St. Anthony: Minnesota company tackling climate change as an environmental challenge and economic opportunity
Renewable energy is proving as much an economic driver in Minnesota as it is a critical environmental pursuit. And even oil and gas producers who ship products to Minnesota and the massive Pine Bend refinery in Rosemount are reducing their carbon emissions.
NextEra Energy Resources, the nation’s largest wind developer, is building six wind farms to supply power to Great River, Xcel and other power buyers. A University of Minnesota study concludes that the company’s projects will provide $1.8 billion in economic benefits over 30 years, including up to 3,500 construction and other jobs.
“We have six projects in advanced or licensed development and hope to have all built by 2024,” said David Gil, executive director of development for the Midwest.
NextEra has previously invested around $500 million in three wind farms and solar projects. The other six also mean $250 million in state and local taxes over 30 years.
Another sign of the industry’s worth? Quanta Services of Texas bought Blattner, the massive Central Minnesota-based construction company specializing in wind energy, in the fall for $2.7 billion.
Quanta, an electrical contractor, said it was looking for a fast-growing renewable partner to help it “collaborate with our customers to shape North America’s energy transition to a carbon-neutral economy.”
Blattner CEO Scott Blattner declined to comment last week, but has said in the past that the company needs a bigger partner with capital. The once-struggling Blattner has done well with a 20-year focus on renewables. In 2020, Blattner posted operating profit of $291 million on revenue of $2.4 billion, according to public company Quanta.
Businesses as well as environmental advocates argue that we need to accelerate investment to meet carbon reduction targets and mitigate environmental damage from growing climate disasters.
“Businesses are looking for energy efficiency and clean energy to save money, mitigate risk and meet consumer demand,” said Gregg Mast, executive director of the Clean Energy Economy Minnesota business coalition. “Two-thirds of S&P 500 companies have set targets to reduce greenhouse gas emissions. Minnesota-based companies such as 3M, Ecolab, General Mills and Target buy large amounts of low-cost wind and solar energy cost to help them achieve their goals of 100% renewable electricity.”
Dan Juhl, 71, a state wind power veteran since the late 1970s, sold several of his larger wind projects to ConEdison to focus on smaller wind-solar hybrid projects in rural Minnesota. . For years, Juhl subsidized his incubating wind business by playing in rock bands.
“It feels good,” Juhl said of the economic growth of renewables. “When I started, the biggest windmill I could buy was about as big as the span of my arm. We had to work on the [government] politics, technology, computerization and economies of scale.
“Now solar drives our summer peak generation and wind drives winter peak generation. Minnesota was importing all of our energy. The environment gets a free ride because [wind and solar] are so much cheaper than fossil fuels. Everyone jump on board.”
The cost of scaling up wind and solar systems has fallen by up to 90% since 2010.
Additionally, the push toward renewable energy in Minnesota has created nearly 60,000 well-paying jobs, minus a jolt in 2020 due to the pandemic, according to last year’s Clean Jobs Midwest report. The growth rate was double that of the entire state labor market, and Mast projects 100,000 workers by 2030.
Additionally, there is growing corporate acceptance, backed by growing public sentiment, that the economy needs to be powered by a low-carbon engine.
The Deloitte Economics Institute reported in January that inaction on climate change could cost the US economy $14.5 trillion by 2070. Conversely, the report concluded that the US would gain $3 trillion if it opted to carbon reduction actions over the next 50 years.
“The analysis shows that the fight to slow climate change is not just an ambitious goal, but an economic imperative for the United States,” said Alicia Rose, deputy managing director of Deloitte US.
Carbon-free electricity, including renewables and nuclear power, generated 55% of Minnesota’s electricity in 2020, up from 48% in 2019, according to the US Energy Information Agency.
Here’s the breakdown: renewable energy production has grown from less than 10% in 2005 to 29% in 2020; natural gas from 5 to 20%; and nuclear from 24 to 26%. Coal power decreased from 62 to 25%. Nuclear went from 24 to 26%.
Minnesota regulators just approved Xcel Energy’s long-term plans, including increasing renewable energy and other alternatives. The utility plans to reduce carbon dioxide, the main contributor to greenhouse gases that drive climate change, to zero by 2050.
With energy projects completed, between 2005 and 2018, Minnesota reduced its oil and coal imports as it increased renewable energy from 7 to 16 percent of total energy consumption. Cleaner-burning natural gas has increased from 20 percent to 27 percent, according to the Minnesota Department of Commerce. These trends are accelerating.
Minnesota’s Ethanol Industry, a fuel supplement that also makes other products, represents 22,800 jobs and $6.1 billion in economic activity, according to the Minnesota Biofuels Association and a 2020 study from the University of Minnesota.
“Companies are merging the ideas of reducing carbon emissions with job growth,” said Minnesota Commerce Commissioner Grace Arnold.
Still, Minnesota is falling short of its goal of reducing global warming emissions by 30% from 2005 levels by 2025.
Transport and buildings now emerge as the biggest users of carbon-based energy and are a significant opportunity.
In 2021, electric car sales more than doubled to 6.6 million, or nearly 9% of the global market, according to the International Energy Agency and Electrek.com. Europe and China led with 16% and 14%, respectively, followed by the United States at 4.5%. Minnesota accounted for 1% of electric vehicle sales in 2020, according to the Metropolitan Council.
Minnesota, with cold winters and hot summers, consumes about 40% of total energy for commercial buildings and homes, according to Commerce.
The environmental challenge also presents an economic opportunity through renovations and next-generation building controls, sold by companies such as 75F.
Governor Tim Walz has offered $900 million over the next two fiscal years to address climate change, including to attract matching federal funds and more private investment.
“The clean energy economy saves Minnesotans money, grows businesses…and makes Minnesota a healthier, safer place.” Walz said in a statement. “It’s time to act.”
A 2020 study by energy researcher Cadmus estimated the net economic impacts of Minnesota’s conservation return on investment at $3.75 for every dollar invested between 2013 and 2018. This includes 48,000 added local jobs and $11 billion in related economic activity.