Minnesota’s Moonshot, Part 2: Efficiency as a resource
In October, I shared preliminary thoughts about steps needed to hit Minnesota’s economy-wide deep decarbonization goal to reduce carbon emissions 80% by 2050. I call it “Minnesota’s Moonshot” because of the heightened intention, broad-based collaboration, intensive planning, and just plain hard work it’ll take to get us there.
Deep energy efficiency achievements are critical to getting us off the ground. Through energy efficiency, we reduce the amount of wasted energy in our economy so homeowners and businesses can put more of their money to more productive use, and so our utilities aren’t building unnecessary infrastructure just to serve that energy waste. Minnesota has a long, proud tradition when it comes to reducing energy waste.
In 2017, the American Council for an Energy Efficient Economy ranked Minnesota’s energy efficiency policies the 9th most effective in the nation — Minnesota was the only Midwestern state (and the only non-coastal state) making the top 10 in the ACEEE’s State Energy Efficiency Scorecard. Approximately 14% of Minnesota’s electricity needs are met by energy efficiency, about the same as wind energy and natural gas-fired generation. It’s important that we keep building on this terrific achievement.
Key to doing so will be the information we’ll gather through the Statewide Demand Side Potential Study that the Minnesota Department of Commerce engaged CEE to lead. This project will refresh our collective assessment of the attainable and cost-effective customer energy savings available to Minnesota electric and natural gas utilities, as well as how best to capture that potential through policy and programmatic solutions. Commerce has also funded a team to identify the potential for utility-system efficiency available in Minnesota. Both studies will be completed by the fall of 2018.
In addition, two key policies help guide utilities to reduce energy waste in Minnesota's economy:
Efficiency as the Preferred Resource: Minnesota has specified that energy efficiency is preferred above all other resources available to utilities, and the State requires efficiency to be “aggressively and systematically” procured. We need to do a better job integrating this requirement into electric utility resource plans, so our utilities are doing all the planning necessary to minimize energy waste.
Energy Efficiency Resource Standard: To help reinforce efficiency as our preferred resource, Minnesota requires each each natural gas and electric utility to achieve annual energy savings equal to 1.5% of their gross annual retail sales. Targeting is implemented through Minnesota's Conservation Improvement Program (CIP), and has resulted in flat to declining load growth for our electric utilities. A sign of Minnesota’s success in reducing energy waste cost-effectively is that the potential for growth in consumer demand for electricity has largely been met through energy efficiency, while the state’s gross domestic product continues to rise.
CIP is Minnesota’s most successful energy policy:
Since 2008, CIP has saved Minnesotans an estimated $3.8 billion on their energy bills, mostly through avoiding power plants and other infrastructure in which utilities haven’t needed to invest — and, consequently, that customers haven’t had to pay for.
CIP supports over 50,000 Minnesota jobs, which are located all over the state.
National consulting organization Cadmus Group found in 2015 that every $1 spent on CIP generated $4 in net benefits through job growth, economic growth, lower utility bills, and environmental benefits.
For a clean energy advocate like CEE — and for the state we call home — Minnesota’s energy efficiency policies are a terrific platform from which to launch the transformational activities needed to cut carbon 80% by 2050. At the same time, we will need to maintain reliable and affordable energy services for Minnesotans — that’s mission critical to landing this Minnesota moonshot. Being as energy efficient as possible will lower the cost of everything else we’ll need to do to meet this goal.
Obviously, reducing energy waste will not be sufficient to meet our deep decarbonization goals. Efficiency will need to be complemented by:
Continuing to decarbonize our electric supply through expanding our use of renewable energy like wind, solar, and hydropower; and
Strategically using that decarbonized energy source to power areas of Minnesota’s economy that are typically powered by more carbon-intensive fuels, where doing so saves energy, saves customers money, and reduces carbon emissions.
Return here for posts on both fronts in the coming weeks.
Minnesota’s Moonshot, Part 1: Getting to Deep Decarbonization (blog post)
MN Demand-side Potential Study
MN Supply-side Potential Study