Minnesota utilities will soon use existing fossil fuel plant infrastructure to transport clean energy to Midwest’s regional electricity grid.
The workaround avoids the Midwest’s bottlenecked transmission grid managed by the Midwest Independent System Operator, Inc. (MISO), the regional transmission organization currently hamstrung by a lengthy project queue and a capacity shortage.
The process of connecting new generation to the grid in MISO’s 15-state territory takes an average of three years, according to an Americans for a Clean Energy Grid study. Meanwhile, interconnection costs have more than quadrupled in the last few years and now represent almost a quarter of a typical wind farm’s budget.
As a result, projects have been canceled or trimmed back, with 5 gigawatts of clean projects pulled in the last two years despite having signed power purchase agreements, the study reported.
The situation has sent Minnesota utilities on a search for existing, underutilized transmission capacity, often connected to aging or retired fossil fuel power plants, or “peaker” plants that only run sporadically during high-demand times for electricity.
“I think it’s a great idea because we’re in a situation where we don’t have enough transmission capacity for our evolving system to add wind and solar quickly,” said Allen Gleckner, lead director of clean electricity at Fresh Energy, which also publishes the Energy News Network. “It’s good to see utilities leveraging all the ways they can to add renewables without having to deal with difficulty through the regular interconnection process right now.”
Though transmission is critical to a clean energy transition, the sector remains mired in challenges ranging from underinvestment to siting and permitting barriers. Recent projects in the region, such as the $2 billion CapX2020, added 800 miles of transmission lines that quickly filled with new wind and solar developments. President Joe Biden’s administration plans to ramp up spending on transmission to relieve the backlog, but it will likely take years to see the impact.
“The grid is going to be the vehicle that allows Minnesota to reach its clean energy goals,” said Beth Soholt, executive director of the Clean Grid Alliance. “An enhanced grid is going to be required for getting to a higher level of electric vehicles, for electrifying buildings and for continuing to reduce carbon from the electricity sector. It’s all going to be built with the grid as the backbone.”
NextEra Energy is building two wind farms that will use Great River Energy’s peaker plants to transmit electricity. The first project is a new 259 megawatt wind farm that will be linked to the grid at Great River Energy’s Pleasant Valley Station peaker plant southwest of Rochester, Minnesota. A 300 MW wind project will interconnect at Great River Energy’s Lakefield Junction Station in south-central Minnesota. The roughly two-decade-old plants are around 30 to 40 miles from the wind farms.
Otter Tail Power plans to build a 49.9 MW solar facility at Hoot Lake, a 100-year-old western Minnesota coal plant that closed in May. The utility will use about one-third of the existing transmission capacity at the site to connect the solar to the MISO grid in 2023. Minnesota Power is also preparing three new solar installations next year, two of which will be built near existing power facilities.
On a much larger scale, Xcel Energy’s integrated resource plan calls for using interconnection rights at its Sherburne County Generating Plant (Sherco) and Allen S. King Generating Plant, both just outside the Twin Cities. The utility has rights for 2,600 megawatts and is considering ways to tap wind resources from southwest Minnesota using a new transmission line that would connect to the Sherco plant.
Last week, clean energy advocates raised concerns about two additional natural gas peaking plants in Xcel’s resource plan, Soholt said, but they applauded the approach of using Sherco and King to transport clean energy.
Zac Ruzycki, resource planning director for Great River Energy, said the utility plans to match all of its remaining peaker plants with wind farms, allowing as much as 1,400 MW of clean energy to enter the grid. The advantage of using peaker plant interconnection rights goes beyond just avoiding the MISO queue, he said.
Typically, new wind projects are studied together and assessed the cost of any required grid upgrades. By using existing interconnection rights, the wind farms avoid grid improvement costs, delays, and unexpected changes that might be required for a new grid interconnection through MISO.
Peaking plants generate power less than 5% of the year, he said, with utilities mainly initiating their use when weather or other issues threaten reliability, or when market prices surge. Great River Energy also sees peakers as a backstop to help balance variable power sources such as wind and solar.
“We think it’s a great complement because we’re utilizing the interconnection to create a more efficient and more effective solution for our members,” Ruzycki said.
Mark Lennox, project director for NextEra Energy’s Dodge County Wind, said the company will use what MISO calls a “surplus interconnection” to connect to the Pleasant Valley Station peaker plant. It allows new energy sources to join the grid at existing plants not using their full transmission capacity. NextEra pulled the project from the traditional MISO process in 2020 “because of exceedingly uneconomic costs.”
Otter Tail’s manager of renewable development, Randy Synstelien, said solar made the most sense at the utility’s Hoot Lake site, because the site had plenty of space available on site.
“We’re reusing the interconnection and reusing the land on that site,” he said.
Otter Tail sees the possibility of using other sites, potentially peaker plants, to incorporate clean energy transmission into other existing interconnections. The advantages of the Hoot Lake include an “expedited process” and lower interconnection costs, especially since in rural areas, even shared system upgrade costs for a clean energy project “can be very substantial and impact project viability,” Synstelien said.
Great River Energy’s initial attempt to build wind farms and connect them to a power plant failed. After finding no buyers, Great River Energy announced the closure of the 1,100 MW Coal Creek Station in McLean County, North Dakota, in 2020. McLean County officials passed a moratorium on wind farms after learning Great River Energy had plans to develop wind and use the plant’s grid connection to transport clean energy.
Having been rebuffed by the county, Great River Energy switched the investment it planned to make in North Dakota to Minnesota. Four Next Era Energy wind farms in Minnesota will now sell power to Great River Energy.
“The original plan was to site wind in North Dakota, and when that didn’t work out, we pivoted to alternative plans that we had in Minnesota,” Ruzycki said. “Once the Coal Creek Station interconnection was no longer in our power supply plan, we were able to leverage the interconnection of our other generators to our advantage.”
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