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Minnesota is a clean energy leader. With over twenty percent of the state’s energy needs met by renewable energy, the state is leading the way in new clean energy generation.
But there’s more work to be done.
Minnesota’s electricity generation is still more carbon-intensive than the U.S. average. The state was an early adopter of many renewable energy and energy efficiency policies, but now many states are recognizing the value of these policies in catalyzing economic development. To stay competitive, Minnesota must continue to support policies that will enable it to maintain its leadership on the road towards a low carbon economy.
Minnesota’s clean energy leadership presents investors such as Impax which focus on this area and on climate solutions, with exciting opportunities for growth and investment. Minnesota is working towards meeting its 25 percent renewable energy standard, and will likely hit the target years ahead of schedule. But new analysis from Bloomberg New Energy Finance finds that Minnesota has even more untapped renewable energy capacity.
Because of robust renewable energy and energy efficiency policies, Minnesota’s utilities are also leading the nation in clean energy investments. Wind energy is already one of the cheapest forms of electricity throughout the state, and solar is not far behind. Recent extensions of the federal production and investment tax credits will continue to keep their prices low and help spur additional investment through the early 2020’s.
Minnesota’s 1.5 percent energy efficiency resource standard compounds annually— and helped the state secure the 10th spot on this year’s energy efficiency scorecard. Companies are also confronting the challenges of climate change, leading to innovation throughout the state. Minnesota ranks twelfth in the country for registered patents in energy efficiency. Minnesota-based companies including 3M and Donaldson are developing the latest in energy solutions—saving consumers energy and cutting costs.
Some of Minnesota’s premier Fortune 500 companies are also leading the charge to use energy more efficiently and transition to clean energy. For example, General Mills recently announced a commitment to reduce carbon emissions by 28 percent over the next decade and invest $100 million in renewable energy and energy efficiency for its facilities. Ecolab was an early subscriber to Xcel’s new community solar program, citing the opportunity to lock in a fixed energy price over 25-years. Minneapolis-based and family-owned Mortenson Construction is partnering with SunShare to serve as the engineering contractor for a number of solar gardens throughout the state. Mortenson has a record of leadership in renewable energy construction. Since 1995, they’ve constructed more than 15,000 MW of wind power. The clean energy economy has many of its roots in Minnesota.
We know this trend is only going to continue. Xcel Energy recently announced a new proposal to offer large customers the option of signing long-term energy contracts for renewable energy. The program, called Renewable Connect, is under review with the utility commission and would allow voluntary corporate buyers to secure clean energy through the utility, lock in fixed energy prices, and add new renewable energy resources to the grid. The utility commission should approve it. It’s in the best interests of Minnesota businesses, Minnesota workers, and Minnesota’s environment.
Minnesota’s clean energy economy supports over 15,000 jobs and has attracted nearly $11 billion in investment from the private sector. Strong clean energy policies were key in spurring this growth and will be essential in ensuring that Minnesota continues to lead and attract investment. Minnesota must continue to support policies that point to a low carbon economy in order to stay competitive.
Taken together, Minnesota’s commitments to innovation and strong clean energy initiatives create a recipe for success. If lawmakers continue to send these crucial signals to the private sector, Minnesotans will be sure to reap the rewards.
Ken Locklin is the Director of Impax Asset Management, a global investment firm with $4.4 billion in assets currently under management or advice. Impax Asset Management is a member of the Investor Network on Climate Risk.