Minnesota 2025 Energy Action Plan



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Source: Clean Energy Resource Teams
Looking ahead

Minnesota’s energy landscape is certainly changing, due to national and state policies, changing customer preferences, and technology development. Recent developments, such as Xcel Energy’s proposal to close two large coal units early, illustrate a changing energy paradigm. Due to acceleration in technical innovation and expanding influence of world energy markets the number of variables facing the energy industry has increased dramatically over recent years. The Climate Solutions and Economic Opportunities (CSEO) initiative, an interagency collaboration led by the Environmental Initiative, demonstrates a range of possible scenarios for Minnesota’s energy future. CSEO’s modeling illustrates that Minnesota may fall short of meeting core state energy policy goals, but a number of additional pathways to achieve greenhouse gas reductions exist.


Opportunities for further progress

While Minnesota has made great progress towards meeting its energy goals, there is opportunity for further progress. The stakeholder engagement process that drove the creation of this Energy Action Plan led to the identification of many strategies with the potential to significantly advance clean energy and leverage opportunities for a clean, affordable, reliable, and resilient energy system.


To highlight pathways for making progress towards these goals, this action plan outlines strategies in five general categories:

  • Transportation;

  • Energy supply and grid modernization;

  • Efficient buildings and thermal energy;

  • Industrial and agricultural sectors; and

  • Local planning and action.

Four of these categories represent discrete energy-intensive sectors of the Minnesota economy. Action in these sectors is possible at both the state and local levels, and strategies discussed in these sections highlight roles for a wide range of actors. The fifth section is focused on the specific ways in which local jurisdictions (cities and communities) and tribal nations can take meaningful action.


Guidelines to strategy structure

Each of the five chapters of this Energy Action Plan contains a number of distinct Strategies. Each strategy, while consisting of a number of specific recommendations, is, as a whole, meant to address a specific near-term opportunity for Minnesota to make further progress in meeting its clean energy goals. The strategies included in this document are recognized as having high potential for impact and near-term opportunities for action.


Each strategy includes a collection of Actions, discrete recommendations that together will lead to the strategy’s success. These are concrete steps, each with identified Champions and/or Key Participants, that can be undertaken in the near term and whose progress can be measured. Champions are those that can drive the actions to successful completion, while key participants are those that are necessary to engage in the process but may not play the primary leadership role.
Each strategy also notes a number of Success Factors. Success factors are criteria that must be true for the strategy to be successful. Ensuring that these success factors are in place, may take extra effort beyond the identified actions to be realized. We note these success factors in order to flag potential areas for further exploration, and highlight important considerations for strategy success that champions and participants can track in their efforts.
Progress toward success in each strategy can be tracked by Indicators of Strategy Success. Where available, we note the source of existing baseline data that can be used to construct these indicators. However, these data are often not readily available. In these cases, we note the key indicators that champions and stakeholders should track in order to demonstrate progress.
Given the increasingly interconnected nature of energy sectors and jurisdictions, each strategy also notes Cross-Sector Opportunities and Synergies where the content of one strategy may influence or depend on another strategy in this document. Highlighting these relationships can help stakeholders “connect the dots” and get a sense of complementary activities and opportunities in the state. Table 3 lists the strategies contained in this report and indicates the breadth of each strategy’s cross-sector opportunities.
Each strategy in this Plan already has significant momentum behind it in Minnesota and in many cases at a national level. We highlight Ongoing Minnesota Initiatives and Other Resources for each strategy to note activities and resources that champions, stakeholders, and observers can use to gather more information about best practices, context, and lessons learned in the topic area covered by each strategy.
Table 3: Strategies and cross-sector opportunities

 

 

 

 

Cross-sector opportunities

Sector

Strategy

Purpose

Transportation

Energy Supply and

Grid Modernization



Efficient Buildings

and Integrated Energy Systems



Industrial and

Agricultural Sectors



Local Planning

and Action



Transportation

Increase adoption of personal electric vehicles

Electric vehicles offer reduced emissions and lower operating costs compared to conventional vehicles

 

 

 

 

 

Electrify buses

Electric buses offer increased fuel efficiency and reduced air emissions.

 

 

 

 

 

Electrify fleets

Electric vehicles in high-mileage fleets offer increased economic benefits.

 

 

 

 

 

Increase adoption of alternative-fuel heavy-duty vehicles

Heavy-duty vehicles powered by renewable natural gas offer emissions savings.

 

 

 

 

 

Energy Supply & Grid Modernization

Deploy advanced metering infrastructure (AMI)

AMI allows for 2-way communication between customer meters and the utility.

 

 

 

 

 

Enable smart inverter functionality

Smart inverters allow utilities to better integrate solar power with the grid.

 

 

 

 

 

Integrate energy storage and demand response

Storage and demand response can reduce peak power demands and customer costs.

 

 

 

 

 

Adopt time-based rates

Time-based rates send a signal to customers to limit consumption during peak times.

 

 

 

 

 

Expand and improve utility green energy options

Expanded utility offerings can meet customer demand for green energy.

 

 

 

 

 

Table 3 (continued): Strategies and cross-sector opportunities.



 

 

 

 Cross-sector opportunities 

Sector

Strategy

Purpose

Transportation

Energy Supply and

Grid Modernization



Efficient Buildings

and Integrated Energy Systems



Industrial and

Agricultural Sectors



Local Planning

and Action



Efficient Buildings and Integrated Energy Systems

Adopt SB 2030 as an optional stretch code

Zero energy and low-energy options reduce energy use in buildings.

 

 

 

 

 

Enhance energy data access

Access to standardized energy data allows customers to make informed decisions about their energy use.

 

 

 

 

 

Increase adoption of commercial building energy benchmarking and disclosure programs

Benchmarking and disclosure programs can enable energy savings in existing buildings.

 

 

 

 

 

Improve building operations to capture energy efficiency opportunities

Building operators ensure that buildings perform efficiently and as designed.

 

 

 

 

 

Promote behavioral energy efficiency strategies

Non-financial motivators can lead to energy savings.

 

 

 

 

 

Identify opportunities for thermal energy grids

District energy can be expanded to existing networks to increase efficiency.

 

 

 

 

 

Support combined heat and power (CHP)

CHP can increase energy efficiency by integrating electrical and thermal energy.

 

 

 

 

 

Table 3 (continued): Strategies and cross-sector opportunities.



 

 

 

 Cross-sector opportunities

Sector

Strategy

Purpose

Transportation

Energy Supply and

Grid Modernization



Efficient Buildings

and Integrated Energy Systems



Industrial and

Agricultural Sectors



Local Planning

and Action



Industrial and Agricultural Sectors

Commercialize advanced biofuels and biobased chemicals

Leverage agriculture and forestry sectors to produce biofuels and biobased chemicals.

 

 

 

 

 

Capture organic feedstocks through anaerobic digestion

Anaerobic digestion uses waste material to produce renewable natural gas, heat, and electricity.

 

 

 

 

 

Promote industrial efficiency practices

Industrial facilities can take advantage of opportunities to increase efficiency and save money.

 

 

 

 

 

Coordinate and promote clean energy industry

Increase coordination and communication across clean energy industry to maximize economic development.

 

 

 

 

 

Local Planning and Action

Advance energy planning at the local level

Third parties can support local governments to plan for energy efficiency and renewables.

 

 

 

 

 

Pursue near-term actions at the local level

Local governments can leverage their unique authority to advance clean energy.

 

 

 

 

 

References




4. Stakeholder identified strategies
A. Transportation
Section summary

The transportation sector accounts for more than 28 percent of the state’s primary energy use and 25 percent of the state’s greenhouse gas emissions.65,66 The transportation sector also accounts for well over 50 percent of Minnesotans’ energy spending. 67 In 2014, Minnesotans spent $11 billion on transportation fuels, the vast majority of which are imported from out of state. 68


The opportunity to reduce the cost of transportation 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

Electric vehicles (EVs) are quickly becoming a desirable option for consumers, due to rapid advances in technology and declines in cost. Compared with conventional vehicles, EVs offer reduced fuel and operations and maintenance costs, as well as decreased air pollution. Stakeholders recommended several actions related to electric vehicles:




  • Increase adoption of personal electric vehicles through bulk discount arrangements, incentives for new EV purchases, and expanded workplace charging;

  • Electrify fleet vehicles by creating a bulk purchase arrangement and convening an EV procurement workshop for fleet managers; and

  • Electrify buses through validating lifecycle cost studies and demonstrating electric buses on urban and suburban transit routes.


Alternative fuel vehicles

Alternative fuel vehicles (AFVs)—which run on energy sources other than petroleum—are also an attractive transportation option. AFVs can bolster the state economy, since their fuel sources can be produced in Minnesota. Further, their carbon emissions are lower than conventional vehicles, and they offer longer ranges than electric vehicles. Stakeholders recommended that Minnesota:




Energy profile




In 2014, Minnesotans spent $11 billion on transportation fuel, which are imported from out of state. Adopting electric vehicles and alternative fuel vehicles will allow Minnesota to keep more energy dollars in the state.
The transportation sector is a major source of energy use, greenhouse gas emissions, and energy-related costs in Minnesota. The transportation sector accounted for 28 percent of the state’s energy use and for 25 percent of the state’s greenhouse gas emissions in 2012, and for over 50 percent of Minnesotans’ spending on energy in 2013. 69 70 71 Between 2005 and 2012, transportation sector greenhouse gas emissions declined by eight percent, which can be attributed to higher fuel efficiency, according to the Minnesota Pollution Control Agency (MPCA).72 Looking ahead over the next decade, MPCA projects transportation sector emissions to remain roughly stable.73
In 2014, Minnesota’s system of roads carried approximately 57 billion vehicle miles of travel (VMT), with an annual per capita VMT of roughly 11,000 miles (see Figure 11 below). According to a 2013 US Department of Transportation survey, 78 percent of Minnesotan commuters report driving alone to work, roughly nine percent carpooling and three percent using transit.
Figure 11: Means of Transportation to Work, Minnesota 2013, U.S. Department of transportation74


Means of Transportation to Work

Number

Percent Total

Drive alone

2,136,394

78.1%

Carpool

237,894

8.7%

Transit

94,172

3.4%

Bicycle

20,803

0.8%

Walked

79,106

2.9%

Other means (including taxi)

22,648

0.8%

Worked at home

145,028

5.3%

Total

2,736,045

100.0%

Minnesotans spent over $11 billion in 2014 on transportation fuel, including gasoline and diesel,75 which are imported from out of state. Minnesota has increasingly become a leader in biofuel production from local resources and related policymaking. The state requires that motor gasoline sold in the state be at least a ten percent blended ethanol mixture; further, the state’s biodiesel mandate requires that diesel fuel sold in the state contain at least ten percent biodiesel from April through September, and at least five percent in the remaining months.76 Finally, Minnesota’s Petroleum Replacement Goal aims to have biofuel comprise at least 30 percent of total gasoline sold or offered for sale in the state by 2025.77 The Minnesota Department of Agriculture has concluded that the ethanol industry contributes five billion dollars in total economic output and more than 12,600 jobs, and in 2012, Minnesota ranked fifth nationally in ethanol production.78


Summary of opportunities

The stakeholder advisory committee has identified the following opportunities to expand and accelerate clean energy and reduce the economic cost of transportation in Minnesota. These opportunities fall into two major categories: electric vehicles (EVs) and alternative fuel vehicles (AFVs).
Electric vehicles

Electric vehicles – which are propelled by electric motors alone or in combination with small combustion engines – are quickly becoming a viable choice for consumers due to rapid advances in technology and cost declines. Electric vehicles hold several advantages over conventional internal combustion engine (ICE) vehicles, including lower operating and maintenance costs. These two factors led the Edison Electric Institute to conclude that although the upfront cost of an EV is often higher than a conventional car, the lifetime cost can be far lower.79 In addition, EVs have no tailpipe emissions; EVs that are charged with electricity from zero-emission generators cause no air pollution.


Electric vehicles that are charged using fossil fuel-based electricity still cause emissions. However, several factors indicate that the emissions caused by EVs in Minnesota are likely less than those of ICE vehicles. First, over half of Minnesota EV drivers in a recent survey reported that they took service under a renewable energy-sourced electricity rate, such as Xcel’s Windsource, offsetting their short-run emissions,80 and Great River Energy offers renewable electricity for EVs at no added cost when EV owners sign up for an off-peak EV rate. Second, the grid as whole is getting cleaner, with an announced proposal to retire a major coal-fired power plant in Minnesota81 and continued growth in renewables, meaning that the emissions intensity of EVs purchased today is likely to continue declining.

illustrates the emissions impact on a per-mile basis of an ICE vehicle versus an EV. Electric vehicles emit less CO2 per mile than traditional vehicles, even when accounting for the additional CO2 emissions inherent in manufacturing EVs,82 which would reduce the savings shown in the chart below by only two to five percent.



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

Source: GREET 2015 Lifecycle GHG Model default results, Argonne National Laboratory. Figure authored by GPI, March 2016


However, EVs do present some challenges. Most electric vehicles have limited range compared to ICEs; “range anxiety” is a common concern among those considering an EV purchase, charging infrastructure is not yet ubiquitous, and charging times can be much longer than refueling a liquid-fueled vehicle. While refueling is a common concern among those considering an EV purchase, EV owners can mitigate “range anxiety” with trip planning tools. Fortunately, battery technology is rapidly evolving, costs are declining up to 14 percent per year, and charging technology is improving.83 At least three car models are announced for 2017-18 that will have more than 200 miles range and cost under $40,000. These advances combined with changes to the grid indicate that, over the next decade, the future of electric vehicles looks bright.
This section identifies opportunities to accelerate adoption of personally-owned EVs, EVs for fleets, and electric buses.
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