Name: Minnesota's Great River Energy closing coal plant, switching to two-thirds wind power
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Minnesota's Great River Energy closing coal plant, switching to two-thirds wind power

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More from the HomepageCoal Creek Station in North Dakota is one of the largest coal electricity plants in the Upper Midwest.&nbsp;By Star TribunemoreCopy shortlink:Great River Energy will shutter its big North Dakota coal-fired power plant several years early, an extraordinary move that underscores the waning cost-competitiveness of coal in electricity production.The Maple Grove-based company Thursday announced the closure of Coal Creek Station — one of the Upper Midwest’s largest power plants — in the second half of 2022. It will be replaced to a great extent with new wind farms, including four in Minnesota.The plant, which supplies power to hundreds of thousands of Minnesotans, has historically been a low-cost electricity producer — it’s adjacent to a coal mine, a big competitive edge. But due to dramatic changes in electricity markets in recent years, Coal Creek is losing money.“The real driver for this decision is economics,” said David Saggau, CEO of Great River, a nonprofit wholesale cooperative owned by 28 retail electricity co-ops, most of them in Minnesota.When the transformation is complete, Great River expects that two-thirds of its electricity will come from wind turbines. Much of the rest will come through purchases in the regional wholesale electricity market.U.S. coal plants are becoming increasingly uneconomic because of the rise of gas-fired power and renewable energy. Those developments, combined with coal’s environmental liabilities, are prompting more early plant closures.Xcel Energy plans to shutter all four of its Minnesota coal plants between 2023 and 2030.But no Upper Midwest utility has moved as quickly to reduce carbon emissions as Great River with the 2022 closing of Coal Creek, said Michael Noble, executive director of St. Paul-based Fresh Energy, a clean-energy research and advocacy.For Great River, closing Coal Creek “is a big development — a big shift — and it is going to serve our membership well for decades,” Saggau said. “But it is bittersweet as well.”The 40-year-old plant in the central North Dakota town of Underwood is a bastion of the regional economy.Coal Creek employs 260 and the adjacent Falkirk mine — owned by an independent coal company — has more than 400 workers. Those are some of the best-paying jobs in the region and the power plant is a big part of McLean County’s tax base.After Coal Creek is closed, Great River will voluntarily continue to make local tax payments for five years — $15 million in all, Saggau said.Great River plans to eventually demolish the plant. “We have discussed basically giving the plant away, but basically we had no takers,” Saggau said. Potential buyers see the same economic problems as Great River has experienced, he added.With Coal Creek’s shutdown, Great River is likely to be a leading U.S. renewable power supplier, at least in terms of share of total electricity generated by wind. Great River said its carbon dioxide emissions will fall by 95% from the Minnesota benchmark year of 2005.“That is not a driver of [closing Coal Creek], but it is a significant side benefit,” Saggau said.Great River is Minnesota’s second-largest electricity supplier after Xcel Energy, providing power to around 700,000 customers. The company’s largest owner-members are Connexus Energy and Dakota Electric, which respectively serve parts of the northern and southern Twin Cities metro area.Great River’s 28 member-owners will yield substantial economic benefits from the company’s exodus from coal, Saggau said. The wholesale rates they pay should be flat until 2023, but then fall by 13%, he said. That includes continued deprecation costs for Coal Creek.In addition to closing Coal Creek, Great River will convert its other coal-fired plant in Spiritwood, N.D., to natural gas. Spiritwood Station has only 9% of the 1,151 megawatt generating capacity of Coal Creek.A historic surge in natural gas production in North Dakota and other U.S. shale-oil states is a key reason for coal power’s woes. The abundance of gas has depressed gas prices, which has in turn has driven fundamental changes in wholesale electricity markets.Regional electric-grid operators match buyers and sellers of wholesale power, and the order of dispatch is determined by fuel cost.Solar and wind are free, so they get dispatched first. The number of wind farms has soared in the wind-rich Upper Midwest over the past decade, boosted by federal tax subsidies and falling equipment costs.At the same time, natural-gas-fired plants have increasingly displaced coal power since they are cheaper to operate. Natural gas also emits roughly half as much carbon dioxide as coal.“The marketplace simply doesn’t value [Coal Creek] like it used to,” Saggau said. “There are other options — other fuels — that are cheaper.”Coal accounts for at least 50% of Great Energy’s electricity generation, while renewables — mostly wind — make up around 25%. That should rise to 30% this year with the recent opening of a new North Dakota wind farm.Great River said Thursday it will add 1,100 megawatts of wind power to its current 660 megawatts, a $1.2 billion investment. The new wind generation will be added by the close of 2023. Great River will purchase that power through long-term contracts with wind farm developers.A key question: How will Great River provide enough “baseload” power to retain the reliability of its system?Wind and solar power, of course, is variable depending on when sun shines and the wind blows. Fossil fuel and nuclear plants can provide continuous electricity.Great River executives said the company’s gas-fired power generators — the four largest of which have nearly 1,300 megawatts of capacity — will be its anchor. Great River plans to upgrade the plants, which supply power during times of peak demand, and expand their capacity somewhat.“We have a very robust fleet of gas plants and these plants will provide the bedrock reliability needed to serve our membership,” said Jon Brekke, Great River’s chief power supply officer. Wholesale power purchases will round out reliability, he said.Great River Thursday also announced a pilot program for a new power-storage technology, which would warehouse electricity for considerably longer than current grid batteries. Batteries with long-term storage capacity are important to the long-term growth of renewable energy.Storage technology developed by Massachusetts-based Form Energy could deliver power for 150 hours, compared to the four hours common in lithium-ion grid batteries.Great River said it’s working with Form Energy on a 1-megawatt battery that would be completed in late 2023 and located in Cambridge, Minn.More from Star TribuneMore from Star TribuneMore from Star TribuneMore from Star TribuneMore from Star TribuneMore from Star TribuneMore from Star TribuneMore from Star TribuneMore From Star TribuneMore From Star TribuneMore From BusinessRelated CoverageMost Read© 2022 StarTribune. All rights reserved.

More from the HomepageCoal Creek Station in North Dakota is one of the largest coal electricity plants in the Upper Midwest.&nbsp;By Star TribunemoreCopy shortlink:Great River Energy will shutter its big North Dakota coal-fired power plant several years early, an extraordinary move that underscores the waning cost-competitiveness of coal in electricity production.The Maple Grove-based company Thursday announced the closure of Coal Creek Station — one of the Upper Midwest’s largest power plants — in the second half of 2022. It will be replaced to a great extent with new wind farms, including...

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Minnesota's Great River Energy closing coal plant, switching to two-thirds wind power

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