No room in the grid
- Feb 25, 2020 5:47 pm GMT
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Feb. 22--REGIONAL -- Whether you're talking about aging roads and bridges, ditch systems and tile lines or electrical generation and the transmission grid, a century of progress has created a need for investment in infrastructure across the region.
This isn't a new phenomenon, but recent developments -- particularly in the energy grid -- could stall progress and thwart economic development.
During a recent meeting of the Nobles County Board of Commissioners, Gene Metz, who also serves on the Rural Minnesota Energy Board, said the transmission grid that spans Minnesota and neighboring states is running out of space. What that means locally is that until the grid is expanded, or other forms of power removed, the development of renewable energy projects may come to a standstill.
"Wind and solar production is going to stop in rural Minnesota if transmission is not brought up to speed," Metz said in late January, noting that Nobles 2 Wind, still under construction, could be the last wind energy project to be developed for a while.
For Metz, an investor in wind energy, it's concerning on several fronts. Wind energy has proven to make good economic sense for landowners who get paid to have turbines on their property, and it has also proven to be an economic boom for counties who collect annual wind energy production tax revenues.
In 2018, Nobles County received more than $1.1 million from the tax, while Murray County collected more than $1.3 million and Jackson County more than $2.2 million. Of those dollars, 80% stays with the county, while the remaining 20% goes to the townships where the turbines are located.
No projects advancing
Peder Mewis is regional policy manager with Clean Grid Alliance, a non-profit advocacy organization for utility-scale renewable energy projects in nine states, from the Dakotas, Minnesota, Iowa and Wisconsin to Missouri, Michigan, Illinois and Indiana.
Mewis said that in September 2019, the Midcontinent Independent System Operator (MISO) -- a non-profit organization tasked with determining the cost to developers for each project proposing to hook into the transmission grid -- completed a study of 4,000 megawatts of proposed projects. When developers were notified of their cost during this last round, nearly all of the projects had to be shelved.
"Over the years, we've had thousands and thousands of megawatts interconnected to all these transmission lines in the Upper Midwest," Mewis said.
While it's normal for some project proposals to be eliminated following the MISO study, only two are still considering moving forward -- a 200-megawatt wind project and a 50-megawatt solar project.
"All indications are, right now, that in the final stages of the study cycle they may not survive either because it's just cost prohibitive," Mewis said. "The essence of this is the bulk transmission system up here in the Dakotas, Minnesota and Iowa is essentially full."
Tenaska, the developer for the Nobles 2 Wind project, was among those exploring additional interconnection requests, according to Timberly Ross, its director of communications and public relations. The projects were in the early stages of development and their locations were not yet determined, but Ross said the MISO upgrades were too costly. As a result, the projects have been shelved.
Progress is slow
Mewis said if work were to begin today on expanding the grid, it would take five to six years -- minimum -- to get steel in the ground. That, he added, is an aggressive timeline considering that MISO has to identify where the need is, select a route and then go through the process of land rights.
"Transmission lines are very controversial because they run through people's property," Mewis said. "Nobody wants these things underneath their house. Wind projects can be controversial, solar can be controversial, transmission line projects are very controversial."
For historical reference, Mewis shared that in 2011, 10 utility operators in Minnesota, the Dakotas and Iowa agreed to build and fund numerous new transmission lines to be able to accept the wind-generated power being added to the grid. At the same time, MISO approved 17 new transmission lines -- called the MISO MVP (Multi-Value Portfolio) -- spaced throughout the full MISO footprint, which spans 15 states and Manitoba, Canada.
The last of those new lines, stretching from northeast Iowa to Madison, Wisconsin, is still under construction.
The increased capacity the new lines have brought to the transmission system has made it possible for continued renewable energy development in Illinois and Indiana, but it doesn't help states like Minnesota.
"When they approved these 17 projects, each state had to pay for a portion of these lines, even if they weren't in their state," Mewis shared. "It was based on (energy) load in their state."
States, however, didn't like it that their ratepayers had to pay for transmission lines being built in another state.
"This is for the regional stability of the grid," Mewis explained, adding that everyone needs to pay their fair share. Still, he acknowledged this formula may not work in the future.
While the ratepayers will ultimately be the ones to pay for grid expansion, getting to that point seems to be the biggest hurdle.
What happens next?
Mewis said upgrading the transmission grid could cost tens to hundreds of millions of dollars, and there is no federal money being directed toward expanding transmission grids.
The Midwest Governor's Association has made transmission infrastructure a top priority, and Mewis said the group has sent a letter to MISO asking the group to "keep plowing forward on transmission."
"MISO is not policy makers, but they are policy takers," Mewis said. "If Minnesota passed a 100% clean energy law by 2050, (MISO) would take that into consideration in their planning because they have to."
Both the Clean Grid Alliance and Rural Minnesota Energy Board stand with the group of governors to prioritize expansion of the transmission grid.
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