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For decades, hydrogen has been touted as the fuel of tomorrow — a day yet to come.
But a $9.5 billion package wrapped into the enormous 2021 federal Infrastructure Investment and Jobs Act could assure the element’s speedier arrival in an eco-friendlier fashion.
A bulk of the funding, $8 billion, would go toward constructing regional clean hydrogen hubs to connect production facilities, terminals and pipelines with users in the transportation and manufacturing sectors. West Virginia is vying for one hub.
The goal is to replace “dirty” hydrogen sourced from natural gas with “green” hydrogen generated by splitting water — H2O — with electrolysis technology.
Ideally, that separation would be powered with renewable energy, a boost for the Biden administration’s targets of a 100% clean electrical grid by 2035 and net-zero carbon emissions by 2050.
Alleyn Harned was a proponent of hydrogen fuel long before he became the executive director of Virginia Clean Cities in 2011. He has been based in Harrisonburg since the organization formed a partnership with James Madison University in 2009.
In 2006, he coordinated a state working group that issued a public report about Virginia’s potential hydrogen economy. He also helped draft Virginia’s initial Energy Plan as the state assistant secretary of commerce and trade under Gov. Tim Kaine, now a U.S. senator.
“Green hydrogen is one of many options we have ahead of us to continue a path to better jobs and energy production in Virginia,” the 41-year-old said. Investing in it is more sensible “than blowing money on imported fuel that has energy security issues.”
Researchers see the promise of hydrogen in harder-to-electrify heavy industries such as steelmaking, and in the transport sector with maritime shipping, trucking and eventually aviation.
One urgent matter is dropping the price per kilogram of green hydrogen from the current $5-plus to $1 by 2031. Producing a kilogram of “dirty” hydrogen from methane is now a bargain at roughly $1.50.
Harned fully backs the quest for green hydrogen, but he isn’t such a purist that he wants to ban all methane as hydrogen feedstock. His instincts tell him that the perfect can’t be the enemy of the good when taming emissions of planet-warming gases.
“We are not going to eliminate every gram of carbon dioxide because that’s not the mission,” he noted. “The mission is to eliminate every net gram of carbon dioxide.
“Hydrogen is one scratch in the sand when we’re trying to move mountains.”
In this interview with the Energy News Network, Harned explains how green hydrogen can benefit Virginia’s economy and environment. His responses were lightly edited for clarity and length.
Q: What is the most significant accomplishment achieved by Virginia Clean Cities under your watch?
A: Our biggest accomplishment is raising awareness that transportation in Virginia is the economic sector with the largest greenhouse gas emissions. That information was withheld for years and it took time for people to understand what it meant.
Q: Green or clean hydrogen is having a moment in the headlines. Is it all hype or does the science back it up?
A: It’s understandable that people might think hydrogen is being overhyped. What’s positive is that we are seeing the federal government now investing in a massive research program with plans to build at least four hydrogen hubs nationwide and expand access to hydrogen fuel.
Keep in mind that hydrogen is emerging as part of a larger menu and would be part of a whole ecosystem of energy.
Energy is everything in our economy and hydrogen is an important upcoming component. But we don’t just snap our fingers and we’re done.
Q: U.S. Rep. Don Beyer, D-Virginia, is a co-sponsor of the Clean Hydrogen Production and Investment Tax Credit Act of 2021 (H.B. 5192). Why is Beyer supporting this and what is the measure’s intent?
A: Congressman Beyer represents an area in Northern Virginia that produces no oil. His family also has a long history operating auto dealerships, which perhaps explains his interest in transportation fuel.
His legislation offers what I would call a measured approach to support innovation in producing green hydrogen. That’s because it offers the highest tax incentives to production methods that reduce lifecycle greenhouse gas emissions most significantly. The top tier is a 95% reduction.
The legislation offers much lower incentives for other production methods that offer less of a lifecycle emissions reduction.
The type of tax credit laid out in H.B. 5192 showcases federal interest in reduced lifecycle greenhouse gases by putting a target on that figure.
Q: Let’s talk about green hydrogen in Virginia. First, are any universities or companies conducting research or using hydrogen of any type?
A: The U.S. Department of Energy spends millions every year on hydrogen research, so there could be projects going on in Virginia that I’m not aware of.
One piece of progress Virginia Clean Cities has made with James Madison University is to use federal funding to conduct the economic research behind what’s called the Hydrogen Fuel Cell Nexus.
Basically, the nexus is a U.S.-based business directory of hydrogen companies and products that buyers, partners, planners and other collaborators can use as a building blocks tool to put an actual project together, big or small.
Q: The Virginia General Assembly addressed passenger vehicles in 2021 by passing the Clean Cars law, which stimulates a transition to electric vehicles. But what about the separate carbon pollution from heavy-duty trucks and other segments of the transportation sector?
A: High-pressure hydrogen fueling infrastructure matters for these vehicles. That starts with fleet-fueling sites, shared fueling sites that can handle large vehicles, and a wide redundancy to the network.
It will take time but we see transit fleets installing their stations and succeeding with hydrogen today.
Consider that a tractor-trailer gets about 4 miles per gallon and emits 25 pounds of carbon dioxide per gallon of diesel. This is an opportunity for a higher density fuel like hydrogen, one that can produce zero tailpipe emissions.
Other mobile sources hydrogen can power are garbage trucks, transit vehicles, refrigerated trucks, as well as forklifts in all types of industries and marine ports with tractors and other vehicles.
Q: In-the-know observers predict that green hydrogen growth will take off in the 2030s. What kind of investments will that require?
A: Renewable hydrogen is produced at scale today and it’s a growing industry. There’s no need to wait until 2030. With energy hubs being built and with lessons learned from advances in California, those markets will only get bigger.
It’s what the whole country needs to thrive economically as we reach the end of our carbon budget. It’s a card that can be stored and played when needed.
Q: Relatedly, this country produces more than 10 million metric tons of non-green hydrogen, mostly from natural gas. That’s roughly 2% of U.S. total emissions. The U.S. Department of Energy estimates that producing an additional 10 million metric tons of green hydrogen would require doubling today’s wind and solar deployment. Is that buildout a pipe dream?
A: We will get this done, not because it’s easy but because we can and we have to so we can have a future. This transition is a critical component of maintaining our economy through the end of the century.
Everybody recognizes that our fossil fuel use will change dramatically in the decades ahead. It will be replaced with lower- and zero- and negative- carbon energies.
Q: On that last point you differ from strict adherents. They claim green hydrogen can only be created when renewable energy is used to generate the electricity that splits water into hydrogen and oxygen. Can you explain your reasoning on methane-sourced hydrogen?
A: I’m neutral on the pathway to decarbonization. It’s a game of inches, not a game of magic beans.
Capturing hydrogen via electrolysis (splitting water molecules) certainly works. But being able to eliminate releases of waste methane from landfills, wastewater treatment plants and agriculture using a process called steam reformation is crucial when you consider that we need to address this area of harmful waste and emissions.
Studies by the Virginia Department of Environmental Quality estimate that annually, our landfill methane is the equivalent of 2.4 million metric tons of carbon dioxide, manure management is half a million metric tons and wastewater is 0.7 million metric tons. It could be a win to grab it, reform it and reuse it.
Q: Environmental organizations such as the Natural Resources Defense Council have pointed out that “hydrogen leakage” has potentially negative climate consequences. Can that be mitigated?
A: Hydrogen safety and leakage is a top-level area of action for regulators and manufacturers. They’re not going out there building anything helter-skelter. Systems will be built with numerous layers of leak prevention.
Yes, it’s likely there will be minimal leaks so reducing that is important. But think about it this way: To get emissions equivalent to the carbon pollution from burning one gallon of gasoline, you would have to leak 2.5 kilograms of hydrogen into the air. It’s unlikely that a fraction of that hydrogen will be released, so it paints a rosy picture for the reduction of emissions.
Q: If green hydrogen isn’t generated directly on-site, how will it be shipped? Is talk about repurposing natural gas pipelines realistic?
A: It’s unlikely existing infrastructure such as large pipelines would be used. Hydrogen can be moved as a liquid or as a gas in a high-pressure cylinder. It’s possible it could be put into newly designed pipelines.
In Virginia, you already see heavy trucks and tanker trucks carrying large amounts on roadways. Also, Roberts Oxygen and other companies use smaller trucks to transport portable canisters for individual projects.
There is flexibility in all of this and distribution will be well-regulated.
As hydrogen is a bottle of energy, it seems like a good idea to distribute production all over Virginia to maximize local access and jobs.
Q: Anything else?
A: With transportation, it’s not easy to transition to hydrogen so it will take a little time. That’s why I’m excited that we’ve arranged a fleet demonstration for rural Virginia of a hydrogen vehicle from Toyota called the Mirai. We will make it available to government and rural fleet users periodically in 2022 and 2023. This totally hydrogen sedan is available in California and is used by federal fleet vehicles in Washington, D.C.
Illinois business leaders and researchers are hoping to leverage hundreds of millions of federal dollars to develop a thriving “hydrogen economy.”
The vision involves using the state’s plentiful nuclear power and renewable energy to separate hydrogen from water, and then using the resulting fuel to power industrial processes and heavy-duty vehicles.
The Midwest Alliance for Clean Hydrogen, or MachH2, is among more than 30 contenders seeking funding from a $7 billion U.S. Department of Energy program to jumpstart six to 10 regional hydrogen hubs across the country. Each will be aimed at producing and distributing pure hydrogen that is thus far in short supply.
The coalition behind the Illinois bid includes universities, utilities, economic development agencies, manufacturers, Argonne National Laboratory, and power producers like Constellation Energy and Invenergy, which has launched its own pilot program producing hydrogen in Illinois.
Jon Horek, director of hydrogen project development for Invenergy, said the federal funding can hopefully help solve the “chicken-and-egg problem” of developing hydrogen “demand and supply at the same time — production and consumption at the same time.”
Hydrogen is the most abundant element in the universe, and some see it as key to a clean energy transition, capable of replacing fossil fuels in vehicles and industry. But just getting pure hydrogen to users and fueling stations is a challenge; hydrogen occurs only in tiny quantities naturally in its purified form.
Currently, most hydrogen used industrially is purified or produced on-site, and hydrogen fueling stations for transportation are not common. But backers of the hub hope to change that, with hydrogen producers and hydrogen pipelines connecting entities stretching from northern Wisconsin south through Illinois, Missouri and Kentucky, and east to Ohio and Michigan.
MachH2 was one of 33 proposals to receive official encouragement to move forward from the Department of Energy, out of 79 applications submitted. A final proposal is due in April. The program was created by the Infrastructure Investment Act.
Jay Walsh, vice president for economic development and innovation for the University of Illinois system, said the Midwest and Illinois especially are ideal locations for a hydrogen hub, given the robust transportation and manufacturing infrastructure and academic resources.
“There’s distribution infrastructure — we’re located at the crossroads of the U.S.,” Walsh said. “Transportation is an important sector to decarbonize, and we’re good at transportation: water, rail, air, and of course trucking. We have all of those components, and add on top of that the talent and ability to create the talent — the workforce development.”
Currently most of the hydrogen used in fuel cells or industry is created by splitting hydrogen in methane (CH4) away from the carbon, usually using steam — which creates carbon dioxide as a byproduct — or energy-intensive pyrolysis, which creates pure carbon.
A cleaner way to produce hydrogen is from water, with a process known as electrolysis. But that also takes electricity, which often means greenhouse gas emissions. Though the gas is clear, hydrogen is described with a rainbow of colors depending on its source and sustainability. Hydrogen obtained from water with renewable energy is often referred to as “green hydrogen,” and hydrogen obtained thanks to nuclear energy is known as “pink hydrogen.”
“Illinois has a larger percentage of its electricity from nuclear than any other state,” Walsh said. “We also expect to be using solar and wind power” to produce pure hydrogen, with renewables increasingly being installed in Illinois, mandated by 2021 legislation to totally decarbonize the electricity sector.
“What distinguishes this hub is all the power producers in it are carbon-free power producers,” said Horek, noting that other hub proposals would produce hydrogen powered by fossil fuels. “For every sector that’s decarbonizing, there’s probably some technology folks may think about” that could utilize hydrogen. “The point of the hub is to continue those conversations and build that uptake.”
Bioenergy company Marquis sees hydrogen as essential to decarbonizing aviation and shipping. The element is crucial for creating sustainable aviation biofuel from corn, woody waste or other biomass, explained Jennifer Aurandt-Pilgrim, Marquis’ director of innovation and market development.
“We take the hydrogen and ethanol and run it over a catalyst, that connects the hydrogen with the ethanol to make a long-chain hydrocarbon,” said Aurandt-Pilgrim. “We’re turning biofuels into alkanes — jet fuel. That is really driven by using that hydrogen to make those long-chain hydrocarbons.”
The company also plans to create “renewable” biodiesel at a sprawling new industrial site from which the fuel can be shipped around the world via railroads or the Illinois River, which leads to the Mississippi River and the Gulf of Mexico. A Department of Energy-funded hydrogen hub could help production scale and lower costs.
Marquis’ corn ethanol plant produces about 400 million gallons of ethanol per year, 1 million tons of high-protein animal feed, and about 1.2 million tons of biogenic carbon dioxide emissions. But some of that carbon dioxide, along with other carbon oxides near the Marquis industrial site, could be turned into more ethanol in a “fermentation” process pioneered in part by Argonne. Marquis is planning to partner with LanzaTech, another member of the MachH2 coalition, to use this process at their site.
“You increase the same kernel of corn’s yield by 50% with no more land use, because we’re bringing hydrogen in,” said LanzaTech vice president of government programs John Holladay.
Aurandt-Pilgrim said it will take time to scale the carbon dioxide-to-ethanol process up. In the meantime, Marquis is planning to sequester carbon dioxide from its ethanol production under the site of the 3,500-acre Marquis Industrial Complex. It also plans to sequester carbon dioxide at its facility in Wisconsin.
The Mt. Simon sandstone formation in Illinois is considered ideal for carbon sequestration, but the concept has had a rocky history in the state. Ambitious carbon sequestration plans at the Prairie State and FutureGen coal plants never materialized, and an ongoing proposal by the company Navigator to build a carbon dioxide pipeline and sequestration site in Illinois faces massive community opposition.
Aurandt-Pilgrim said that Marquis is in the process of obtaining needed permits from the EPA for sequestration, and since it is not piping the carbon dioxide offsite, the company doesn’t expect local opposition. The ability to sequester carbon is not essential to the sustainable aviation fuels plant and other hydrogen hub-related projects moving forward, she said.
Meanwhile, Holladay sees another way hydrogen can cut carbon emissions in local and global industries. LanzaTech makes technology to capture industrial carbon emissions — carbon monoxide and carbon dioxide — which makes the carbon available for everyday manufacturing uses.
“In other words, carbon dioxide is being transformed into essential materials made today from petroleum and natural gas,” Holladay said. “Hydrogen allows us to capture even more industrial carbon emissions, which will help our local industries be better stewards and more competitive in global markets. For example, our partners are making dresses, running shoes, bottles, and cleaning products that started as carbon emissions from steel production.”
Hydrogen-powered vehicles are not the central purpose of the federally funded hubs, but the production and distribution of pure hydrogen would enable fueling stations for vehicles, backers said.
A hydrogen fuel cell can power cars, trucks or other vehicles by basically separating the negatively charged electrons and positively charged protons in hydrogen to create an electrical current, with the only emissions being water vapor. The fuel cell essentially powers an electric vehicle that never needs to be plugged in, as long as the hydrogen fuel tank can be replenished.
That can be a big “if” given that little hydrogen fueling infrastructure exists today, and it’s hard to grasp an advantage over electric cars or buses, with the recent proliferation of electric charging stations. Total sales of hydrogen fuel cell vehicles number in the low thousands, almost half worldwide being in California, as of a 2017 study.
In 2016, Michigan Public Radio explored then-Energy Secretary Steven Chu’s statement that “four miracles” would be needed to make hydrogen fuel cell cars viable: cheaper fuel cells, cleanly produced hydrogen, lighter hydrogen storage tanks on vehicles, and, crucially, a hydrogen distribution network. “If you need four miracles, that’s unlikely. Saints only need three miracles,” Chu told MIT Technology Review.
Jamie Fox, a Chile-based principal analyst at Interact Analysis which has focused on the sector, said he doubts hydrogen fuel cell cars will ever catch on. “It’s too expensive, and it’s too late to catch up with battery electric,” he said.
But heavy vehicles that have trouble holding enough electricity in a battery could be prime candidates. A major goal of the proposed hub is helping to power industries and transport modes that are “not easily electrified,” as Walsh said, including aviation and heavy manufacturing.
Fox noted that early-stage hydrogen-fueled trains already exist in Germany, Japan and the United Kingdom, and they “might make sense somewhere where you can’t have an overhead line [for electricity] due to the terrain.” He noted that battery performance suffers in cold temperatures, perhaps opening another opportunity for hydrogen fuel cells that fare better comparatively.
Meanwhile, hydrogen can also be burned in an internal combustion engine similar to a gasoline or diesel engine, and conventional internal combustion engines can be converted to burn hydrogen. This reaction produces no carbon dioxide or public health-harming particulate matter, though it can produce nitrogen oxide. Hydrogen internal combustion engines have not been deployed widely, though some sports cars have used the technology and engine manufacturers like Cummins are increasingly considering it as a way to cut carbon emissions.
Interact Analysis reported that its research “shows that mass production of hydrogen ICE [internal combustion engine] vehicles is set to take off within the next 5 years. Currently, the TCO [total cost of ownership] is unfavorable compared to traditional ICE vehicles, but shipments will reach 58,000 by 2030” internationally.
Jim Nebergall, general manager of hydrogen engine business at Cummins, wrote that hydrogen internal combustion engines could be ideal for long-haul trucking and “harsh conditions,” while hydrogen fuel cells make more sense for lighter vehicles. He acknowledged that it’s “a running joke in the industry that hydrogen cars are always 10 years away,” but he wrote that interest in hydrogen internal combustion engines could drive the availability of hydrogen, boosting fuel cells’ prospects:
“As these commercial applications become mainstream, hydrogen fueling networks will appear to serve them. Conceivably, these limited networks could then be used by personal hydrogen cars. Hydrogen engines are just around the corner, so hydrogen cars may have a shot at revival within less than ten years after all.”
Meanwhile hydrogen gas stored under high pressure is explosive, a liability that may make its use less popular, especially for vehicles. But proponents are unfazed.
“There are safety issues with every energy source,” Walsh said, citing lithium-ion batteries that can catch on fire. “These can be handled correctly.”
Scientists and engineers can likely find new ways to pursue Chu’s “four miracles” and make hydrogen production more sustainable and less costly, and more available for everyday people. For example, Chinese researchers in 2021 announced that nanoporous cubic silicon carbide could be used to harness sunlight directly to make hydrogen gas from water.
Researchers at Pacific Northwest National Laboratory with partners recently announced their process to make pure hydrogen from methane without carbon dioxide emissions, using a catalyst to produce solid pure carbon and “blue hydrogen,” or hydrogen from natural gas with zero carbon emissions. Marquis is also planning to explore blue hydrogen production in the future, Aurandt-Pilgrim said.
“A lot of energy sources have had to go through a phase where there was an initial investment before that energy source became reasonable to use,” Walsh said. “We’ve had many decades of effort on producing batteries — lithium-ion battery work has been going on for literally decades. There is an imperative here; the imperative is we really need to have cleaner sources of energy.”
Meanwhile, he said the technology already exists to create a hydrogen-based energy economy in the Midwest, and MachH2’s hub would focus on tapping such existing knowledge and scaling up for economic benefit in the nearer term.
“This hub is not for fundamental research — the university research is in moving the technologies forward and then evaluating the technologies as they get deployed, making sure we have what we need,” Walsh said. “There is a transformation that’s going to be happening here. It’s probably less impactful immediately to most people in society because of the sectors we’re working in at first. But this will be happening and there will be job opportunities.”
PORTSMOUTH — Siemens Gamesa announced Monday that it plans to build the United States’ first offshore wind turbine blade facility at the Portsmouth Marine Terminal, notching a major win for Virginia as it strives to become a hub for the nation’s fledgling offshore wind energy industry.
The announcement was made Monday at the terminal by U.S. Energy Secretary Jennifer Granholm and Virginia Gov. Ralph Northam.
The Spanish-German wind engineering company said it plans to invest more than $200 million in the Portsmouth Marine Terminal facility, which will produce blades for offshore wind projects throughout North America, per Northam’s office.
The facility is expected to create over 300 jobs.
Virginia’s largest electric utility, Dominion Energy, previously selected Siemens Gamesa as the turbine supplier for its 2.6 gigawatt Virginia Coastal Offshore Wind project being developed 27 miles off the coast of Virginia Beach. A 12 megawatt pilot constructed by Dominion became the nation’s first offshore wind installation in federal waters and began delivering energy to customers in January 2021.
Offshore wind is increasingly becoming a critical component of both electric power producers’ plans to transition away from fossil fuels and state and federal aspirations to develop renewable energy that can replace coal and natural gas while driving economic growth.
Earlier this month, President Joseph Biden’s administration laid out an ambitious plan to develop offshore wind along much of the East Coast, West Coast and Gulf of Mexico. In March, the administration set a target of deploying 30 gigawatts of offshore wind by 2030.
Virginia has also set an aggressive goal under the 2020 Virginia Clean Economy Act of developing 5.2 gigawatts of offshore wind by 2034. Dominion’s CVOW project, which would produce half of that power, is currently being reviewed by the U.S. Bureau of Ocean and Energy Management.
But even as states race to develop wind projects, turbine components continue to be produced overseas, with major manufacturers including Siemens Gamesa telling Reuters earlier this year that they need to see a reliable pipeline of projects moving forward in the U.S. before putting down roots stateside.
Shipping turbine components across the Atlantic for U.S. projects, however, comes with special challenges.
Under the federal Jones Act, any vessel carrying goods between two points in the U.S. must be built and registered in the United States. Despite that restriction, no such vessels with the capacity to transport turbine components currently exist in the U.S. Dominion is building the first Jones Act-compliant offshore wind installation ship in Texas, which has been christened Charybdis after a sea monster in “The Odyssey” and is expected to be completed by late 2023.
Virginia Mercury is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Virginia Mercury maintains editorial independence. Contact Editor Robert Zullo for questions: info@virginiamercury.com. Follow Virginia Mercury on Facebook and Twitter.
New Hampshire’s electric utilities have come out in favor of continuing the state’s current system for compensating customers who share surplus solar power on the grid.
Eversource, Unitil, and Liberty Utilities surprised clean energy advocates by submitting joint testimony to state regulators last month endorsing the state’s current net metering structure. The program credits customers roughly 75% of the standard electricity rate for any unused solar generation that flows back onto the grid and is used by other customers.
“I am delighted that our utility friends have come over to our way of seeing things,” said Sam Evans-Brown, executive director of Clean Energy New Hampshire.
The utilities’ testimony is part of New Hampshire’s current deliberations over whether the state’s net metering rules should be adjusted. The process in New Hampshire is playing out as many other states are also debating what role net metering should play in the transition to clean energy.
Net metering provides an important source of revenue for solar customers when their generation doesn’t perfectly match their electricity use, but critics contend that it unfairly shifts costs to consumers who don’t generate their own renewable energy.
“I think renewable energy is great,” said Rep. Michael Vose, chair of the state House’s Science, Technology and Energy Committee, who has supported bills that would have cut net metering rates. “If people can afford to buy it and want to buy it, they should go ahead, but I am not in favor of subsidizing renewable energy and shifting costs to people who don’t directly benefit from that renewable energy.”
New Hampshire’s current rules, put in place in response to 2016 legislation, replaced a previous system that gave participants credits equal to the price utilities charge customers for electricity. This same law also required the state to conduct studies on the impact and effectiveness of net metering and make changes to the regulations if the findings warranted.
Previously, the utilities had advocated for much lower rates for net metering customers. Nationally, utilities have often taken the same position as well, arguing that higher net metering rates push costs onto customers who can’t afford to buy solar panels.
At a glance, it’s easy to dismiss: if a homeowner sends 1 kilowatt-hour of power to the grid and receives a credit worth the price of 1 kilowatt-hour, it would seem everything should come out even. But the retail price of electricity includes more than just the cost of the power itself — everything from the salaries for lineworkers who do maintenance to the cost of debt on construction projects to keep the wires and poles safe and reliable.
“The whole system is packaged up and rolled into the price,” Evans-Brown said.
So when a homeowner receives a full retail credit for their power, they are getting paid for more than just the energy they are providing, increasing the cost to run the utility. These costs are then passed on to the utility’s entire consumer base. A lower net metering credit means less of this sort of cost shifting and, some argue, a fairer deal for customers without solar.
The gap between net metering rates and utility costs can be even more pronounced at certain times of day. In the early afternoon on a sunny summer day, demand on the grid is low, meaning the price for power from the grid drops as well. At the same time, solar panels are producing plenty of excess energy. Utilities can end up paying higher rates for this electricity than they would have had they been buying from a power plant, at a time when excess residential solar energy wasn’t even needed to help meet high demand.
“Solar does not make the grid more reliable or resilient, nor does it improve power quality in any way,” Thomas Meissner, chief operating officer of Unitil, testified in 2016.
Supporters of a strong net metering rate, however, argue that net metering creates an array of benefits for utilities that solar generators should be compensated for. The report produced in accordance with the 2016 law notes that solar can reduce capacity payments the utilities must make, reduce the cost of complying with renewable energy standards, and lower the amount of power lost traveling through transmission lines, among other benefits.
Utilities, however, have generally downplayed these benefits. However, in their joint testimony, the utilities go so far as to praise the economics of the system.
“New Hampshire’s net metering policy — which is among the most balanced in New England — has been effective in encouraging the growth of [solar] resources in our state, and there is no evidence that the current compensation level is creating unjust cost shifts,” said Eversource spokesperson William Hinkle, after the testimony was filed.
The state report presents similar findings. It concludes that distributed solar generation should provide increasing value to the grid over the next 12 years. It also found evidence that limited cost shifting would occur, increasing the average residential bill in the range of 1% to 1.5%.
Supporters of net metering say this number is so small that it is an acceptable price to pay for the benefits of increased renewable energy. Vose, however, is concerned about any increased costs for consumers who have not chosen to install solar panels.
“That is one of the problems we’ve tried to ameliorate, to minimize such cost shifting whenever possible,” he said.
Nationally, net metering remains contentious in many states. For example, North Carolina’s public utility authorities have angered environmental groups and many in the solar industry by approving a utility plan to reduce payments to net metering customers. And earlier this year, California cut rates by about 75% for new net metering customers, with utilities pushing for even more cost-cutting concessions.
“They’re hugely disincentivizing rooftop and community solar,” said Patrick Murphy, senior scientist at PSE Healthy Energy, who researches clean energy transitions and energy equity.
Overall, the more a state lowers its net metering credits below the retail price, the more likely utilities are to embrace — or at least accept — the program, Murphy said. In New Hampshire, the reduction from full retail price to 75% has been enough to satisfy utilities.
The New Hampshire net metering docket remains open and the matter is under consideration by the Public Utilities Commission. Vose thinks it very possible that net metering rates will be further lowered. Evans-Brown, however, thinks the utilities’ recent testimony could have a significant influence toward keeping the current system in place.
“This makes it more likely that we will get a favorable outcome,” he said.
👋 Hello and welcome to Energy News Weekly!
The Biden administration is about to get more young Americans working for the planet.
Last week, the White House announced it’s launching an American Climate Corps. The workforce training and service program aims to get young people ready for climate and clean energy fields. It will put an initial cohort of 20,000 to work installing clean energy technologies, restoring coastal wetlands to prevent flooding, and taking on other jobs in climate-vulnerable communities.
It’s all reminiscent of the New Deal-era Civilian Conservation Corps, which hired young people to fight forest fires, build wildlife refuges, and take on other environmental jobs during the Great Depression.
Flash forward to the 21st century, and a Climate Corps has been a priority for Democratic lawmakers. The Biden administration initially proposed the work program as part of its Build Back Better infrastructure plan, but it was left out of the Inflation Reduction Act. But by combining programs and funding authorized in the climate law and other legislation, the White House has created something pretty close to the program it’s been working toward for years, Inside Climate News reports.
There are a lot of details we don’t yet know about the American Climate Corps, including how interested workers can apply and how much they’d be paid. But for now, there’s a White House website where you can share if you’re interested in joining or otherwise helping the burgeoning corps out.
New Hampshire — long an outlier among New England states on climate action — is on its way to creating a new climate plan for the first time in 14 years.
The state budget adopted last week includes a $3 million federal grant from a program intended to support the development of climate action plans across the country.
“We’re definitely very excited about this — we think it’s a great opportunity for the state,” said Chris Skoglund, director of energy transition at the nonprofit Clean Energy New Hampshire.
Among residents there is a widespread sense of pride in New Hampshire’s tendency to follow its own path and buck conventional wisdom, an attitude that extends firmly into energy and climate policies, advocates have said. The state is not necessarily against climate action, but is determined to make its own policies, its own way, rather than just repeating the choices of other states, said Meredith Hatfield, associate director for policy and government relations for the Nature Conservancy in New Hampshire.
Today, while the other New England states all have, to various degrees, ambitious state-mandated climate goals and updated climate plans, New Hampshire has no binding targets for lowering emissions or reducing fossil fuel use.
“There’s a sentiment among some people in New Hampshire that we aren’t going to follow the traditional recipe — we like to figure things out on our own,” Hatfield said. “We are making progress, but it’s just not fast enough.”
In 2009, the state developed a broad-based climate action plan that incorporated the work of dozens of stakeholders across diverse fields. Though that document had some influence on legislation in subsequent years, it was never codified into law or updated after its initial release.
The federal Inflation Reduction Act, which became law in August 2022, created an opportunity for New Hampshire to dive back into climate planning.
The law includes $5 billion for the Climate Pollution Reduction Grant program. Of this total, $250 million has been designated to help states, local governments, tribes, and territories develop or update plans to reduce greenhouse gas emissions. Another $4.6 billion will then be available to help implement these plans.
When applications for the first phase of the program opened in late February, the state’s Department of Environmental Services jumped at the chance and applied. At the end of June, the state adopted a two-year, $15.2 billion budget that included this grant money in the department funding, an essential step in pushing the climate plan project forward.
The state is now in final discussions with the U.S. Environmental Protection Agency about minor revisions to how much of the grant money will be spent on what elements of the planning process, said Michael Fitzgerald, assistant director of the state environmental services department. Though early plans are still tentative, the money will likely pay for new positions to manage the process, as well as a broad outreach strategy intended to gather feedback from a range of stakeholders, Fitzgerald said.
“We’re planning on doing focused work in disadvantaged areas,” he said. “There are requirements that there be consideration of ensuring benefits go to environmental justice areas.”
Grants are likely to be awarded in July and August, according to information from the EPA. States and territories that receive the grants will have until March 1, 2024, to deliver their completed plans. The EPA anticipates announcing the final details for the implementation grants in September 2023, with applications likely being due the following April.
Four states — Florida, Iowa, Kentucky, and South Dakota — declined to apply for the planning grant money. The remaining 46, as well as Puerto Rico and the District of Columbia, all submitted applications.
Advocates are optimistic that the new plan, when completed, could gain more traction than its predecessor.
There was a lot to like about the 2009 plan, Skoglund said. By convening so many people with such a wide range of expertise, he said, the plan was able to build widespread knowledge of, and support for, climate action.
And advocates said it did have some impact on state climate and energy policy. New Hampshire’s energy efficiency goals and energy performance targets for new buildings were influenced by the plan, Skoglund said. The plan also bolstered the state’s continued participation in the Regional Greenhouse Gas Initiative and helped spark an investigation into grid modernization in the state.
Implementation, however, never gained momentum and there were no efforts made to keep the plan up-to-date.
“There was no follow-up to keep that conversation going at high levels,” Skoglund said. “But we didn’t continue that, so we are now a decade behind.”
This time around, advocates would like to see the state replicate the strengths of the 2009 process, particularly the inclusion of a wide range of voices, while making more impact on policy changes. They expect — and hope for — the ultimate plan to have a strong focus on the economic development, cost savings, and job creation that a shift to clean energy can offer, backed up by rigorous analysis.
“People are aware of what is happening and they are concerned about it,” Hatfield said. “We need to do a better job of connecting the solutions with what people are worried about.”
Though the national conversation about climate action has become more polarized in recent years, New Hampshire’s unique character might make the state a place where a broad consensus can be reached, advocates said. The deep national divide between the parties isn’t as evident in pragmatic New Hampshire, where opportunities to save money could carry more weight than the chance to score partisan points, said Sam Evans-Brown, executive director of Clean Energy New Hampshire.
“There still is a surprising amount of bipartisanship,” he said. “I think money-saving clean energy technologies can be popular here on a bipartisan basis.”
A two-year-old economic development partnership is helping to draw attention — and investment dollars — to sustainability projects in the Great Lakes region.
The Great Lakes Impact Investment Platform was launched by the Conference of Great Lakes and St. Lawrence Governors and Premiers. The alliance of U.S. and Canadian officials from Québec to Minnesota is focused on growing the region’s economy and protecting its fresh water.
The investment platform is helping to do both, promoting investment opportunities that benefit the environment, including renewable energy, clean water, and ecological restoration. The platform features 40 projects representing nearly $4.5 billion in investments, including household energy efficiency retrofits, coal mine reclamation, and utility-scale solar development.
“Global capital markets are hungry” for chances to invest in green projects, said Dave Naftzger, the conference’s executive director. But financial institutions, philanthropic entities and others have long looked to the coasts for such opportunities.
Great Lakes states offer untapped potential that can pay off for investors as well as regular citizens and the environment, Naftzger said. And even with increasing federal action, including incentives and programs under the new U.S. infrastructure law, a swift and equitable clean energy transition will still depend on private investment and public-private collaborations.
“Especially for investors who care about water, they should look to the Great Lakes as a matter of course,” Naftzger said. Meanwhile, clean energy-related investments are also a robust and growing sector, including projects tapping green bonds, property assessed clean energy programs, and other financial tools to leverage public and private funds.
The platform is something of a matchmaking service, publicizing green investment opportunities and projects and helping to connect funders and lenders with these initiatives, while also allowing projects to learn from each other.
Among the energy-related projects showcased by the platform:
Such green investing helps developers, governments and even individual households access capital that they might not have been able to otherwise. And it allows financial institutions and other funders to meet environmental and sustainability goals and serve clients who want their money to go into green efforts.
“There’s a lot of place-based investors — people who are specifically looking for opportunities here” in the Great Lakes, Naftzger said. “That could include pension funds, high-net-worth individuals, family offices, community foundations, philanthropic organizations. And these deals can provide market returns or better. … We’re helping people understand the opportunity — it’s a relatively new one, but people are becoming aware of it.”
Michigan Saves is essentially an independent, nonprofit green bank that lends to individuals, businesses, and municipalities for solar, energy efficiency and geothermal projects, with loans ranging from $1,000 up to $100,000 and into the millions for commercial projects. It was started to help Michigan meet ambitious energy efficiency targets in 2008 legislation, and has done $325 million worth of financing since the first loan in 2010, President and CEO Mary Templeton said.
The state government offers public funds to secure loans made by private lenders, including small credit unions, so that they can lend with little risk — and if someone defaults, the government pays. This was especially important since the program launched in the wake of the 2008 economic crisis, when lenders were skittish. So far the default rate on loans is only 2%, Templeton said.
The lending process is meant to be streamlined and fast so that, for example, if someone’s furnace breaks, they can buy a more energy-efficient furnace quickly enough to stay warm.
Templeton said such convenient and accessible loan offerings can actually convince people to invest in energy-efficient products when they hadn’t otherwise planned to.
“An electric heat pump, solar panels — those cost money — nothing is forcing you to do that,” she said. “But when we can make it more attractive, we’ve seen a large demand.”
Michigan Saves helped a Kalamazoo art gallery and jewelry store owner install efficient LED lighting that also makes her products look nicer, helped a young couple insulate their drafty first home, and helped a family save $600 a year and live more comfortably with a new furnace and retrofits, among many stories featured on their website. Energy consumption was lowered in every case.
Michigan Saves also works with lenders to establish third-party-owned solar projects, wherein the lender sets up an LLC that owns a solar installation to tap tax credits that aren’t available to nonprofits, and to relieve the customer of up-front costs. The program also partners with utilities to offer zero-interest loans to businesses for energy efficiency improvements. Those improvements help utilities meet their own energy conservation mandates.
“For small businesses in particular, like restaurants, they can implement basic [efficient] lighting in parking lots, they can get efficient HVAC,” she said.
Michigan Saves is part of the American Green Bank Consortium, which includes publicly and privately run green banks in states including New York, Delaware, Connecticut, Nevada, California, Hawaii and Louisiana, though few in the Midwest.
“We learn and share best practices — I get calls all the time from people thinking about setting up green banks,” Templeton said. Among other things, callers ask about “the way we structured loan loss reserve, and credit enhancement that leverages $30 of private investment for every $1 of public investment. That’s a pretty amazing ratio.”
Michigan Saves works with a network of providers for insulation, air sealing, solar and energy storage, electric heat pumps, lighting, and other sectors. The website allows customers to read reviews and connect with contractors.
“It really helps to support local jobs,” Templeton said. “These are jobs that can’t be anywhere but in our backyard.”
Like many utilities, DTE is quickly expanding its renewable holdings with utility-scale solar and wind farms. In 2021 alone, it added 535 megawatts of renewables, enough to power nearly 700,000 homes.
And DTE is helping to lower the costs and raise awareness of those investments through green bonds, wherein financial institutions buy bonds that pay for the renewables and earn a set rate of return as the utility pays off the bonds.
The bonds can be issued for projects that have already been constructed, noted DTE corporate financial specialist Kathleen Hier, eliminating the uncertainty that might exist for a planned project.
DTE manager of corporate finance Scott Bennett explained that the bonds are typically purchased by insurance companies that specialize in green debt and likely hold green bonds from other utilities as well. Those companies may also sell the bonds on secondary markets.
While DTE could and would have built renewables even without green bonds, they can tap more favorable rates since offering a green bond attracts investors who are seeking green financial products for their portfolio or secondary markets.
“When we issue the green bond, these [green-oriented] funds are creating more demand for that issuance because we have normal bidders, and also green funds, so hopefully we see better pricing,” he said. “There’s just more demand out there — when we do a green bond versus a regular bond, we may have six more funds bidding in.”
Swaths of once fertile or forested land across Great Lakes states and Appalachia have been turned into barren wastelands by coal mining. But efforts are underway to meaningfully reclaim and replant some of this land. The green investment-focused firm Quantified Ventures is looking to transform formerly mined land by leveraging carbon markets.
Quantified Ventures received a grant from a U.S. Department of Agriculture program to nurture the soil and then plant trees on previously mined land in Pennsylvania and possibly also Ohio, West Virginia or Kentucky.
The company used the Great Lakes Impact Investment Platform to help spread the word to investors about a pilot project they had originally planned, which will now be greatly expanded thanks to the federal funding. The company will use its own financing to augment the federal funds, and recoup costs through selling carbon credits from planting trees, including through a mechanism that allows up-front payment.
Quantified Ventures managing director Todd Appel said they hope the effort can be a model for other investors, organizations and companies to use carbon credits and voluntary carbon markets to finance mine reclamation and reforestation — a linchpin to “just transition” movements across coal country including in Illinois and Indiana.
“The mining has scarred the landscape. There are limited plants and trees — it’s not a healthy habitat for birds,” Appel said. “So we’re going to rip up [and replace] the soil to enable planting of new trees and identify landowners to participate.”
The previously mined land might be owned by governments, companies or individuals who have acquired it. In such an arrangement, an entity like Quantified Ventures would likely provide financial incentives to the landowner to get an easement, and the entity paying for the reforestation would recoup their costs and earn a return through the carbon credit sales.
“We’ll seek to scale this up. There are millions of acres this could be applied to,” Appel said. “The other goal is to prove carbon markets can enable this work.”
Correction: Mary Templeton is president and CEO of Michigan Saves. An earlier version of this story misstated her title.
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The following commentary was written by Laura Sherman. Sherman is president of the Michigan Energy Innovation Business Council, a trade organization of more than 140 advanced energy companies focused on improving the policy landscape for the advanced energy industry in Michigan. See our commentary guidelines for more information.
Michigan’s recently finalized plan to reach carbon neutrality by 2050 is an ambitious strategy that would remake the state’s economy. Under the plan, transportation would become electrified, and our energy would increasingly come from renewable sources backed by storage, among other bold policies.
While it can be daunting, big change is often good. The shift envisioned by the plan will pay dividends to Michiganders from all walks of life by increasing job growth, boosting income and raising the state’s overall economic output.
The advanced energy sector is one of the fastest-growing parts of Michigan’s economy, as the members of the Michigan Energy Innovation Business Council (Michigan EIBC) have seen firsthand. Michigan EIBC represents approximately 140 companies that work in Michigan in renewable energy project development, advanced mobility, energy storage, energy efficiency, manufacturing of batteries and other components used in clean energy, and more.
The MI Healthy Climate Plan, as unveiled by Governor Whitmer, will build upon this progress. Not only will prioritizing clean energy and transportation lead to savings for consumers, but also, the state’s economy can leverage several elements of the plan to attract businesses and private investment.
Clean energy and transportation are a foundational part of the state’s economy. According to E2’s 2021 Clean Jobs America Report, Michigan’s clean energy employment share of the statewide workforce is higher than the national average and the state ranks 6th in the nation in total clean energy jobs. Michigan also has the second highest number of clean energy jobs when compared to other states in the Midwest. Michigan ranks second in the nation, behind only California, for the number of jobs in the “clean vehicle” sector, including electric, hybrid, and hydrogen fuel cell vehicles. Furthermore, despite an unstable economy for much of the pandemic, the clean energy sector grew at a higher rate than the state’s overall economy.
State and local governments have helped make these jobs possible through policy. One of these policies is the renewable portfolio standard (RPS), passed in 2008, that required that 10% of the state’s energy come from renewable sources by 2015. As of early 2022, the Michigan Public Service Commission’s study on the effects of the RPS found that it had led to a total of 2,828 megawatts of renewable energy deployment in Michigan and over $5.1 billion worth of investment.
The MI Healthy Climate Plan recommends taking the RPS to the next level, increasing it to 50% by 2030.
Another important existing policy is the economic development package (Public Acts 134, 136, and 137 of 2021) and funding for the Michigan Strategic Fund that have invigorated the electric vehicle market in Michigan. The bipartisan deal secured transformational investments from multiple global companies, including Michigan EIBC member company General Motors and LG Energy Solutions, who chose Michigan over other competing locations.
To support additional electric vehicle deployment in Michigan, the MI Healthy Climate Plan recommends deploying infrastructure to support 2 million electric vehicles on Michigan roads by 2030.
We need to implement the policies proposed by the plan so Michigan can fully realize the potential benefits of advanced energy. An October 2021 report published by Greenlinks Analytics analyzed the shifts in employment, income, and Michigan’s economic output related to investments in energy efficiency, solar, demand response, and other renewable energy technologies associated with state climate goals. Using an integrated modeling platform, the report found that investment in clean and renewable energy over the next several decades would lead to the creation of 96,000 jobs, a $2 billion increase in residential household income and an additional $3.9 billion to the state’s GDP.
The recommendations in the MI Healthy Climate Plan can help Michigan capture these economic benefits, but we should not forget that it is just a plan. Michigan lawmakers and officials will need to do the hard work of enacting the planks of the plan. Decarbonizing Michigan’s economy over the next 30 years will be a challenge, but the state’s history of growth and strength in the advanced energy industry shows it is a challenge worth undertaking.
The following commentary was written by Deana Dennis, senior manager for Midwest state policy at Ceres. See our commentary guidelines for more information.
Michigan has been a manufacturing powerhouse for the Midwest and the U.S. for generations, so it’s no surprise to see it riding the massive wave of investment into clean energy manufacturing that is sweeping the nation. Since last fall, the state has seen major corporations announce more than $8 billion worth of projects and thousands of jobs to build batteries, electric vehicles, and other clean transportation solutions that honor Michigan’s history as an industrial base while seizing this opportunity to super-charge the state’s economic future.
Similar projects are popping up across the country, thanks in large part to the federal incentives in the Inflation Reduction Act. Passed last year, the nation’s largest-ever climate law is designed to cut carbon pollution while establishing the U.S. as the global leader in clean energy manufacturing, supply chains, and deployment. Already, states from all regions and governed by both parties are welcoming the huge influx of clean energy and advanced manufacturing projects.
But the activity is especially resonant in Michigan — and not only because the scale of investment is so enormous. It also represents a quick return on the state’s efforts to establish itself as a clean energy leader. It was just last year that Gov. Gretchen Whitmer unveiled the MI Healthy Climate Plan, the state’s first-ever roadmap toward tackling the climate crisis by achieving a net zero economy by 2050.
While the Healthy Climate Plan is already sending a strong signal to industry, it has not yet been implemented. The plan features many important goals, such as preventing the worst impacts of climate change and addressing environmental injustices, such as air and water pollution, that unfairly harm marginalized communities. But at its unveiling, officials also emphasized that it was an economic plan. By positioning Michigan as a climate leader, they argued, the state stood to capture economic development and create legions of good jobs as companies seek out forward-looking business environments forged by strong clean energy policies.
That proved prescient: today, Michigan is a clear beneficiary of the clean energy boom in the U.S., and the state has both the federal Inflation Reduction Act and the promise of the MI Healthy Climate Plan to thank for it.
The powerful mix of public policy and private investment shows why leading companies and investors have been strong champions for ambitious federal and state climate policy. Thousands of companies across the U.S. — including more than two dozen S&P 100 companies — supported the climate measures in the Inflation Reduction Act. And the MI Healthy Climate Plan was celebrated by 15 major companies operating in Michigan, including General Motors, Ford, and Siemens. Business leaders recognize that clean energy investment comes with the promise of jobs, lower utility costs, energy security, and a more sustainable and less risky economic future.
It’s exciting to think we’re only beginning to see these many economic benefits surface in Michigan. But as other states move to pass climate and clean energy policies to prove they are open for business, Michigan policymakers can and should bolster this momentum by taking action to implement the Healthy Climate Plan.
Michigan lawmakers seem to recognize the unprecedented opportunity before them. They recently introduced the MI Clean Energy Future Plan, an ambitious suite of clean energy legislation that supports the Healthy Climate Plan. It’s highlighted by a new target of 100% clean electricity by 2035 — a policy that is both bold and feasible, and essential to meeting the state’s climate goals and fully capitalizing on this moment.
With the right policies in place, analysts believe Michigan can attract $26 billion in clean energy investment while dramatically improving public health in the coming years. It’s no wonder why. History has shown that this is a state with the industrial workforce and know-how to be a key engine of innovation not just for the U.S., but across the world. Let’s pass a 100% clean electricity standard this session to take full advantage of the opportunities of the clean energy economy and make Michigan the place where companies choose to build it.
Minnesota utilities will soon use existing fossil fuel plant infrastructure to transport clean energy to Midwest’s regional electricity grid.
The workaround avoids the Midwest’s bottlenecked transmission grid managed by the Midwest Independent System Operator, Inc. (MISO), the regional transmission organization currently hamstrung by a lengthy project queue and a capacity shortage.
The process of connecting new generation to the grid in MISO’s 15-state territory takes an average of three years, according to an Americans for a Clean Energy Grid study. Meanwhile, interconnection costs have more than quadrupled in the last few years and now represent almost a quarter of a typical wind farm’s budget.
As a result, projects have been canceled or trimmed back, with 5 gigawatts of clean projects pulled in the last two years despite having signed power purchase agreements, the study reported.
The situation has sent Minnesota utilities on a search for existing, underutilized transmission capacity, often connected to aging or retired fossil fuel power plants, or “peaker” plants that only run sporadically during high-demand times for electricity.
“I think it’s a great idea because we’re in a situation where we don’t have enough transmission capacity for our evolving system to add wind and solar quickly,” said Allen Gleckner, lead director of clean electricity at Fresh Energy, which also publishes the Energy News Network. “It’s good to see utilities leveraging all the ways they can to add renewables without having to deal with difficulty through the regular interconnection process right now.”
Though transmission is critical to a clean energy transition, the sector remains mired in challenges ranging from underinvestment to siting and permitting barriers. Recent projects in the region, such as the $2 billion CapX2020, added 800 miles of transmission lines that quickly filled with new wind and solar developments. President Joe Biden’s administration plans to ramp up spending on transmission to relieve the backlog, but it will likely take years to see the impact.
“The grid is going to be the vehicle that allows Minnesota to reach its clean energy goals,” said Beth Soholt, executive director of the Clean Grid Alliance. “An enhanced grid is going to be required for getting to a higher level of electric vehicles, for electrifying buildings and for continuing to reduce carbon from the electricity sector. It’s all going to be built with the grid as the backbone.”
NextEra Energy is building two wind farms that will use Great River Energy’s peaker plants to transmit electricity. The first project is a new 259 megawatt wind farm that will be linked to the grid at Great River Energy’s Pleasant Valley Station peaker plant southwest of Rochester, Minnesota. A 300 MW wind project will interconnect at Great River Energy’s Lakefield Junction Station in south-central Minnesota. The roughly two-decade-old plants are around 30 to 40 miles from the wind farms.
Otter Tail Power plans to build a 49.9 MW solar facility at Hoot Lake, a 100-year-old western Minnesota coal plant that closed in May. The utility will use about one-third of the existing transmission capacity at the site to connect the solar to the MISO grid in 2023. Minnesota Power is also preparing three new solar installations next year, two of which will be built near existing power facilities.
On a much larger scale, Xcel Energy’s integrated resource plan calls for using interconnection rights at its Sherburne County Generating Plant (Sherco) and Allen S. King Generating Plant, both just outside the Twin Cities. The utility has rights for 2,600 megawatts and is considering ways to tap wind resources from southwest Minnesota using a new transmission line that would connect to the Sherco plant.
Last week, clean energy advocates raised concerns about two additional natural gas peaking plants in Xcel’s resource plan, Soholt said, but they applauded the approach of using Sherco and King to transport clean energy.
Zac Ruzycki, resource planning director for Great River Energy, said the utility plans to match all of its remaining peaker plants with wind farms, allowing as much as 1,400 MW of clean energy to enter the grid. The advantage of using peaker plant interconnection rights goes beyond just avoiding the MISO queue, he said.
Typically, new wind projects are studied together and assessed the cost of any required grid upgrades. By using existing interconnection rights, the wind farms avoid grid improvement costs, delays, and unexpected changes that might be required for a new grid interconnection through MISO.
Peaking plants generate power less than 5% of the year, he said, with utilities mainly initiating their use when weather or other issues threaten reliability, or when market prices surge. Great River Energy also sees peakers as a backstop to help balance variable power sources such as wind and solar.
“We think it’s a great complement because we’re utilizing the interconnection to create a more efficient and more effective solution for our members,” Ruzycki said.
Mark Lennox, project director for NextEra Energy’s Dodge County Wind, said the company will use what MISO calls a “surplus interconnection” to connect to the Pleasant Valley Station peaker plant. It allows new energy sources to join the grid at existing plants not using their full transmission capacity. NextEra pulled the project from the traditional MISO process in 2020 “because of exceedingly uneconomic costs.”
Otter Tail’s manager of renewable development, Randy Synstelien, said solar made the most sense at the utility’s Hoot Lake site, because the site had plenty of space available on site.
“We’re reusing the interconnection and reusing the land on that site,” he said.
Otter Tail sees the possibility of using other sites, potentially peaker plants, to incorporate clean energy transmission into other existing interconnections. The advantages of the Hoot Lake include an “expedited process” and lower interconnection costs, especially since in rural areas, even shared system upgrade costs for a clean energy project “can be very substantial and impact project viability,” Synstelien said.
Great River Energy’s initial attempt to build wind farms and connect them to a power plant failed. After finding no buyers, Great River Energy announced the closure of the 1,100 MW Coal Creek Station in McLean County, North Dakota, in 2020. McLean County officials passed a moratorium on wind farms after learning Great River Energy had plans to develop wind and use the plant’s grid connection to transport clean energy.
Having been rebuffed by the county, Great River Energy switched the investment it planned to make in North Dakota to Minnesota. Four Next Era Energy wind farms in Minnesota will now sell power to Great River Energy.
“The original plan was to site wind in North Dakota, and when that didn’t work out, we pivoted to alternative plans that we had in Minnesota,” Ruzycki said. “Once the Coal Creek Station interconnection was no longer in our power supply plan, we were able to leverage the interconnection of our other generators to our advantage.”
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