2022 was an exciting year of ambitious policies, new investment and continued growth in clean energy. Last week CEEM hosted an event to present the new Minnesota Energy Factsheet and was joined after by a panel of clean energy business and industry leaders to give insight on what that data means for Minnesota’s clean energy economy.
Industry Experts Discuss 2023 Factsheet Trends
- Joe Birkholz, Policy Advisor for Governor Tim Walz and Lieutenant Governor Peggy Flanagan
- Lisa Jacobson, President of the Business Council for Sustainable Energy
- Virginia Mooty Rutter, CEEM’s Director of Engagement and Strategic Initiatives
- David Koerner, Vice President of Marketing at 75F
- Tena Monson, Senior Director of Development Operations at National Grid Renewables
- Eric Pasi, Vice President at New Energy Equity
- Lissa Pawlisch, Director of the Energy Development Section at the Minnesota Department of Commerce
- Mike Sanford, Energy Policy Leader at Cummins
Setting the stage: Policy background at the state and national levels
The event’s first three speakers shared important context on clean energy trends and policy at the state and national levels:
- Birkholz highlighted exciting developments at the state level including Minnesota’s Climate Action Framework, a vision that sets the state on a path to achieve a net-zero economy by 2050. The state also recently released its Greenhouse Gas Report, which reflects the strides Minnesota is making in reducing its greenhouse gas emissions.
- Jacobson presented on the Sustainable Energy in America 2023 Factbook. Globally and nationally, 2022 saw record-breaking energy transition trends. In the United States, there were $141 billion dollars invested in clean energy projects, not including the Inflation Reduction Act (IRA), which is estimated to pump $369 billion into clean energy investments.
- Rutter spotlighted the Minnesota Energy Factsheet. In 2022, 31% of Minnesota’s electricity came from renewable resources. Notably, only 9% of energy was imported, meaning Minnesota is making great headways toward energy independence. Zero-carbon power produced a majority of Minnesota’s electricity for the third year in a row.
Minnesota remains a leader in the clean energy transition
After Birkholz, Jacobson, and Rutter spoke and presented the data, the panelists began their discussion. Throughout the panel, it was clear that Minnesota’s clean energy industry is seeing impressive growth. Despite tariff and supply chain challenges, Minnesota’s solar capacity continued to grow in 2022. Panelist Eric Pasi of New Energy Equity pointed out that there was impressive growth in distributed generation solar, a jump from 212 Megawatts (MW) at the beginning of the year to 270 MW by the end, which continues to create new jobs and economic development throughout Minnesota. The barriers to growth that the solar industry experienced in 2022 are not as prevalent in 2023, providing optimism for the year ahead.
“A lot of what we do in commercial and distributed solar begins with good policy. Last year we had a record year at the legislature and we’re going to eclipse that this year.”- Eric Pasi, New Energy Equity
In addition, Minnesota is ranked first in the Midwest by the American Council for an Energy-Efficient Economy for its energy efficiency programs. “Efficiency is going to continue to be part of Minnesota’s success story”, panelist David Koerner of 75F predicted. Although national energy productivity dipped this year, it grew from 29% to 31% in Minnesota. The energy efficiency sector also employs a sizable workforce. Out of the nearly 58,000 Minnesotans employed by the clean energy sector, three-quarters work in energy efficiency.
There are exciting new projects being developed across the state. In Sherburne County, Xcel Energy and National Grid Renewables are partnering to transform part of a former coal production plant into a 460 MW solar plant. This project will greatly expand Minnesota’s utility-scale solar capacity. In addition, Flint Hills Refinery announced a 45 MW behind-the-meter system, which provides power directly to the facility, avoiding the usually lengthy interconnection process. The Flint Hills project is set to be the largest direct use of solar energy in the country.
Unprecedented investment is going to propel clean energy forward in the coming years
Federal and state legislation are both pivotal in the continued expansion of clean energy. 2022 was a record-breaking year for energy transition investment, with over one trillion dollars invested globally. The United States invested 141 billion dollars in the energy transition (not including the Inflation Reduction Act), making 2022 the second-highest year for energy transition investments nationally, according to the Sustainable Energy in America Factbook.
The panelists cited several exciting investments that will push clean energy forward.
Koerner pointed out that new policies like the IRA and the Climate Action Framework are de-risking sustainable choices for consumers, making options like energy-efficient home appliances and solar panels more attractive. Consumers have long perceived clean energy options to be more expensive and less reliable. However, these options are appearing increasingly reliable and economical to Minnesotans due to policies that have helped reduce their costs.
Panelist Mike Sanford of Cummins recognized the impact federal dollars from the IRA are already making in Minnesota. “The IRA is something we should be excited about, particularly the tax credit for the production of clean energy technologies in the US and the extension of 30% investment tax credits to clean energy products strengthening domestic energy production,” Sanford noted. IRA tax credits for hydrogen led to the construction of an electrolyzer production facility in Fridley, starting at 500 MW of capacity and scaling up to a gigawatt (GW) through 2024 and beyond. This facility has created 100 new jobs and will continue to spur economic growth in the North metro.
Private investment in clean energy is also surging. Koerner discussed the recent investment by Siemens in his company, 75F, which is also backed by Bill Gates. Increased investment in smaller clean energy firms is a promising trend. Large investors are seeing the promise in clean energy and their investments are allowing companies like 75F to thrive.
Quicker progress is necessary to achieve clean energy goals
Without a doubt, Minnesota’s clean energy progress is impressive. However, the panelists agreed that the acceleration of clean energy growth will be crucial in the coming years. “The trends that we’re seeing are fantastic, and we need to amp it up. To get to where we’re going we need to quicken the pace”, said Pawlisch. Policies have set out ambitious goals for us and we can achieve them if we work urgently.
How can the state accelerate its pace to a clean energy economy?
- Starting right now: It’s important to look to the future, but huge steps can be taken now. Companies should take action in whatever way they can now while also planning for the long term.
- Funds, funds, funds: Panelist Lissa Pawlisch of the Minnesota Department of Commerce highlighted the importance of bringing federal funds into Minnesota. Bodies like the Minnesota Department of Commerce are partnering with utilities, community groups and businesses to bring federal dollars to Minnesota.
- Focus on efficiency: Efficiency is already a strength of Minnesota. Emphasizing this in the coming years will help the state transition to a clean energy economy. The more economic growth we are able to achieve with each unit of energy, the better positioned we will be to meet clean energy goals.
- Focusing on equity: Pasi highlighted the need to make sure low and moderate-income communities are included in the clean energy transition, something that the federal Justice40 Initiative, which ensures that 40 percent of certain federal investments will flow to communities facing environmental injustices, points us towards.
- Energy storage: People need a resilient and reliable energy grid. In the coming years, companies need to continue expanding distributed generation through microgrids combined with different types of assets and storage. Minnesota has abundant wind and solar resources. The state has the space to develop wind extensively. Planned solar installation has dropped in Minnesota, but with intentional efforts to attract projects and increase solar interconnection capacity, solar capacity can continue to advance.
Communities are crucial voices in the clean energy transition
Engagement is another vital piece of the clean energy transition. There are outstanding clean energy technologies being developed, but the other piece of the equation is getting community members involved with the process. Engagement must be transparent and inclusive. People need to be able to see why clean energy matters to the economy and how clean energy will benefit communities.
Equity and engagement go hand in hand. Low and middle income communities need to be equally included in this process. Pawlisch states that the Department of Commerce is working hard to include equity in all of its clean energy goals, including the way they do community engagement. Pasi hopes to replicate his company’s movement to subscribe 100% of low and moderate income households in Virginia to community solar in Minnesota.