The roadmap to Minnesota's clean energy future
Minnesota’s energy system is going through a period of transformational change. Evolving consumer preferences, dynamic new technologies and services, and recent federal investment are creating a historic opportunity for our state to lead the modernization of the energy sector. The next four years will allow Minnesota to harness the economic power of the clean energy industry to transform our state’s economy and put the fight for quality jobs at the center of a vision for the state’s energy future.
Clean energy is diversifying and transforming Minnesota’s economy. Billions of public and private sector dollars have been invested in innovative technologies and services that provide reliable, affordable, and resilient energy to consumers. Strong policies and declining costs are helping Minnesota’s businesses and entrepreneurs deliver these products and services to the market – creating thousands of jobs and bolstering local economies.
Clean energy companies employed almost 58,000 Minnesotans at the end of 2021 with 69% of all clean energy jobs residing in small businesses that employ fewer than 20 people. The renewables sector in particular has fully rebounded from the pandemic, posting nearly 9% job growth with subsector standouts, like solar growing 10% last year. Like other industries across Minnesota, the clean energy industry reports significant issues finding the necessary labor to meet demand with 85% of clean energy employers reporting trouble hiring last year.
Following truly unprecedented federal investment in infrastructure generally and clean energy specifically, the next four years will provide the opportunity for Minnesota to lead the clean energy transition and cement our state as a 21st-century global leader for clean energy innovation – much like how key policy decisions and public-private partnerships helped to make Minnesota’s Medical Alley the envy of the nation. Here are seven key policy areas we have identified that will help Minnesota achieve our shared energy vision:
MAXIMIZE HISTORIC LEVELS OF FEDERAL FUNDING
The next few years will be key to Minnesota staking a claim as an innovation leader in the clean energy technology space. The bipartisan Infrastructure Investment and Jobs Act (IIJA) & the Inflation Reduction Act (IRA) provide billions of dollars in support for states, local governments, utilities, and other entities to lead the way. However, to ensure Minnesotans can receive the maximum benefit from these laws, strong leadership from the governor’s office and coordination across agencies will be required.
A significant portion of the funding available related to energy and efficiency in the IIJA is in the form of competitive grants – if Minnesotans do not reap the benefits, other states will. While the details are not yet finalized, inter-agency coordination is expected to be key to the successful deployment of many of the funds and opportunities in the IRA as well. The IRA also includes several provisions that will encourage domestic manufacturing, domestic mineral procurement, and the use of prevailing wage for clean energy projects. The cross-agency cooperation and communication will be vital to make sure Minnesota can fully benefit.
The next governor should appoint or assign a person to oversee the successful implementation of these federal laws as their main role. We saw many states, and even some municipalities, appoint “IIJA Czars” to work through all the coordination needed and this would be a good model to expand upon, with the inclusion of the recently passed IRA.
PUBLIC UTILITIES COMMISSIONERS
As a regulatory body, the Public Utilities Commission (PUC) plays an outsized role in Minnesota’s clean energy transition. Appointing or reappointing commissioners at the PUC who understand the value and potential of clean energy is a critical part of the state’s transition strategy. Simultaneously, prioritize educating and working with the Minnesota State Senate to confirm these commissioners.
Ensuring Minnesota’s PUC has commissioners committed to a clean energy future that is reliable, resilient, and low-cost is key to our clean energy future. Working with the Minnesota State Senate to identify and confirm commissioners that will understand this balance will be key.
Lead on permitting reform – make Minnesota an easier and more reliable place to do business for clean energy businesses. Minnesota has proven it’s a great place to build renewables, but unnecessary red tape and bureaucracy are standing in the way of Minnesota fully maximizing its potential. As large-scale renewable developers look to develop projects across the Midcontinent Independent System Operator (MISO) area, Minnesota’s cumbersome, unpredictable, and time-consuming regulatory process stands as an unnecessary burden to doing business in Minnesota. With commonsense reforms to these processes, Minnesota can allow the private sector to lead the way toward our clean energy future.
By making Minnesota an easier place to do business with less confusing and more timely processes, Minnesota’s private sector companies, counties, townships, and landowners will be able to capitalize on the future of clean energy – with landowners having a new steady, diversified source of income and local governments receiving more tax revenue. All Minnesotans will benefit from decarbonizing our electric grid with inexpensive wind, solar, and storage replacing increasingly price-volatile gas and coal.
INVEST IN TRANSMISSION AND CLEAR INTERCONNECTION BACKLOGS
Prioritize transmission and other grid resilience upgrades. Transmitting clean, low-cost renewable energy from where it is produced to where it is needed is perhaps the biggest challenge facing the exponential growth of renewable electricity. Solving the transmission problem, the interconnection backlog, and making the grid more resilient and secure are among the key challenges over the next four years.
In July 2022, the MISO Board of Directors unanimously approved a $10.3 billion investment portfolio of new transmission projects across the Midwest, including hundreds of miles of new transmission lines in Minnesota. Altogether, the new transmission will allow up to 53 GW of new generation capacity to connect to the transmission grid. While this is a hugely important announcement, many of the new lines will not be operational until 2029 and 2030.
Allowing transmission projects along MnDOT’s right of ways is one way to lessen the burdens placed on the construction of these vital transmission lines. This solution was included in Minnesota’s Climate Action Framework released in the fall of 2022.
Interconnection backlogs are hampering clean energy projects across the state, frustrating utilities, project developers, and consumers. From utility-scale projects to smaller residential installations, the backlog has created long delays and lost revenue. Finding a fair and equitable way to clear this backlog and setting predictable and efficient standards to ensure long delays and uncertainty do not hamper future project development provides a key policy opportunity.
ENCOURAGE DECARBONIZING THE TRANSPORTATION SECTOR
Decarbonizing transportation and encouraging electric vehicle (EV) adoption by investing in necessary infrastructure. The fastest-growing part of the clean energy economy in 2021 was the advanced transportation sector, growing jobs by 23% and accounting for almost 4,000 jobs statewide. As EV adoption is reaching critical adoption milestones, the build-out of charging infrastructure will be absolutely vital to achieving the state’s greenhouse gas emission reduction goals. The IIJA federal legislation has billions dedicated to this effort and Minnesota has submitted the necessary plan to continue working to secure that funding. This build-out of EV charging infrastructure also lends itself to public-private partnerships that should be leaned into.
Advancement of the Clean Fuels Standard via bipartisan legislation like the Future Fuels Act is another way we can drive down emissions in Minnesota’s transportation sector. This market-driven approach will improve our energy security, stimulate rural economic development and jobs, boost innovation, and slash emissions from our state’s transportation sector.
TRAIN A NEW CLEAN ENERGY WORKFORCE
One of the biggest ongoing challenges of the clean energy transition is training a new workforce to sustain the industry. In fact, 85% of Minnesota clean energy employers said it was somewhat or very difficult to hire last year. Trade skill sets like construction and electrical as well as engineering, sales, and business professions are all in high demand as Minnesota makes its transition to a clean energy economy.
From labor unions, like LIUNA with long-standing, established training programs, to new training programs specifically targeting solar workforce needs located in North Minneapolis – there are many excellent programs across the state working on this issue – but they require greater coordination and investment from the state.
ADOPT NEW BUILDING CODES
In 2017, Minnesota’s building sector consumed 40.6% of the total energy consumed in the state, 19.5% of which was from within the commercial buildings sector, including large multifamily buildings. As such big power consumers, buildings represent a significant opportunity to dramatically slash emissions and increase efficiency by implementing a wide variety of energy efficiency measures.
We support the following goal outlined in Minnesota’s Climate Action Framework: Improving building codes and standards so that all new commercial and large multi-family buildings produce net-zero greenhouse gas emissions by 2036. Updating our state’s building codes for all new construction is one of the lowest-cost, biggest reward policies we can implement.