Analysis Highlights Energy Storage’s Key Role in Minnesota’s Power Sector

Through our analysis at Strategen Consulting in formulating this report, we found that solar plus storage could be a viable alternative to natural gas peaker plants today and an even more cost effective method going forward.
— Edward Burgess, Senior Manager, Strategen Consulting

Energy storage paired with solar found to be more cost effective in Minnesota today than gas peaking plants

Stakeholders within Minnesota’s power sector today unveiled a new analysis finding that energy storage can be part of Minnesota’s least-cost path forward for future energy resource investments, and can help the state meet its goals to be a leader in renewable energy and in reducing greenhouse gas emissions. Lessons learned could also be applied to other Midwest states that are in the Midcontinent Independent System Operator (MISO) footprint.

The report, “Modernizing Minnesota’s Grid: An Economic Analysis of Energy Storage Opportunities,” is the result of months-long analysis led by the Energy Transition Lab (ETL) at the University of Minnesota’s Institute on the Environment, and offers a statewide strategy for energy storage deployment. 

ETL convened a broad cross-section of more than 60 key stakeholders, including representatives from utilities, energy technology companies, nonprofits and government, in two Energy Storage Strategy Workshops to assess the opportunities for energy storage in Minnesota and at MISO. The primary objective of this effort was to explore how energy storage could be used to help Minnesota achieve its energy policy objectives, and enable greater system efficiency, resiliency and affordability. Project collaborators Strategen Consulting and Vibrant Clean Energy conducted the modeling for this analysis, with input from MISO.

The key finding from these workshops is that deploying storage plus solar facilities in Minnesota could already be more cost effective today, compared with gas peaking plants, when environmental benefits are considered. The analysis also shows that standalone storage will be able to compete with and displace new gas combustion turbines installed to meet peak demand — becoming more cost effective than a simple cycle gas-fired peaking plant for meeting Minnesota’s capacity needs beyond 2022.

“Energy storage is a linchpin for Minnesota: It has the potential to reduce our system costs, increase reliability and even decrease greenhouses gas emissions in our broader coal-dependent region,” said Ellen Anderson, director of the Energy Transition Lab. “While the federal government questions the reliability of renewable energy, states like Minnesota are stepping up to show it’s possible to connect renewables and storage to reduce both costs and greenhouse gas emissions while maintaining a reliable grid.”

Connexus, Minnesota’s largest distribution cooperative, was a participant in the workshops, and is currently pursuing procurement of a 20 MW, 40 MWh energy storage system. It will be one of largest storage projects of its kind in the Midwest. Responses to its Request for Proposals have been encouraging, with prices more competitive than anticipated.

“We have been assessing energy storage to understand its potential benefits to our distribution system and members. Just like solar PV, with continuing drop in storage pricing, it is now becoming cost effective in specific applications,” said Brian Burandt, Vice President of Power Supply and Business Development at Connexus.

“While we expect broad applications will be enabled with ongoing cost reductions and performance enhancements, we believe the technology is ready today for application on our system. That will save our member-owners and Minnesotans on electric costs, but in tandem, facilitate renewable energy growth to reduce greenhouse gas emissions.”

The energy storage planning process was spearheaded by ETL and the Minnesota Energy Storage Alliance (MESA), with support from the Energy Foundation, the McKnight Foundation, the Minneapolis Foundation, the Carolyn Foundation, AES Energy Storage, General Electric, Next Era Energy Resources, Mortenson Construction, Great River Energy and Strategen Consulting.