Minnesota’s first solar-storage project nears completion in Grand Rapids

This story first appeared in Energy News Network.

After six years of debate, northern Minnesota’s first solar energy and battery storage project may soon reach completion in Grand Rapids.

The $6 million project by Grand Rapids Public Utilities combines a 2-megawatt solar array with a 1-megawatt, 2.5-hour lithium-ion energy storage battery in a project built and operated by US Solar. It will be the largest solar installation operated by a municipal utility in Minnesota and the first to have a battery storage component. Testing has begun on the solar array while the battery remains in transit, expected next month after supply chain delays.

The 15-acre, pollinator-friendly site near the local airport will supply around 8% of the power Grand Rapid needs. The city will receive more than $500,000 over 25 years in tax and land lease payments from the project. Minnesota-based companies supplied both the solar panels and the battery storage technology.

The project took a winding road to completion that eventually involved Minnesota Power, the utility’s electricity wholesaler. Even today, Minnesota Power’s involvement raises the ire of initial backers who did not like how the utility took over the project.

The idea began with the Itasca Clean Energy Team, a group of local renewable energy enthusiasts who first began encouraging Grand Rapids Public Utilities in 2016 to develop a community solar garden. Later, the group collaborated with the Grand Rapids Public Utilities Commission to hire Cliburn and Associates to study different approaches. Solar became more financially viable when teamed with battery storage.

Grand Rapids Public Utilities asked for bids in late 2018. Minnesota Power then threatened Grand Rapids with a lawsuit for allegedly violating its electric service agreement. However, Julie Kennedy, the utility’s general manager, decided to work with Minnesota Power rather than face it in court and the much larger utility then hired Cliburn and Associates for its own study. Last year the Grand Rapids Public Utilities Commission approved the project in a unanimous vote.

The storage element is a key to helping Grand Rapids reduce expensive peak demand charges that utilities generally levy as people return from work, on hot summer days and other times of grid stress. The panels will generate electricity during the day that can be stored and used later when demand grows.

The lithium-ion battery, built by Minnesota-based Ziegler CAT, releases power over a two-and-a-half-hour period, she said, a bit faster than the four-hour peak demand Grand Rapids generally sees. Kennedy said that Sandia Labs and Minnesota Power helped Grand Rapids model solar output, battery storage, and peak demand. As a result, the utility will save around $15,000 a month in on-demand charges it would have to pay to Minnesota Power.

Kennedy said Minnesota Power’s involvement changed the project in several ways. First, the utility used its preferred contractor, US Solar, to build the solar-storage project. Second, Grand Rapids allowed Minnesota Power to develop a power purchase agreement with US Solar and operate the battery instead of the original plan to manage the project itself.

Minnesota Power buys electricity from the US Solar and then sells it back to Grand Rapids. “It’s an odd arrangement,” she said. But Minnesota Power brought technical expertise and the ability to finance a larger project while taking advantage of federal tax credits unavailable to a nonprofit municipally owned utility, Kennedy said.

Julie Pierce, Minnesota Power’s vice president of strategy and planning, said the project evolved into a collaboration that allowed the utility to bring in energy project development and technical expertise. “We were able to bring that synergy together along with their community’s vision for wanting this type of project in their area,” she said.

Minnesota Power’s involvement came from a desire to learn more about how battery storage technology works as it transitions using cleaner energy sources, she said. The company generates half its electricity from wind, hydro, and solar power and wants to reach 100% clean energy by 2050. Battery storage, Pierce said, will have a significant near-term role for Minnesota Power and other utilities looking to reduce fossil fuel generation.

Battery storage adds intricacies to projects that both utilities are just beginning to understand, and Grand Rapids will be a pilot of sorts for Minnesota Power. So far, the project has not engendered much interest from other municipal utilities or cooperatives that buy electricity from the company, Pierce said, though that could change.

She characterized the project as “a fantastic collaboration with Grand Rapids Public Utilities” that brought “to fruition a really exciting project here for the region.”

Several groups advocated for the project, including the Sierra Club, Earth Circle and the Itasca Clean Energy Team. The University of Minnesota provided battery research along with support for Minnesota Interfaith Power & Light.

Retired Department of Natural Resources forester Bill Schnell, who led the Itasca Clean Energy Team, said the project became twice as large as his organization originally envisioned. “I’ll give Minnesota Power some of the credit for that,” he said. Still, Minnesota Power’s involvement dragged the process out by at least two years and its intrusion into the project still irks him.

Even near the end of the project, a struggle over technical issues between the utilities nearly killed the project, Schnell said. However, after the utilities reached an agreement, work continued. “If we had been done on our original schedule, we would have had this built and running before COVID hit,” Schnell said. “We wouldn’t have had any of these issues and the community would already be benefiting from solar power. But on balance, I’m just still happy to see it finally come to fruition.”

Rick Blake, a Grand Rapids City Council member who sits on the Grand Rapids utility commission, said the solar-storage project overcame several hurdles in the initial planning stages. Some Grand Rapids customers expressed fear that rates would increase because of the investment in solar. The first proposal of a building just a solar development showed “the payback wasn’t going to be that good,” he said.

Once battery storage became part of the package, further analysis showed the project would actually end up reducing rates for our customers, Blake said.

“With Minnesota Power, we had highs and lows, but we got through it, and I think that’s expected with any project,” Blake said. “But without Minnesota Power, the project wouldn’t have happened either, because they had the expertise to make some real positive contributions.”

Blake added the project would have never happened without Itasca Clean Energy Group. The group held community meetings, hired a consultant to study solar and storage, and pressured the utility to build the project.

“They were really the catalyst that brought this together and they deserve the credit for that,” he said. “It’s just an example of what people can do. People really can accomplish things if they’re tenacious.”