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Minnesota natural gas power plant Minnesota Power
Minnesota Power and Dairyland Power Cooperative have proposed a $700 million natural gas power plant, Nemadji Trail Energy Center, which would be located near the Calumet refinery in Superior and provide up to 550 MW of power.

Minnesota Power and Dairyland Power Cooperative Pursue Renewables-Enabling Gas-Fired Power Plant

Minnesota Power and Dairyland Power Cooperative have proposed $700 million natural gas power plant in coordination with renewable generation optimization

Minnesota Power and Dairyland Power Cooperative are jointly planning a 550-MW natural gas power plant whose flexible dispatch will help optimize wind and solar facility dispatch.

The $700 million facility, the Nemadji Trail Energy Center, will be jointly owned by Minnesota Power and Dairyland Power Cooperative and will be located in Superior, Wisconsin. Once constructed, its ongoing operation will involve about 25 full-time employees.

According to a June 7, 2017, report by Brooks Johnson of the Duluth News Tribune, the city of Superior calls the plant “one of the single largest private investments in the area’s history.” During construction, about 260 workers will be employed in the area.

The transition away from coal has been dramatic for Minnesota power, which was relying on coal for 95% of its capacity as recently as 10 years ago. The utility is facing additional coal plant retirements, including a total of more than 280 MW in plant retirement plans involving four facilities, ranging between 68 MW and 79 MW per unit (Boswell units 1 and 2, and Taconite Harbor units 1 and 2, in the 2020 to 2022 time frame.).  

In parallel with the addition of the gas facility and new renewable facilities, Minnesota Power has also sought to increase its energy-efficiency and demand-response programs’ targets.

If the gas facility is approved by regulators, the resource package coupled with the company’s existing renewable resources will result in renewable resources providing 44% of the company’s energy supply by 2025, further reducing carbon emissions while keeping rates affordable.

Minnesota Power will request regulatory approval for the addition of 250 MW of wind power capacity, an additional 10 MW of solar power and 250 MW of combined-cycle natural gas generation to meet customer demand for power, which is projected to grow throughout the region. The new resources will increase the company’s already robust wind portfolio of 620 MW and double its solar generation.

The renewable additions involve the following:

Wind. Minnesota Power conducted a robust competitive process as part of its 2015 Integrated Resource Plan. An independent, third-party evaluator reviewed the bids and recommended a 250-MW, 20-year purchase power agreement (PPA) with independent power producer Tenaska, to be located in southwestern Minnesota. In addition to providing the lowest overall cost among the wind farm bids, Tenaska’s Nobles 2 Power Partners wind farm will offer greater geographic diversity among Minnesota Power’s wind resources and a highly efficient wind resource. Minnesota Power has an option to purchase the wind farm after 10 years of production.

Solar. To achieve the state’s solar requirements, the Minnesota Power package proposes to add 10 MW of solar power by 2020 through a 25-year PPA with Cypress Creek Renewables. The addition will complement the current 10-MW Camp Ripley project that was completed last year and will be placed within Minnesota Power’s distribution system near Royalton in central Minnesota. The agreement includes an option for Minnesota Power to purchase the array.

As part of this program, which Minnesota Power has had in place for four years, dubbed EnergyForward, the company “has been exceeding expectations for how an energy company can transform the way it produces and delivers energy,” said Brad Oachs, president of regulated operations. “We look forward to working with our customers and regulators to continue down the path toward a safe, reliable, cleaner and affordable energy future.”

With approval of the proposed resource package by the Minnesota PUC, renewable energy resources — including wind, Canadian hydro, solar and biomass — will account for 44% of the utility’s energy supply portfolio, exceeding the initial EnergyForward goal of one-third renewable power.

Natural gas is an essential component of the resource package to be filed with regulators. Without this plant, Minnesota Power would be reliant on fluctuating wholesale market prices when sun and wind resources aren’t available, increasing overall costs over the long run.

“Through a unique partnership with Dairyland Power Cooperative and access to a competitive natural gas supply, this approximately $350 million investment will further balance Minnesota Power’s energy mix while contributing meaningful growth for ALLETE’s shareholders,” said Al Hodnik, ALLETE chairman, president and CEO. “Minnesota Power’s EnergyForward investments and industrial load prospects complement nicely the nexus of energy and water growth initiatives already announced and additional opportunities being pursued by ALLETE Clean Energy and U.S. Water.”

After input from stakeholders and the public, a final determination is expected in the latter half of 2018.

“We believe this resource package is the best way to meet changing customer expectations for clean energy while preserving safe, affordable and reliable supplies of energy for the customers who depend on us to power homes, schools, hospitals and the natural resource based industry that fuels our region’s economy,” Oachs said. ♦



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