Cleaner energy on the way in Minnesota
Mike Zaccardi, CFA, CMT
Who would’ve though Minnesota would be a hot spot. No, I’m not talking about that kind of hot spot. I’m referring to renewable energy. A major utility firm in the Land of 10,000 Lakes, Great River Energy, is planning a big change to their generation mix by phasing-out coal plants and adding huge amounts of green energy. But that’s not the interesting part of it all.
The big story that crossed the wires was GRE’s intent to install a utility-scale battery storage system.
We have all heard the narrative of less coal, more natural gas and vast increases in wind & solar. Battery storage is taking center-stage – in a big way. And Minnesota may be on the forefront.
Here is the plan GRE laid out in their recent long-term study and resulting recommendation:
· Close the 1.15GW Coal Creek Station by 2022
· Purchase 1.1GW of wind, mainly farmed from Minnesota, via financial deals
· Change the Spiritwood Station duel-fuel system to be natural gas only
· Install a 1MW, long-duration battery system
The plans fit into GRE’s recent history of divesting carbon-based generation. In total, Great River’s renewable capacity may climb to 1.76GW by the end of 2023 from its current level of just 660MW.
The shutdown of Coal Creek is a big deal. It is one of the largest coal producing units in MISO North, and can be an important piece of baseload generation during cold winter mornings. Some critics may say that retiring a bunch of coal could be risky during events like the Polar Vortex of 2014. Renewable generation also is usually soft during the coldest winter mornings and hottest summer afternoons.
It’s likely that other utilities keep up the trend as more Integrated Resource Plans are acted upon. The energy landscape in America continues to evolve. More storage technology is likely needed to support a grid moving away from coal and to wind & solar.
Chart used with permission from Koyfin.com