States across the country have either already enacted policies to decarbonize their economies or are currently working toward implementing them. But different policies, even with the same goals, can have different impacts on each state’s energy system.
Over the years, there have been several proposals in Minnesota, including some that would increase the state’s renewable energy standard that requires utilities receive 25% of their end-use electricity from solar, wind and other qualified renewable energy sources by 2025.
“When you are cooperative that is owned by people you serve, the first objective is to understand the effects a new policy may have on our membership,” said Zac Ruzycki, director of resource planning at Great River Energy. “We want to know how we can achieve environmental goals with minimal effects on cost and reliability.”
To gain a better understanding of how various decarbonization policies might change Minnesota’s energy system, Great River Energy worked with the Electric Power Research Institute (EPRI).
“The research we’ve conducted has helped us better realize what types of financial trade-offs would present themselves under multiple different potential policies aimed at reducing carbon emissions,” Ruzycki said.
EPRI used one of its models to compare the economic outcomes and costs of two policies intended to achieve the same decarbonization targets but in different ways: one that required wind, solar, hydropower and other renewable energy resources; and another that met the same level of carbon dioxide reductions, but was technology-neutral and allowed all types of energy sources, including nuclear power and fossil fuel generation with carbon capture and storage.
The modeling analysis showed the technology-neutral policy could save Minnesota nearly $3 billion in costs related to the electric sector between 2015 and 2050 and would support about the same amount of new in-state wind generation as the other policy.
The results had an impact on the creation of future policy proposals. In fact, Minnesota policy discussions shifted in 2020 toward technology-neutral clean energy standards. This led Great River Energy to work with EPRI on follow-up analysis on the initial research project that would delve deeper into the implications of a less prescriptive technology-neutral policy.
The team evaluated pathways to decarbonization, opportunities for electrification and studied the impact of three scenarios representing increasingly stringent clean energy policies toward meeting 100% of Minnesota’s electric load with carbon-free generation resources by 2050.
Ruzycki said the findings were that Minnesota carbon dioxide emissions could decline with non-policy-related improvements in energy efficiency and electrification. Also, a policy that focuses on cost-effective and efficient low-carbon resources instead of renewables would result in greater emissions reductions for the overall economy.
“Carbon dioxide reductions of 80% or more by 2050 economy-wide would be challenging without a major transformation of the power supply and transmission system,” Ruzycki said, “but policies that incentivize use of low-carbon electricity could help, allowing for use of electricity where it’s able to reduce the cost of decarbonizing other sectors.”
This research reinforces the value of Great River Energy’s ongoing focus on electrification and its recent announcement that it will transform its generation portfolio. Ruzycki said it also “puts Great River Energy on the forefront of policy conversations on both portfolio transition and electrification.”