Minnesota 2025 Energy Action Plan



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Minnesota 2025

Energy Action Plan


Report prepared for Minnesota Department of Commerce and the Minnesota Legislative Energy Commission

Submitted by Rocky Mountain Institute based on input from the 2025 Stakeholder Advisory Committee


Acknowledgements


Funding:

The information, data, or work presented herein was funded in part by the Office of Energy Efficiency and Renewable Energy (EERE), U.S. Department of Energy, under Award Number DE-EE0006885.


Project Team:

Becky Alexander (LHB)

Amanda Bilek (Great Plains Institute)

Maureen Colburn (LHB)

Stephen Doig (Rocky Mountain Institute)

Mark Dyson (Rocky Mountain Institute)

Erik Fowler (Rocky Mountain Institute)

Anthony Fryer (MN Department of Commerce)

Amira Hamdon (Great Plains Institute)

Brendan Jordan (Great Plains Institute)

Annie Levenson-Falk (Legislative Energy Commission)

Christa Owens Michelet (Rocky Mountain Institute)

Lola Schoenrich (Great Plains Institute)

Lise Trudeau (MN Department of Commerce)


Stakeholder Advisory Committee Members:

Massoud Amin, Technological Leadership Institute, University of Minnesota

Jeffrey Beale, Honeywell

Sheri Brezinka, US Green Building Council, Minnesota Chapter

Dave Chura, Minnesota Power

Joe Drapeau, New Flyer

Wayne Dupuis, Fond du Lac Reservation

Jason Edens, Rural Renewable Energy Alliance

Jenny Edwards, Center for Energy and the Environment

Katie Fernholz, Dovetail Partners

Ken Geisler, Siemens

Ben Gerber, Minnesota Chamber of Commerce

Richard Graves, Center for Sustainable Building Research

Katie Gulley, BlueGreen Alliance

Jeff Haase, Great River Energy

Zack Hansen, Ramsey County

Jen Hassebroek, City of Oakdale

Ryan Hentges, Minnesota Valley Electric Cooperative

Joe Houseman, Wellington Management

David Hughes, Target

Robert Jagusch, Minnesota Municipal Utilities Association

Bruce Jones, Minnesota State University Mankato

Justin Kaster, 2100 Advisors

Holly Lahd, Fresh Energy

Adeel Lari, Center for Transportation Studies, University of Minnesota

Nick Mark, CenterPoint Energy

Jennifer McLoughlin, City of Woodbury

Lissa Pawlisch, Clean Energy Resource Teams

Annie Perkins, Andersen Corporation

Dana Persson, Green Biologics

Kevin Schwain, Xcel Energy

Jodi Slick, Ecolibrium3

Brendan Slotterback, City of Minneapolis

Ken Smith, Ever‐Green Energy

Grace Xavier, 3M
Additional Contributions:

Special thanks to the stakeholders consulted during the preparation of this report:

Scott Norquist (3M), Will Phillips (AARP Minnesota), Brianna Halverson (BlueGreen Alliance), Jamie Fitzke (Center for Energy and Environment), Audrey Partridge, Anna Sherman (CenterPoint Energy), Gina Gore (City of Woodbury), Sarah Clarke (Clean Energy Economy MN), Fritz Ebinger (Clean Energy Resource Teams), JB Mathews (Cushman Northmarq), Richard Hermans (Daikin Applied), Chase Taylor (Dovetail Partners), Matt Schuerger (Energy Systems Consulting), Mike Harley (Environmental Initiative), Nina Axelson (Ever-Green Energy), John Frederick (Frederick Co.), Patrick Mathwig (Great Plains Institute), Dan Myers (Heartland Energy Solutions), Rep. Pat Garafolo , Sen. John Marty, Matt Prorok (Legislative Energy Commission), Rick Carter (LHB), Roopali Phadke (Macalester College), Chuck Wurzinger (Metro Transit), Lisa Barajas, Sara Smith, Jason Willett (Metropolitan Council), Dan King (Midwest Renewable Energy Tracking System), Thor Underdahl (Minnesota Power), Tim Sexton, Philip Shaffner (MN Dept. of Transportation), Kevin Hennessey, Bob Patton, Anna Sherman (MN Dept. of Agriculture), Lisa Hughes (MN Dept. of Employment and Economic Development), Jessica Burdette, Bill Grant, Michelle Gransee, Janet Streff (MN Dept. of Commerce), Anna Dirkswager, Mark Lindquist (MN Dept. of Natural Resources), Anna Henderson, John Saxhaug, Will Seuffert (MN Environmental Quality Board), Bill Black, Amanda Duerr (MN Municipal Utilities Association), Anne Claflin, Frank Kohlasch, Tim Nolan, David Thornton (MN Pollution Control Agency), Andrew Bahn, Chris Villarreal (MN Public Utilities Commission), Rolf Weberg (Natural Resources Research Institute), Barb Jacobs, Hannah Pallmeyer (Sen. John Marty’s Office), Sarah Russell (Target), Sarah Zaleski (US DOE), Erin Heitkamp (Wenck Associates).
Disclaimer:

The information, data, or work presented herein was funded in part by an agency of the United States Government. Neither the United States Government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States Government or any agency thereof. The views and opinions of authors expressed herein do not necessarily state or reflect those of the United States Government or any agency thereof, the State of Minnesota or any agency thereof, or the stakeholders who contributed to the report.


Table of contents

1

Table of contents 4

Glossary of Terms 6

Acronyms 6

List of figures 7

1. Executive Summary 8

2. Introduction 15

3. Minnesota’s Energy Landscape 17

4. Stakeholder identified strategies 36

A. Transportation 36

A1. Increase adoption of personal electric vehicles 39

A2. Electrify fleet vehicles 41

A3. Electrify buses 44

A4. Increase adoption of alternative-fuel heavy-duty vehicles 46

B. Energy supply and grid modernization 48

B1: Deploy advanced metering infrastructure (AMI) 50

B2: Enable smart inverter functionality 54

B3: Integrate energy storage and demand response 56

B4: Adopt time-based rates 59

B5. Expand and improve utility green energy options 61



C. Efficient buildings and integrated energy systems 65

C1. Adopt SB2030 as an optional stretch code 68

C2. Enhance energy data access 70

C3. Increase adoption of commercial building energy benchmarking and disclosure programs 73

C4. Improve building operations to capture energy efficiency opportunities 76

C5. Promote behavioral energy efficiency strategies 79

C6. Identify opportunities for thermal energy grids 81

C7. Support combined heat and power (CHP) 85



D: Industrial and Agricultural sectors 89

D1. Commercialize advanced biofuels and biobased chemicals 91

D2. Capture organic feedstocks through anaerobic digestion 95

D3. Promote industrial and agricultural efficiency practices 97

D4. Coordinate and promote the clean energy industry 100

E. Local Planning and Action 103

E1. Advance local energy planning 104

E2. Pursue near-term actions at the local level 109

5. Additional opportunities 113

6. Conclusions 114

Appendix A 115


Glossary of Terms




  • Advanced biofuels – energy sources derived from woody crops or agricultural waste and residues; have lower lifecycle emissions compared with conventional biofuels; also known as second-generation biofuels

  • Advanced metering infrastructure (AMI) – an integrated system of smart meters, communications networks, and data management systems that allows communication between customers and utilities

  • Alternative fuel vehicles (AFVs) – vehicles that are powered by fuels other than petroleum, including battery electric, hybrid gas and electric, natural gas, biofuels, and hydrogen fuel cells

  • Anaerobic digestion – a series of biological processes in which microorganisms break down biodegradable material in the absence of oxygen; by-product is combustible biogas, which can be used to generate electricity or heat, or can be processed into renewable natural gas and transportation fuels

  • Benchmarking and disclosure – voluntary or mandated programs in which a building’s energy use is measured and shared publicly in some manner

  • Biobased chemicals – chemicals derived from forestry and agricultural materials, rather than petroleum

  • Biofuels – energy sources derived from agricultural materials, forestry materials, and other biomass resources

  • Clean energy – low-emission energy sources, including renewables, and in some cases natural gas and nuclear energy

  • Combined heat and power (CHP) – co-generation of thermal and electrical energy

  • Demand response – a mechanism by which customers are compensated by the utility for shedding their load during times of peak energy demand

  • Distributed energy resources (DERs)smaller-scale, decentralized power sources and/or conversion equipment, including renewable energy, energy efficiency, demand response, and energy storage technologies

  • Electric vehicles (EVs) – vehicles that are powered by an electric powertrain

  • Energy efficiency – technology or processes used to reduce energy that is wasted, requiring less energy to provide the same service

  • Fossil fuels – hydrocarbon deposits formed by the decomposition of prehistoric organisms; includes coal, natural gas, and petroleum

  • Greenhouse gases (GHGs) –gases that contribute to the greenhouse effect by absorbing infrared radiation, including carbon dioxide, methane, and chlorofluorocarbons

  • Grid modernization – upgrades to the electrical grid infrastructure that support the integration of distributed energy resources and supporting technology

  • Renewable energy – Energy from sources that can be renewed within a reasonable amount of time, including solar, wind, hydro, tidal, geothermal, biomass

  • Retro-commissioning – a process for evaluating, adjusting, and/or replacing a building’s equipment, lighting, and control systems to reach optimal performance based on its design

  • Smart inverter – device that converts direct current to alternating current, and has bi-directional communication abilities, digital architecture, and software infrastructure

  • Thermal grids – grid that integrate sources of heating and cooling

  • Time-based rates – electricity rates that are based on the time at which energy is consumed to account for demand

  • Utility green power programs – programs offered by electric and natural gas utilities for customers to purchase clean energy

Acronyms


  • CEE: Center for Energy and Environment

  • CERTs: Clean Energy Resource Teams

  • CIP: Conservation Improvement Program

  • CSEO: Climate Solutions and Economic Opportunities

  • DEED: Minnesota Department of Employment and Economic Development

  • DLI: Minnesota Department of Labor and Industry

  • DNR: Minnesota Department of Natural Resources

  • COMM: Minnesota Department of Commerce

  • DOE: United States Department of Energy

  • EQB: Minnesota Environmental Quality Board

  • GPI: Great Plains Institute

  • MDA: Minnesota Department of Agriculture

  • MnTAP: Minnesota Technical Assistance Program

  • MPCA: Minnesota Pollution Control Agency

  • MRITS: Minnesota Renewable Energy Integration and Transmission Study

  • PUC: Minnesota Public Utilities Commission

  • RES: Renewable Energy Standard

  • USDA: United States Department of Agriculture

List of figures



Figure 1: Minnesota Energy Supply by Source, 2013 18

Figure 2: Renewables as a percent of Minnesota's total energy supply, 2005-2013 18

Figure 3: Minnesota electricity generation by source, 2005-2013 19

Figure 4: Estimated Minnesota energy use in 2013, by source and sector 20

Figure 5: Total Minnesota energy consumption, 1960-2013 22

Figure 6: Minnesota source energy use by sector, 2013 22

Figure 7: Minnesota fossil fuel use per capita, 2005 to 2013 23

Figure 8: Minnesota greenhouse gas emission trends by sector, 2005 to 2012 25

Figure 9: Minnesota forecasted greenhouse gas emissions and state goals 25

Figure 10: Map of Minnesota utility territories offering community solar, as of March 2016 30

Figure 11: Means of Transportation to Work, Minnesota 2013, U.S. Department of transportation 37

Figure 12: Net emissions from gasoline-fueled versus electric vehicles with different fuel mix scenarios. 38

Figure 13: Net emissions from different transportation fuels. 39

Figure 14: Total cost of ownership of conventional ICE vehicle versus electric vehicle at different levels of annual mileage. 42

Figure 15: AMI adoption by state, 2014 51

Figure 16: Minnesota source energy use by sector, 2013 66

Figure 17: Selected university, hospital, and municipal thermal energy projects in Minnesota by city, as of January 2016 83

Figure 18: Key elements of community energy planning. 107


1. Executive Summary

The 2025 Energy Action Plan lays out a path forward for Minnesota to help advance a clean, reliable, resilient and affordable energy system for Minnesota. Funded through a U.S. Department of Energy grant, the 2025 Energy Action Plan focuses on near-term, cross-sector strategies that add value to Minnesota’s dynamic energy landscape. While the scope of these strategies is wide, the Action Plan is not intended to be a comprehensive energy plan for the state.
A changing energy landscape

Minnesota is facing a rapidly changing energy landscape that offers opportunities in the near term to make progress towards clean energy while boosting the state economy. Several trends indicate a changing outlook for the state’s energy landscape:




  • Vehicle technology is becoming more efficient, with vehicles that run on electricity1 and other alternative fuels gaining2 market share.

  • The century-old energy production paradigm is quickly shifting. Clean energy resources are becoming cost-competitive with conventional energy resources3 and are becoming more appealing to consumers.4

  • Technology to allow the efficient use of energy is evolving quickly,5 and data to support energy efficiency investments is becoming increasingly accessible to utilities and consumers.6

  • Minnesota’s agricultural businesses and other industries continue to advance local energy resources and drive progress towards leadership in the clean energy economy.7

  • All the while, local governments and tribal nations in Minnesota, like others around the country, are increasingly advancing community-scale solutions to climate and energy challenges.8

These developments, coupled with federal environmental regulations, state policies, and state goals, can help Minnesota move toward a clean energy future. The current momentum has Minnesota poised to become an energy leader for the Midwest and the rest of the nation. Taking advantage of these opportunities over the next ten years will be pivotal in determining the state’s energy future. By acting now, Minnesota can position itself as a competitive player in a $200 billion national clean energy market and a $1.4 trillion global clean energy market.9


The 2025 Energy Action Plan identifies paths forward

With momentum building in the state, Minnesota is well positioned to become a clean energy leader for the Midwest and the rest of the nation. The Energy Action Plan identifies strategies with traction to move forward and capture these opportunities. The Action Plan tells the story of Minnesota's current energy landscape and identifies priority strategies with actionable steps to advance these strategies over the next ten years. This report also includes indicators that can be used to track and communicate the impacts of the Action Plan in the future.


Strategies were selected through a rigorous stakeholder engagement process. The Stakeholder Advisory Committee10 provided input in the development of technologies, strategies, and baseline and outcome indicators, and the committee steered the development of the 2025 Energy Action Plan through three meetings held between July and December 2015.
Stakeholders selected strategies based on a set of common criteria:

  • The strategy or technology’s potential impact to support Minnesota’s current goals (outlined in Table ES1 below) related to energy, climate and air quality, and environmental justice

  • The potential for the 2025 Energy Action Plan project to significantly advance progress towards clean energy on a particular strategy in the context of related projects in Minnesota

  • Anticipated benefits relative to costs

  • Commitment by stakeholders or other champions to advancing the strategy and ability to leverage additional resources

  • Potential to provide benefits across economic sectors, and

  • Ten-year timeframe for implementation.

Figure ES1: Noteworthy Minnesota clean energy policies and current status



Minnesota Next Generation Energy Act of 2007

Area

Goal/Requirement

Status

Per Capita Fossil Fuel Use (216C.05)

Reduce by 15 percent by 2015

On track – 14.7 percent reduction from 2007-2013

Energy Consumption (216C.05)Renewable Energy Goal

Derive 25 percent of total energy used in the state from renewable resources by 2025

Caution – Minnesota obtained 13 percent of its energy from renewable resources in 2013

Greenhouse Gas Emissions Reduction (MS 216H.02)

Reduce state greenhouse gas emissions 15 percent below 2005 base levels by 2015, 30 percent by 2025, and 80 percent by 2050

Not on track – According to a recent CSEO analysis, Minnesota is not on track to meet 2015 or 2025 goals.

Renewable Portfolio Standard (2007) (M.S. 216B.1691)

Renewable Electricity Standard

Derive 25 percent of retail electricity sold in the state from renewable resources by 2025

On track - Utilities retired Renewable Energy Credits (RECs) representing 14.8 percent of 2014 total retail sales in Minnesota11. Utilities are planning for renewable generation to meet or exceed future RES milestones.12

Solar Electricity Standard (2013) (M.S. 216B.1691)

Solar Electricity Production

Generate 1.5 percent of public utility retail electricity sales from solar energy by 2020. Goal: Generate 10 percent of all retail electricity sales from solar energy by 2030

On track – Utilities are planning for solar generation to meet or exceed the 1.5 percent standard.

Petroleum Replacement Goal (M.S. 239.7911)

Gasoline fuel content

30% renewable fuels in total gasoline sold or offered by 2025




Biofuel Content Mandate (M.S. 239.791)

Gasoline fuel content

10% ethanol or other approved biofuel in all gasoline fuel sold or offered




Biodiesel Content Mandate (M.S. 297.77)

Diesel fuel content

20% biodiesel in all diesel fuel sold or offered by 2018

Caution – Minnesota’s existing capacity can provide 55% of biodiesel to meet its 20 percent target.13 14

Abundant near-term opportunities

Importantly, strategies in this Action Plan do not require an act of Congress or additional legislation to be successful; strategies can be advanced immediately, either individually or in tandem. Within each strategy, cross-sector opportunities and related initiatives are identified. Dedicated leadership will be critical to the success of the Action Plan. Each strategy has a defined champion and key participants to move it forward over the next ten years.


Ultimately, the 2025 Energy Action Plan seeks to help Minnesota prepare for a changing energy landscape and take full advantage of the opportunities available today. The Action Plan aims to assist Minnesota in fulfilling—and in some cases, even exceeding—its energy policies and goals, and in so doing, advance a clean, efficient energy system for all Minnesotans. The strategies fall into five categories, which are summarized below:

  • Transportation;

  • Energy supply and grid modernization;

  • Efficient buildings and integrated energy systems;

  • Industry and agriculture; and

  • Local planning and action.

Transportation

In 2014, Minnesotans spent $11 billion on transportation fuels,15 the majority of which are imported from out of state. The opportunity to keep transportation fuel dollars in the start and increase the sector’s clean energy footprint is significant. Stakeholders’ recommendations for the transportation sector fall into two key categories: electric vehicles and alternative fuel vehicles.
Electric vehicles (EVs) offer reduced fuel and operations and maintenance costs, as well as decreased air pollution, and are becoming more cost-effective. Stakeholders recommended the following strategies related to EVs:

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