The Clean Power Plan sets the nation's first-ever limits on carbon dioxide (CO2) emissions—the primary contributor to global warming—from power plants.
Each state is assigned its own goal, and Minnesota is required to reduce its emissions by 11.7 million tons, or 34 percent below 2012 levels, by 2030. The Land of 10,000 Lakes is well positioned to meet this target, given its current shift away from coal generation and growing investments in renewable energy and energy efficiency.
Widespread economic and health benefits
New analysis shows that an energy transition based on strong renewable energy and energy efficiency policies, together with a vigorous carbon emissions trading program, would constitute a cost-effective pathway, or "Clean Path Case," for Minnesota.
This course toward a clean energy future will:
- Yield more than 4,500 megawatts (MW) of new wind and solar capacity in Minnesota by 2030, which could stimulate more than $4.6 billion in new capital investments
- Reduce overall expenditures on electricity in every year through 2030, saving Minnesota $745 million between 2016 and 2030
- Lower the typical Minnesota household’s electricity bill by 7 percent in 2030 compared with a Reference Case, or an annual savings of more than $50
- Generate $205 million in average annual revenue during the 2022 to 2030 period from the sale of carbon allowances
- Prompt the investment of more than $1 billion in energy efficiency improvements beyond the current energy efficiency resource standard (EERS)
- Provide some $111 million in public health and economic benefits between 2022 and 2030 through reduced emissions of CO2, sulfur dioxide (SO2), and nitrogen oxides (NOx) pollution
Recommendations for securing a clean energy future
Achieving the Clean Path Case’s full range of benefits will require policy makers and regulators to work together with utilities, generators, advocates, regional transmission organizations, and other stakeholders to develop a Clean Power Plan (CPP) compliance plan that generates widespread benefits for all Minnesotans.
- The Minnesota Pollution Control Agency (MPCA) should consider a strong mass-based CPP compliance plan. In building this plan, the MPCA should prioritize renewable energy and energy efficiency, and it should strongly consider developing a mass-based emissions trading program that includes both new and existing sources and allows for interstate trading of carbon allowances.
- The MPCA, Minnesota Public Utilities Commission, and Minnesota Department of Commerce should continue to coordinate closely with the Midcontinent Independent System Operator (which coordinates the movement of electricity across 15 states in the Midwest and South) in order to ensure cost-effective market and transmission solutions that facilitate CPP compliance.
- The Minnesota legislature should enact strong clean energy and carbon-market policies. The legislature should extend and expand its current renewable energy standard, which is set to level off at approximately 28 percent in 2025; and it should increase Minnesota’s current energy efficiency resource standard to specify annual savings equal to 2 percent of electricity demand for all Minnesota utilities.
- The Minnesota legislature should authorize the state to auction carbon allowances as part of the emissionstrading program developed by the MPCA. Revenues thus generated should be directed toward programs that benefit all residents, reduce carbon emissions, and promote equitable approaches to transitioning to a low-carbon economy.
With well-designed policies and careful planning and coordination, Minnesota could greatly enhance its clean energy resources, cost-effectively exceed the emissions reductions required by the Clean Power Plan, and reap important economic and public health benefits.
These benefits would help ensure a sound and prosperous future for all Minnesotans.