University of Minnesota
University of Minnesota
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Energy Transition Lab

Modernizing Minnesota’s Grid: An Economic Analysis of Energy Storage Opportunities

Energy Storage Paired with Solar Found to Be More Cost Effective in Minnesota Today than Natural Gas Peaking Plants

As federal policy on renewable energy is being rolled back, a new UMN-led report finds that when environmental benefits are considered combined energy storage and solar arrays can be a more cost-effective alternative in Minnesota – implementable today – to natural gas peaking plants, which are fired up only to meet peak demand.

It also shows that increasing the deployment of energy storage combined with renewable energy would help Minnesota meet its statutory goal of 80 percent carbon reduction by 2050 sooner and at a lower cost than other technologies.

The report, “Modernizing Minnesota’s Grid: An Economic Analysis of Energy Storage Opportunities,” is the result of months-long effort led by the Energy Transition Lab (ETL) at the University of Minnesota’s Institute on the Environment. Lessons learned could also be applied to other Midwest states that are in the Midcontinent Independent System Operator (MISO) footprint.

“Energy storage is a linchpin for Minnesota: It has the potential to reduce our system costs, increase electric grid resiliency, and even decrease greenhouse gas emissions in our broader coal-dependent region,” said Ellen Anderson, director of the Energy Transition Lab. “While the federal government questions the reliability of renewable energy, states like Minnesota are stepping up to show it’s possible to connect renewables and storage to reduce both costs and greenhouse gas emissions, while maintaining a reliable grid.”

Input from dozens of Minnesota energy experts laid the foundation for the analysis and final report.   ETL convened more than 60 stakeholders, including representatives from utilities, energy technology companies, nonprofits and government, in two Energy Storage Strategy Workshops starting in 2016 to assess the opportunities for energy storage in Minnesota and at MISO. Participants explored whether and how energy storage could be used to help Minnesota achieve its energy policy objectives, and enable greater system efficiency, resiliency and affordability. Project collaborators Strategen Consulting and Vibrant Clean Energy conducted the use-case and system-wide modeling for the analysis, with input from MISO.

In addition to showing that storage plus solar already could be more cost effective than peaking gas plants, including environmental benefits, the analysis shows that the deployment of storage in Minnesota is projected to increase the use of low-cost renewable energy generation dispatched in MISO and to reduce the need for expensive transmission investments.

Furthermore, it shows that as standalone storage becomes more economic, it will be able to compete with and displace new gas combustion turbines installed to meet peak demand. Beyond 2022, storage was found to be more cost effective than a simple cycle gas-fired peaking plant for meeting Minnesota’s capacity needs.

Connexus, Minnesota’s largest distribution cooperative, was a participant in the workshops and is already pursuing procurement of a 20MW, 40MWh energy-storage system. It will be one of largest storage projects of its kind in the Midwest. According to Connexus, responses to its Request for Proposals have been encouraging, with prices even more competitive than anticipated.

“We have been assessing energy storage to understand its potential benefits to our distribution system and members. Just like solar PV, with continuing drop in storage pricing, it is now becoming cost effective in specific applications,” said Brian Burandt, Vice President of Power Supply and Business Development at Connexus. “While we expect broad applications will be enabled with ongoing cost reductions and performance enhancements, we believe the technology is ready today for application on our system. That will save our member-owners and Minnesotans on electric costs, but in tandem, facilitate renewable energy growth to reduce greenhouse gas emissions.”

The energy storage planning process was spearheaded by ETL and the Minnesota Energy Storage Alliance (MESA), with support from the Energy Foundation, the McKnight Foundation, the Minneapolis Foundation, the Carolyn Foundation, AES Energy Storage, General Electric, Next Era Energy Resources, Mortenson Construction, Great River Energy and Strategen Consulting.

MESA Hot Topic: What can MN learn from the West Coast?

May 1, 2017Barb JacobsEvents, MESAComments Off on MESA Hot Topic: What can MN learn from the West Coast?

Recently, the Energy Transition Lab led a Minnesota delegation on a week long tour of energy storage and microgrid projects in California and Washington. On 5-15-17, the Minnesota Energy Storage Alliance hosted a Hot Topic event focusing on the experiences and lessons-learned from this group, comprised of University of Minnesota, Public Utilities Commission, NGO and Utility representatives.

You can watch a recording of the event by clicking here.

You can access the slides shown at the presentation here.

The discussion, facilitated by Ellen Anderson, executive director of the Energy Transition Lab, featured:

  • Commissioner John Tuma, Minnesota Public Utilities Commission
  • Mike Kaluzniak, Facilities Staff, Minnesota Public Utilities Commission
  • Alison Hoxie, Professor, University of Minnesota-Duluth
  • Amy Fredregill, Resource Planning and Strategy Manager, Xcel Energy
  • Erick Van Meter, Assistant Director for Utility Operations, University of Minnesota
  • Jodi Slick, CEO, Ecolibrium3
  • Joel Tallaksen, Renewable Energy Research Scientist, West Central Outreach and Research Center, University of Minnesota
  • Shane Stennes, Director of Sustainability, University of Minnesota-Twin Cities
  • Troy Goodnough, Director of Sustainability, University of Minnesota-Morris
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Administration
The Energy Transition Lab is a strategic initiative of the University of Minnesota's Institute on the Environment in partnership with the Law School.
Funding
Funding for the Energy Transition Lab is primarily provided by the Institute on the Environment. Other funders include McKnight Foundation, Energy Foundation, Carolyn Foundation, US Department of Energy, Wind Energy Foundation and the University of California Berkeley Energy and Climate Institute. Support for energy storage work is provided by the Minneapolis Foundation, Great River Energy, Mortenson Construction, AES Corporation, Next Era Energy Resources, and General Electric. Funders have no role in study design, data collection and analysis, decision to publish, or preparation of any manuscript.