So many wind generators have sprouted in Minnesota in recent times that energy traces cannot deal with all of them — and a few rural counties are paying the worth.
Wind generators in elements of southern Minnesota are extra generally being shut off periodically due to transmission congestion. Wind farm taxes are key income sources for counties, and cash solely flows when the generators are turning.
The 18 counties in Minnesota’s wind belt reported a 14% drop in wind tax income in 2021, in contrast with the earlier 12 months. Hit hardest: Jackson and Murray counties, wind vitality powerhouses that had declines of 21% and 34%, respectively.
“It is going to change our price range,” mentioned Dennis Welgraven, a Murray County commissioner. “It will not imply reducing providers, but it surely might imply laying aside tasks.”
A transmission shortfall has been constructing throughout the Midwest as extra renewable vitality comes on-line, with congestion acute in southern Minnesota. Curtailment — when generators are shut off once they might be spinning — has at all times been a small issue, however in some counties it has turn into a a lot greater difficulty.
“Southern Minnesota and our area doesn’t have sufficient transmission capability,” Joe Sullivan, a Minnesota Public Utilities Fee member mentioned at a public assembly this spring.
“Essentially, there may be bottleneck,” he informed the Rural Minnesota Vitality Board, which represents 18 southwest and southern Minnesota counties. “The pipes will not be large enough anymore to get our product to market.”
Gene Metz, a Nobles County commissioner lengthy concerned with the agricultural vitality board, mentioned in an interview that the issue might be “very costly to unravel. We’re speaking billions of {dollars}.”
The answer is extra energy traces. However they take 4 or 5 years to get permitted and in-built the very best case state of affairs. And ultimately electrical energy customers pay the tab.
Wind growth means extra tax income
Minnesota is likely one of the nation’s prime 10 producers of wind energy, and rural areas have notably reaped the advantages.
Annual wind energy manufacturing tax collections rose from $1.9 million in 2006 to $14.1 million in 2021, in response to the Minnesota Division of Income. Final 12 months’s income elevated by lower than 1%, and a few counties noticed a decline.
By state regulation, wind farms are taxed on vitality manufacturing, and 80% of the cash flows to counties, with the remaining going to cities and townships that host the amenities.
“So far as jobs and taxes, wind has been nice,” mentioned Mike Kluis, a farmer and supervisor for Fenton Township in Murray County.
Fenton Township’s wind tax collections, which account for about two-thirds of the township’s income, fell 54% final 12 months.
Murray County, house to Fenton, usually funds about 5% of its price range with wind income — and the business is vital sufficient to the agriculture-based county that its official emblem prominently includes a turbine.
A lot of final 12 months’s tax shortfall stemmed from curtailment at Fenton Wind Farm, which is run by EDF Renewables and sells its electrical energy to Xcel Vitality.
Like most wind farms, Fenton was constructed with federal manufacturing tax credit, which final 10 years. Fenton’s credit have run out, so the farm and others with expired credit normally are shut off first when energy traces are congested. It is easy grid economics.
Midwest energy producers — whether or not wind farms or fossil-fuel vegetation — bid right into a wholesale electrical energy market run by the Mid-Continent Impartial System Operator (MISO). A nonprofit, MISO operates the grid in Minnesota and all or elements of 14 different states.
Wind farms’ gasoline value is zero, so their energy is especially cheap. However energy produced from farms with no tax credit prices extra. “In impact, it results in wind-on-wind competitors,” mentioned Brian Tulloh, MISO’s north area exterior affairs director.
Wind farms with tax credit might be curtailed, too, in the event that they’re close to congested grid factors.
State of affairs places wind farms in competitors
The ability line downside vexes Murray County commissioner Welgraven.
“There’s simply not sufficient energy traces to get the facility out, but they hold placing up extra wind generators,” he mentioned.
Walgraven and Fenton Township supervisors level to the Nobles 2 wind farm, which began up in late 2020 to provide electrical energy to Minnesota Energy. It has tax credit and longer blades that scoop up extra wind vitality than the shorter blades at Fenton.
Fenton Township Chairman Dave Swart can see Nobles 2 from his farm: Its generators appear to segue into Fenton’s generators on the horizon. With winds blowing at 25 miles per hour on a latest day, Nobles 2’s generators have been spinning. No less than half of Fenton’s weren’t.
“Why would you place up one other wind park when you do not have the transmission?” Swart mentioned.
The large drop within the Fenton facility’s output final 12 months — and Murray County’s and Fenton Township’s wind tax income — coincided with an 18% surge in 2021 wind income for Nobles County, courtesy of Nobles 2. Metz, the Nobles County commissioner, famous that earlier than Nobles 2 began working, his county’s wind tax revenues had been declining as curtailment elevated.
2010s noticed large build-out
Giant wind and photo voltaic farms in Minnesota should be accepted by the PUC. To connect with the grid, they want clearance from MISO.
There was a “little bit of a land rush” within the late 2010s to get new wind tasks onto the MISO grid, Tulloh mentioned. A MISO-wide transmission build-out that started within the earlier decade had freed up new energy line capability.
Then, within the 2010s, costs for wind generators sank whereas expertise improved. And energy firms rushed to seize federal tax credit earlier than they have been decreased by decade’s finish.
Minneapolis-based Xcel, one of many nation’s largest wind energy utilities, has been on a wind farm spree in recent times.
“We now have added a big quantity of wind, as have others, making the most of federal tax credit and nice pricing from wind distributors,” mentioned Christopher Clark, Xcel’s president for Minnesota and the Dakotas. “It’s actually serving to us make the clear vitality transition.”
Nonetheless, wind turbine curtailment is not good for Xcel’s clear vitality targets — or its prospects. When energy line congestion shuts down wind farms, the misplaced electrical energy might be supplanted by gas-generated energy, which is dirtier and costlier.
Expanded grid comes with value
In July, MISO’s board will vote whether or not to approve 18 new energy line tasks for the Midwest, which ought to assist treatment congestion woes. The associated fee: $10.3 billion, together with $2.2 billion for 3 traces in Minnesota, all to be constructed and owned by energy firms.
New transmission traces, which additionally should be accepted in Minnesota by the PUC, usually take 4 to 5 years to get permitted and constructed if no obstacles floor. However energy traces are usually traditional not-in-my-backyard affairs, typically spurring opposition from landowners and environmental teams.
Within the short-term, MISO, the PUC and transmission homeowners are engaged on fixes that may improve energy working by present traces.
A method is by reconfiguring energy flows in order that traces function extra effectively. One other is utilizing new expertise or making minor upgrades to extend energy line “scores.”
Primarily based on engineering ideas, transmission homeowners set scores on how a lot electrical energy can movement by their traces, regardless that at instances — for instance, when it is colder or the wind is blowing — these traces can deal with extra juice.
Xcel, a significant energy line proprietor, not too long ago accomplished a pilot program utilizing new applied sciences that account for climate. The corporate discovered that on common they elevated transmission capability by 10% to fifteen%.
“We’re constructing this expertise into our [power line] requirements,” Clark mentioned.
Nonetheless, new line scores and reconfigurations have limits. Energy line homeowners can add threat by pushing by extra energy, mentioned MISO’s Tulloh, with further put on and tear on gear.
“The [electric] system advantages, however there’s a probability the transmission supplier doesn’t,” he mentioned.
