Opportunities to achieve historic clean energy progress abound in 2023 Legislative Session
This post was originally published in MinnPost as an op-ed on December 20, 2022.
The signals of change started turning with the historic passage of the Inflation Reduction Act (IRA) preceded by the CHIPS and Science Act and Infrastructure Investment and Jobs Act (IIJA). This suite of federal investment provides important resources while also serving as a seismic market catalyst to turbocharge the development and deployment of clean energy technologies. With a projected $17.6 billion surplus combined with vetted policy proposals that have received bipartisan support from prior years – we can catapult our state back to its status as the clean energy leader in the Midwest and the country.
100% clean energy by 2040
First introduced by Gov. Tim Walz in 2019 as part of a package of clean energy priorities, 100% Clean Energy by 2040 has gone through several iterations before arriving at its current state. This bill would require utilities in Minnesota to fully decarbonize their electricity generation by the year 2040. It would serve as an important signal to businesses and other states that Minnesota is fully committed to a clean energy future while building on the success the power sector has already achieved in delivering the biggest greenhouse gas emissions reduction in Minnesota over the last decade. Passage of this policy would also go a long way towards achieving the governor’s Climate Action Framework goal of economy-wide net zero emissions by 2050.
Decarbonizing Minnesota’s economy
Next up is an equally important task: tackling decarbonization across our entire economy – with particular emphasis on the buildings and transportation sectors. Buildings in Minnesota (including our homes, commercial buildings, and large multi-family buildings) represent 40% of energy use in the state. Many of our existing buildings are not energy efficient – which put another way means buildings represent a massive opportunity to reduce energy waste and save money while also slashing greenhouse gas emissions.
It is for this reason that energy efficiency was so highly incentivized in the IRA. The bill provides tax credits and rebates for everything from efficient doors and windows, insulation, heat pump water heaters, and more. In Minnesota, we can leverage this progress by ensuring that all new construction is built to the most energy efficient standards possible by updating our existing building codes.
Transportation is another sector that deserves increased attention as it is the largest source of greenhouse gas emissions in Minnesota. Since 2005, we have only been able to decrease these emissions by 7%. Minnesota’s Clean Car Standards implemented last year will help, but we can and must go further. We can leverage federal funds from the IIJA to build out an EV charging network across the state to help speed consumer adoption of electric vehicles. We can also support a Clean Fuels Standard, which will reduce the use of carbon-intensive fuels while providing incentives to transition to lower-carbon alternatives including electricity, hydrogen, and biofuels.
Workforce and innovation
Global investment in the energy transition in 2021 totaled $755 billion according to BloombergNEF. We anticipate that 2022 numbers will break all records for investing in energy and climate technology to date.
There are already clear signals from the market that the IIJA and IRA investments will be game-changers for the transition of the energy system and opening additional pathways for emerging clean technologies. Within weeks of the IRA’s passage, companies were announcing plans for new U.S. and North American facilities to meet the growing demands for electric vehicles and infrastructure, battery storage, and grid modernization. In fact, we’ve seen it right here at home with Cummins’ Fridley-based site recently announcing it would begin manufacturing electrolyzers for hydrogen production. Company leaders said the IRA provided the business incentives needed to make this strategic investment decision. Sen. Tina Smith, a pivotal clean energy champion in Washington, D.C., recently hosted a roundtable discussion with my organization along with a dozen clean energy business leaders to discuss this and other opportunities for job creation and deployment of energy innovations made possible by the IRA.
Capturing the full economic opportunity of this unprecedented moment will take collaboration, investment, and the ambition to make Minnesota a regional and global leader in energy and cleantech. Specifically, it means investing in clean energy technology commercialization and the workforce needed to deliver these solutions as well as supporting efforts to enhance manufacturing incentives to support domestic sourcing.
Leveraging federal funds with state matching dollars
Passage of the IIJA, CHIPS and Science Act, and the IRA provides an extraordinary opportunity to hasten our progress in delivering clean, affordable, and reliable energy solutions that will benefit all Minnesotans. But passage of those bills was just the beginning. Minnesota is set to receive around $7.3 billion through the IIJA to fund infrastructure projects in transportation, water, and energy. Around 80% of that federal money requires a state match. Minnesota has already missed out on some of those funds due to inaction during the last legislative session. Passing matching state funding early this session is of utmost importance to ensure Minnesota is competitive in its efforts to secure federal funds while supporting the businesses and communities whose projects will stand to benefit from this once-in-a-generation opportunity.
As Minnesotans, we likely won’t tell anyone, but we know we are the best in the Midwest, if not the country. We are home to the most Fortune 500 businesses per capita and are among the best states for economic opportunity. But we’re also home to the second fastest warming state in the nation. It is imperative that policymakers on both sides of the aisle work together to take action this legislative session to implement this ambitious slate of policies. These are critical building blocks to ensure Minnesota leads the way to seizing the enormous economic and jobs potential offered by the transformation of our energy system while delivering a secure, resilient, and innovative future that allows all Minnesotans to thrive and prosper.