Can Minnesota reach standards in 100% carbon-free energy by 2040 bill without nuclear?

Minnesota utilities will have to produce all of their electricity from carbon-free sources by 2040 under a bill Gov. Tim Walz plans to sign on Tuesday afternoon. 

Nuclear energy, which produced 24% of Minnesota’s electricity in 2021, can count toward that standard but won’t likely be part of the mix for long. One of the state’s two nuclear power plants is slated to close before 2040, and Democrats resisted efforts to lift the state’s moratorium on new nuclear power plants.

Without the benefit of nuclear power, utility companies will have about 17 years to shift the lion’s share of their energy portfolios to renewable sources like wind and solar, which currently produce about 30% of the state’s electricity.

Experts say it’s possible, but “requires some faith.” 

The bill (HF7) creates two standards that Minnesota utilities are required to meet: They must transition to 100% carbon-free energy sources by 2040. And, by 2035, the energy utilities must show that 55% of their energy sales are from renewable sources. Nuclear energy is not considered a renewable energy source, however, and only counts toward the carbon-free standard. 

Minnesota is one of at least 12 states that have a moratorium on construction of new nuclear power facilities. Republicans last week attempted to amend the bill to either modify or lift the moratorium, but Democrats voted down their efforts. The Minnesota Chamber of Commerce supported the amendments to lift the nuclear restrictions.

“Without expanded nuclear generation in Minnesota, our grid’s reliability will depend on storage technology that does not currently exist or on the continued use of carbon-based fuel sources,” said Brian Cook, director of energy policy for the Chamber of Commerce, in a statement. “We will continue to push for the state’s utilities to have new nuclear generation be a part of our future energy mix.”

The state already has two nuclear power plants — one in Monticello and the other adjacent to the Prairie Island Indian Community about 30 miles southeast of the Twin Cities. 

Energy generated from those two plants can count toward a utility’s carbon-free energy portfolio, bill advocates say, but their future is uncertain.

Xcel Energy owns both the Monticello and Prairie Island power plants. Xcel late last month sent an application to the U.S. Nuclear Regulatory Commission to extend the operating license for the Monticello plant to 2050. The licenses for both reactors at Prairie Island are set to expire in 2033 and 2034.

Fresh Energy, a nonprofit climate advocacy organization, is supportive of keeping the existing nuclear plants in Minnesota to help the state transition to carbon-free energy, said Allen Gleckner, lead director for policy and programs at Fresh Energy.

Without nuclear energy, Gleckner said the majority of energy needs can be met with other carbon-free and renewable sources. The remaining energy needed will come from emerging technology, he said.

“New technology is expected to play a big role,” Gleckner said. “There are emerging technologies on the cutting edge, but it’s still not clear which ones are going to emerge as the most widely adopted.” 

Under the new law, if a utility can’t meet the carbon-free or renewable deadlines, it can also pay for energy credits instead of buying or generating carbon-free or renewable energy. 

Some smaller utilities in greater Minnesota may be forced to pay for the credits by raising the prices they charge customers. Utilities can also ask for an “off ramp” if they can demonstrate the standards would drive up costs or affect energy reliability.

The legislation passed in both chambers along party lines.