Top 5 Takeaways from the 2024 Minnesota Energy Factsheet

May 8, 2024
The 2024 Minnesota Energy Factsheet highlights steady growth and commitment to transitioning to a clean energy economy. Beyond the historic year in clean energy policy, the business community utilized favorable market conditions and government incentive programs to implement projects. The state continues decarbonizing power sector emissions, ramping up hydrogen production and retiring coal facilities.

The 2024 Minnesota Energy Factsheet is a project of Clean Energy Economy Minnesota and the Business Council for Sustainable Energy, with data contributions from BloombergNEF and the Minnesota Department of Commerce. The project community thanks Marsh, Full Stack Saint Paul and the McKnight Foundation for their generous financial support this year.

The 2024 Minnesota Energy Factsheet provides a fact-based overview of Minnesota’s energy sector, presents key metrics and highlights recent trends. Here are the top five takeaways from this year’s report.

1. A historic year for clean energy policy

​​From the passage of the 100% Clean Energy by 2040 law to a suite of climate and clean energy legislation that contained an extensive list of incentives, investments and rebates, 2023 was an extraordinary year that showcased progress and commitment across policies and markets.

Early in the year and the legislative session, Minnesota joined ten other states, as well as Washington, D.C. and Puerto Rico, to enact a law that requires a transition to 100% carbon-free electricity. The landmark bill signed into law by Governor Tim Walz on February 7 required all electric utilities to generate or procure only carbon-free energy by 2040 from zero-carbon sources. The bill also included a 55% by 2035 renewable energy standard. The Minnesota Legislature enacted additional legislation in four key areas as part of a broader Environment and Energy Omnibus Bill, which included:

Consumer incentives

New consumer incentives and rebates for a variety of carbon reduction technologies, including electric vehicles (EVs), air source heat pumps and electrical panel upgrades that also leverage federal Inflation Reduction Act (IRA) dollars.

Minnesota Energy Alley

Funding Minnesota Energy Alley, a new state-wide initiative that provides programming, business support and seed funding for entrepreneurs and startups to demonstrate emerging energy technologies across the state.

Minnesota Climate Innovation Finance Authority

Creating and funding the Minnesota Climate Innovation Finance Authority to accelerate the adoption of proven clean energy technologies and greenhouse gas (GHG) reduction projects while also delivering benefits to historically underserved communities.

Transmission and other programs

Funding a high-voltage transmission line upgrade and programs for Solar on Schools and public buildings as well as establishing a new energy storage incentive program.

A bill creating the ‘State Competitiveness Fund’ was also passed early in the year by the Minnesota Legislature and was signed into law by Governor Walz. Ultimately funded with $190 million in total, the fund will help state, local and tribal governments and other entities pursue federal grants for clean energy infrastructure. The fund helps ensure Minnesota remains competitive for the billions in funding available through the IRA and the Infrastructure Investment and Jobs Act (IIJA), as the law requires the state to establish its own pool of matching funds. Furthermore, the fund includes resources for technical assistance and grant-writing support.

2. More than half of Minnesota’s electricity comes from carbon-free sources

For the fourth consecutive year, 54% of Minnesota’s electricity generation was provided by zero-carbon power, significantly outpacing the national share of 41%. A full one-third of Minnesota’s electricity generation is being powered by renewables, with another 20% powered by the state’s nuclear fleet.

Similar to the trends at the federal level, Minnesota’s electric sector has stabilized post-pandemic. However, during this time, Minnesota has continued to outpace the nation in carbon dioxide (CO2) emissions reduction, now 54% below 2005 levels versus 42% reduction nationwide. Most remarkably, Minnesota’s power sector reduced its CO2 emissions by 10% in 2023 to the lowest point in the 19 years the statistic has been recorded.

3. Renewable energy joins as coal retires

Minnesota’s electricity generation mix continues to trend toward renewables and natural gas and away from coal-fired generation. In the last ten years, renewables accounted for 84% of all new capacity, with all other additions being natural gas and oil plants. In 2023, preliminary data shows that Minnesota built primarily renewable power plants, totaling 606MW of new wind and solar generation. All coal-fired power plants located in Minnesota plan to be retired by 2035 with 1.9GW retired over the last decade. For context, 2.0GW of electricity can power roughly 1.5 million American homes.

In 2023, 18.86 TWh of electricity generated in Minnesota came from renewable sources. 12.77 TWh of electricity generated in Minnesota came from coal. Minnesota’s new 100% Clean Energy by 2040 law, combined with the implementation of Minnesota’s Climate Action Framework, will continue to be primary drivers for this trend to continue and even speed up.

4. Minnesotans are consistently choosing electric vehicles

Last year was an exceptional year for the electric vehicle (EV) industry at the national and state levels. The growth in sales of EVs, including battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs), continues to be strong nationally, with another record-breaking year.

National sales of EVs and fuel-cell vehicles hit nearly 1.46 million, up 50% from 2022. Beyond the IRA incentives that made EVs more affordable, there were a slew of new models, making EVs even more attractive to consumers.

According to the Minnesota Department of Transportation (MnDOT), as of December 2023, the state had approximately 56,010 EVs on the road. From 2019 through 2023, annual BEV registrations increased nearly 13x to 13,204 units. Annual PHEV registrations increased 48% from 2022 to 2023 to 4,179 units. Combined annual registrations increased 55% from 2022 to 2023 to 17,383 units. This aligns with the post-pandemic stabilization.

5. Hydrogen puts Minnesota on the map

The IRA has significantly incentivized hydrogen projects, which is evident in the rapid increase in hydrogen supply and electrolyzer shipments. Before 2018, the United States produced less than 505,000 million metric tons of hydrogen annually. In comparison, in 2023, the U.S. produced over 10,373,523 million metric tons of hydrogen, a 20x increase. An estimated 437MW of hydrogen electrolyzer capacity was shipped nationwide to meet this demand. Cummins, which specializes in diesel and alternative fuel engines and generators as well as related components and technology, shipped almost 6% of the nation’s total electrolyzers from their Fridley, Minnesota location.

Learn more about the Minnesota Energy Factsheet

The Minnesota Energy Factsheet is a companion to the 2024 Sustainable Energy in America Factbook. This project is made possible with partnership from the Business Council for Sustainable Energy and data contributions from BloombergNEF and the Minnesota Department of Commerce.

The Factsheet outlines key trends in the energy sector. As America continues its transformation to cleaner, cheaper sustainable energy, Minnesota continues to be a leader both regionally and nationally.

These statistics, along with other highlights described below, show how Minnesota is working to create a strong clean energy economy. To learn about the clean energy jobs that are facilitating this work, visit our Clean Jobs page.

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