Minnesota 2025 Energy Action Plan

Increasing adoption of personal electric vehicles

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

  • Encouraging electric vehicles in fleets by creating a bulk purchase arrangement and convening an EV procurement workshop for fleet managers; and

  • Promoting electric buses by validating lifecycle cost studies and demonstrating electric buses on urban and suburban transit routes.

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

    • Increasing adoption of heavy-duty alternative-fuel vehicles that use natural gas from anaerobic digestion as a fuel source.

    Energy supply and grid modernization

    Electricity generation in Minnesota accounts for 29 percent of total energy use in the state, with the majority coming from coal.16 Minnesota has abundant, clean wind and solar resources, and in 2015, 21 percent of the state’s electricity came from renewable energy.17
    In order to promote local resources and keep additional energy dollars in the state, Minnesota can effectively integrate additional clean energy resources onto the grid, and establish pricing signals that more accurately capture the cost of electricity generation. Stakeholders’ recommendations for the energy supply sector fall into two key categories: grid modernization and pricing and tariffs.
    Modernizing the grid will enable more two-way flows of electricity, information, and value, and will allow for the expansion of large-scale, variable renewable energy sources. Stakeholders identified the following strategies to modernize the grid:

    • Deploying advanced metering infrastructure (AMI) to allow for communication between the utility and the grid;

    • Enabling smart inverter functionality to allow utilities to better integrate increasing levels of solar power with the grid; and

    • Integrating energy storage and demand response to reduce peak power demands, lower customer costs, and enable additional renewable energy penetration.

    Updated pricing and tariffs can better reflect the grid-level costs of consumption, and can empower customers with choices, allowing them to reduce their energy bills and reduce costs for the entire energy system. Stakeholders identified the following strategies related to pricing and tariffs:

    • Adopting time-based rates to more accurately capture the cost of electricity generation and reduce overall costs to the grid by avoiding investment in peaking capacity; and

    • Expanding and improving utility green power options to meet increasing customer demand for renewable electricity and renewable natural gas.

    Efficient buildings and integrated energy systems

    Residential and commercial buildings account for two-thirds of the state’s electricity use and more than half of natural gas delivered in Minnesota.18 Minnesota has demonstrated national leadership and progress toward an energy efficient building stock already,19 which has set the stage for even more substantial energy savings.
    New buildings present an excellent opportunity to design for optimal energy performance right from the start. Stakeholders recommended the following strategies related to new buildings:

    • Adopting voluntary low- or zero-energy building codes for new buildings and major renovations;

    • Training architects, engineers, and contractors to construct low-energy or net-zero energy buildings.

    Existing buildings will continue play a key part in the energy equation over the next decade. Stakeholders recommended the following strategies related to existing buildings:

    • Enhancing customer access to energy data through a standardized data protocol in order to unlock energy savings;

    • Promoting the adoption of energy benchmarking and disclosure programs by educating local governments and tribal nations about the benefits and available software tools;

    • Improving buildings operations through retro-commissioning and ongoing commissioning, building operator training, and advanced buildings controls; and

    • Incorporating behavioral strategies into energy efficiency programs to capture cost-effective energy reductions and sustain savings over time.

    Integrated energy systems offer the opportunity to optimize energy use across buildings. Strategies to advance integrated energy systems include:

    • Identifying opportunities for thermal energy grids and integrating existing thermal grids with district energy systems, and

    • Supporting combined heat and power (CHP) development by advancing the recommendations from the Minnesota Department of Commerce’s 2015 CHP Action Plan.

    Industrial and agricultural sectors

    Minnesota’s industrial and agricultural sectors contribute significantly to the state’s economy, and to the state’s energy use. Minnesota has been a national leader in bioenergy development,20 and industries have begun making progress toward increased energy productivity.21 Still, there remain significant opportunities for Minnesota’s agricultural and industrial sectors continue Minnesota’s economic growth through bioenergy, energy productivity, and clean energy development.
    Promoting bioenergy in the agricultural sector allows Minnesota to build upon its existing bioenergy resources and leadership to create low-carbon fuels for a variety of uses. Stakeholders identified the following strategies to promote bioenergy:

    • Commercializing advanced biofuels and biobased chemicals through supply chain mapping, addressing feedstock supply and infrastructure, and identifying and addressing permitting barriers.

    • Capturing organic feedstocks through anaerobic digestion by resetting the conversation on anaerobic digestion, incorporating anaerobic digestion into MPCA’s solid waste hierarchy, and establishing a public-private partnership to demonstrate an anaerobic digestion project incorporating biogas.

    Reducing wasted energy and promoting clean energy focus in Minnesota’s industries will lower energy costs, improve competitiveness, and benefit the state’s economy. Stakeholders identified the following strategies to promote energy efficiency and clean energy:

    • Promoting industrial and agricultural efficiency practices by sharing state and federal programs to improve energy productivity, and strengthening peer networks to share best practices on energy management.

    • Coordinate and promote the clean energy industry to coalesce Minnesota’s energy and business community around the state’s competitive strengths in clean energy.

    Local planning and action

    Leading local governments and tribal nations in Minnesota are demonstrating that it is possible to make progress towards a cleaner, more resilient energy system at the local level, for example through voluntary participation in challenges around best practices.22 Understanding that many changes start at the local level, stakeholders identified strategies to advance local energy planning and pursue near-term actions at the local level.

    • Local energy planning actions include energy data collection and analysis, integrating energy and resilience planning into comprehensive planning and other planning efforts, and engaging communities in a statewide energy challenge.

    • Near-term actions at the local level include adopting best practices, addressing energy development in local ordinances, creating predictable permitting for distributed generation, publicizing existing programs, and developing energy and climate goals.

    Additional opportunities

    The strategies in this Energy Action Plan were selected based on common criteria, among them, potential to drive progress in the state in the near-term. However, stakeholders identified many more strategies that did not meet all the selection criteria, but will likely be relevant in shaping Minnesota’s energy system. These additional opportunities are listed below and outlined further in the full report.

    • Autonomous electric vehicles.

    • Vehicle miles traveled (VMT)-based pricing.

    • An expanded Renewable Portfolio Standard (RPS).23

    • Expanded incentives for distributed energy resources (DERs).

    • Geothermal energy.

    • Distributed generation.

    Cross-sector opportunities

    All of the strategies in this Action Plan have important relationships with strategies other sectors. Notably, local governments and tribal nations have a key role to play in driving and executing community-level action to make progress in each of those sectors. This report has laid out where these cross-sector opportunities may be most important, in order to let stakeholders focused on one particular opportunity know where their actions may influence or depend on the actions of others.
    Capturing the momentum

    This Energy Action Plan identifies strategies to capture the large opportunity Minnesota has to make progress towards existing goals, develop a competitive advantage in the clean energy industry, and advance Minnesota’s leadership in the region and the nation. As state- and national-level clean energy trends accelerate, the report identifies how Minnesota can act now to capitalize on its ongoing clean energy initiatives, leverage local renewable natural resources, drive growth in an important sector of the state economy and advance a clean, reliable, resilient and affordable energy system for all Minnesotans.


    2. Introduction

    For decades, Minnesota has been on the leading edge of energy efficiency and renewable energy policy. Today, Minnesota is well positioned to expand its leadership in the Midwest and, increasingly, the rest of the nation. The 2025 Energy Action Plan lays out a path to enable the state to meet or exceed ambitious renewable energy and energy efficiency goals, while strengthening the state’s economy.

    Today, Minnesota is well positioned to become an energy leader for the Midwest and, increasingly, the rest of the nation.

    Funded through a U.S. Department of Energy grant, the 2025 Energy Action Plan outlines actionable steps for priority strategies and technologies over the next ten years. The Action Plan includes indicators that illustrate Minnesota's current energy landscape, and can be used to track and communicate the impacts of the action plan. Ultimately, the Action Plan aims to help advance clean and affordable energy for all Minnesotans.

    Purpose statement

    The purpose of the 2025 Energy Action Plan is to develop indicators and action plans to significantly advance a number of strategies and technologies for clean, efficient energy in Minnesota between now and 2025. Building upon related efforts, the Energy Action Plan will develop recommended next steps to leverage near-term opportunities to increase clean, affordable, reliable, and resilient energy in the state.

    Intended audience and scope

    The intended audience of the 2025 Energy Action Plan includes the Legislative Energy Commission, the Minnesota Department of Commerce, local government, business leaders, nonprofit professionals, university and academic professionals, and the broader Minnesota public.

    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, this is not intended to be a comprehensive energy plan for the state. The 2025 Energy Action Plan contains recommended strategies under five categories:

    • Transportation;

    • Energy supply and grid modernization;

    • Efficient buildings and integrated energy systems;

    • Industry and agriculture; and

    • Local planning and action.

    Project team

    The Stakeholder Advisory Committee steered the development of the 2025 Energy Action Plan through three meetings held between July and December 2015 and through additional engagement outside of these meetings. The Committee ultimately selected the strategies and the baseline and outcome indicators. See Appendix A for a list of participants and observers.
    The Minnesota Department of Commerce and the Legislative Energy Commission provided high-level guidance to assure that the project meets guidelines for US DOE funding and interfaces with state government and the legislature.
    The following consultants conducted analysis and research to support the deliberations of the Stakeholder Advisory Committee: Great Plains Institute (committee facilitation, stakeholder engagement); LHB, Inc. (metrics and indicators); and Rocky Mountain Institute (analysis and report development).
    Additional project guidance and contributions came from Energy Systems Consulting, the Minnesota Environmental Quality Board, the Minnesota Pollution Control Agency, and the U.S. Department of Energy.
    Additional stakeholder engagement and research methods

    The project team reached additional stakeholders through the Metro and Greater Minnesota Clean Energy Resource Teams (CERTs) meetings, a presentation to the Minnesota Solar Energy Industry Association (SEIA), a food processors’ workshop, and the Great Plains Institute’s Energy Innovation Celebration Collaboratory. In addition, the project team conducted over twenty interviews with stakeholder advisory committee members, observers, and other relevant stakeholders, and reviewed relevant literature and Minnesota-specific studies.

    Criteria for strategy selection

    The Stakeholder Advisory Committee and project team selected strategies for inclusion in the 2025 Energy Action Plan based on common criteria:

    • The strategy or technology’s potential impact to support Minnesota’s current goals 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;

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