Report finds Minnesota outpacing the country in carbon-free electricity

For the fourth straight year, Minnesota produced more than half its electricity from carbon-free sources in 2023, helping lead to a 10 percent annual drop in climate-warming greenhouse gas emissions from the electricity sector.

Those are two of the main findings from the 2024 Minnesota Energy Factsheet released Tuesday by Clean Energy Economy Minnesota and the Business Council for Sustainable Energy.

The report found that 54 percent of the electricity in Minnesota comes from carbon-free sources, including renewable sources like wind, solar and hydropower, along with nuclear power. That compares to 41 percent nationally.

Minnesota lawmakers passed a law last year requiring that utilities in the state generate 100 percent of their electricity from renewable sources by 2040.

“We’re already more than halfway on our goal of 100 percent,” said Amelia Cerling Hennes, managing director of Clean Energy Economy Minnesota. “And we know that we need to speed that up. But it’s important to celebrate the wins that we’re also seeing.”

For the past seven years, the Business Council — a group of trade associations and companies from the energy efficiency, renewable energy and natural gas sectors — has drilled down on Minnesota data, in addition to compiling a national report.

“Minnesota really does better than the U.S. overall,” said Tara Narayanan, an analyst with Bloomberg New Energy Finance, who researched the report.

“In 2023 the emissions coming out of the power system in Minnesota were at their lowest level ever. And it’s very likely that the trend will continue downwards from here,” she said.

Minnesota’s power sector carbon emissions are down 54 percent compared to 2005 levels. That outstrips the national reduction of 42 percent, according to the report.

The electric power sector has been the “runaway success story” when it comes to reducing carbon emissions in Minnesota, Narayanan said.

Most of what the state has done to reduce emissions has come from retiring coal-fired power plants and replacing them with renewable technologies like wind and solar, or natural gas plants, which burn fossil fuels but create fewer greenhouse gas emissions than coal plants.

But other sectors, she said, including transportation, industry and agriculture, aren’t “pulling their weight.”

In the past year, the amount of the state’s electricity produced by renewable sources increased from 31 to 33 percent, according to the report. About 600 megawatts of wind and solar was added to the electric grid.

“We’re anticipating that that’s going to be even higher next year as some of the large utility-scale projects that are being built right now come online,” said Cerling Hennes.

When Eden Prairie-based EVS Engineering started designing solar substations and storage facilities 10 years ago, what president Andy Kim considered a large project was 5 megawatts. Now the average-sized project his company builds is 200 megawatts, he said.

“With the continuous improvement that we see in our industry, I’m certain that we’ll see prices continue to drop,” Kim said. “It just becomes a really compelling argument to continue to build renewables.”

The percentage of the state’s power generated by coal has been slashed by more than half over the past decade, as giant power plants have been shuttered, including the first unit of Xcel’s Sherco plant last year. All the state’s coal plants are scheduled to be retired by 2035.

To make up for that lost power, the percentage of the state’s electricity generated by renewables has increased by 12 percent over the past decade.

The state has also increasingly relied on natural gas to provide electricity. The share of the state’s electric power generated by natural gas has more than doubled in the past decade. It rose 7 percent just last year alone.

Meanwhile, electricity prices have continued to rise, roughly doubling in the past 20 years, due to infrastructure investments and fluctuating natural gas prices, according to the report. Rates in Minnesota are slightly below the national average.

The report also highlighted a surge in electric vehicle registrations, with a 55 percent increase from 2022.

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