Central to Minnesota Power’s defense of the Nemadji Trail Energy Center, a natural gas-powered electricity-generating facility proposed for Superior, is that it is needed to provide reliable, economic electricity. However, new evidence in a study by the Rocky Mountain Institute (“A Bridge Backwards? The Risky Economics of New Natural Gas Infrastructure in the United States”) shows that a clean-energy portfolio consisting of wind, solar, storage, energy efficiency, and demand response now matches the cost of electricity from 90% of new natural-gas plants in the United States — with all the reliability expected from a natural-gas plant.
I reached out to the authors of the study just to make sure the Nemadji Trail Energy Center wasn’t in the lucky 10% that still makes economic sense. It isn’t. In fact, no proposed natural-gas plant in the Midwest can now beat clean-energy portfolios, which have fallen in price by 80% in the last decade.
Even worse for the Nemadji Trail Energy Center, clean-energy portfolios are getting less expensive every year. Within five years, just as Minnesota Power would flip the switch on at the Nemadji Trail Energy Center, clean-energy portfolios may be as much as a penny per kilowatt less than the Nemadji Trail Energy Center, according to the study. That may not sound like much, but to large industrial users of Minnesota Power’s electricity, it is a very big deal. If a taconite plant were to use 300 kilowatt hours of electricity to produce one ton of taconite pellets, a penny less would save $3 per ton. The taconite industry inhabits a tough economic neighborhood and needs the economic advantage that clean-energy portfolios can provide.
In other words, we are being asked to support a natural-gas plant that will release millions of tons of carbon dioxide and be very exposed to carbon pricing while we pay more than we must.
Meanwhile, Minnesota Power is once again preparing to ask the Minnesota Public Utilities Commission to increase rates and shift costs from large industrial users to residential and commercial ratepayers in order to give a break to the large industrial users. A better approach would be to simply pursue clean-energy portfolios, which would drop everyone’s electricity costs.
As for reliability, the number of utilities jettisoning natural-gas plants or greatly de-emphasizing them without threatening reliability is growing. Utilities in Colorado, Arizona, Michigan, Indiana, Oregon, and Minnesota are either recognizing that natural-gas plants are no longer needed or are being told that by their state public utilities commissions.
Yet Minnesota Power’s defense of the Nemadji Trail Energy Center has included that the plant will enable renewable resources like wind and solar by providing reliable power when the “the wind doesn’t blow and the sun doesn’t shine.”
The evidence now suggests that we should put that regrettable phrase to bed.
In so many ways, Minnesota Power is a great company. It must be maddening to peer into the rapidly changing energy landscape and make decisions with decades of consequences.
However, the Nemadji Trail Energy Center is looking increasingly like a well-intended swing and a miss. It’s time for Minnesota Power to acknowledge that before economics and carbon pricing make the Nemadji Trail Energy Center a stranded asset that saddles the Northland with decades of unnecessary costs.
Dr. Eric Enberg practices family medicine in West Duluth and is group leader for the Duluth Citizens' Climate Lobby (citizensclimatelobby.org/chapters/MN_Duluth). He also is a member of the Duluth Climate and Environment Network.