and different energies by
focusing its research efforts and allotting grants to projects designed to implement new technologies.
Some of these efforts are:
•Renewable Energy Policy and Programs
Evolution from the Renewable Energy Objectives to the Renewable Energy Standards
Clean Energy Resource Teams (CERTs)
Green Pricing
Renewable Energy Tradable Credits
Net Metering
Wind Monitoring Program
•Renewable Fuels(Wind; Biomass Energy; Solar Energy; Hydroelectric Energy)
•Next Generation Energy Board
•Diesel Generators (Peaking Technology)
•Natural Gas
•Other Energy Technologies(Combined Heat and Power; Coal Gasification; Hydrogen and Fuel Cells)