Despite the pending retirements of smaller power plants, coal will remain a key source of Minnesota’s electricity — and of greenhouse gas emissions.
Updated: February 10, 2013 - 1:48 PM
The end of coal burning is coming to a dozen Minnesota electric generators. But it will hardly put a dent in the state’s greenhouse gas emissions, a Star Tribune analysis shows.
Over the past year, utilities in Minnesota have announced that 12 coal burners are being retired or switched to burn natural gas, mostly by 2016.
They are small, older units, some of them little used and uneconomical, and account for just 3 percent of the state’s emissions of carbon dioxide, a gas linked to global warming.
“It’s not going to be the silver bullet for addressing greenhouse gas emissions,” said David Thornton, an assistant commissioner for air policy and pollution for the Minnesota Pollution Control Agency.
Electricity generation contributes nearly a third of the state’s greenhouse gases because many power plants rely on fossil fuels, mainly coal and increasingly natural gas.
When the smaller coal plants from Hoyt Lakes to Burnsville to Rochester are gone, Minnesota electric customers still will be getting a major share of their power from a fleet of larger, newer coal plants that utilities plan to keep operating.
The remaining 12 coal generators spew nearly six times more carbon dioxide than the small units slated to go away — about 17 percent of the state’s overall greenhouse gas emissions, according to the newspaper’s analysis of state smokestack data.
Utilities across the Midwest are considering pollution-control investments to extend the life of their big coal plants.
More than 100 of them on the Midwestern power grid are planning such upgrades, according to a fourth-quarter survey by the grid operator MISO. While fewer coal plants will remain, they will be 50 percent bigger on average than those of today, the survey suggests.
Upgrading them would cut some smokestack emissions — reducing smog, mercury and haze — but it would have little effect on carbon dioxide, the main greenhouse gas they emit. Experts say that no economically proven technology exists to remove greenhouse gases from smokestacks.
These potential investments in coal power plants come at a time when political leaders from President Obama to Gov. Mark Dayton have advocated more action on climate change. Obama mentioned it in his inaugural address last month, leading to speculation that he will offer details Tuesday in his State of the Union address.
The U.S. Environmental Protection Agency last year proposed greenhouse gas regulations for new power plants that make it unlikely more will be built. The EPA has not proposed rules for existing power plants, although many experts, including the MPCA’s Thornton, believe they are coming.
“Within a few years we are going to see a limit on the carbon pollution from those plants,” said J. Drake Hamilton, science policy director for Fresh Energy, a St. Paul-based nonprofit that supports renewable energy. “It is not a static situation. The climate science has been clear for many years. Wise utilities are listening.”
Strategy: Diversify sources
The strategy of many utilities in Minnesota and elsewhere has been to retain some coal plants and diversify with wind power, solar and natural gas-fired generators, which emit less carbon dioxide, while promoting conservation by customers.
“If you look nationally, Minnesota is probably one of the top states in the nation as far as leading the country in change,” said Al Rudeck, vice president of strategy and planning for Minnesota Power, the Duluth-based power company serving the Iron Range and central Minnesota.
Minnesota Power, which long relied almost exclusively on coal generation, last month announced it would shutter one coal burner and convert two others to burn natural gas, and add wind power, hydro and probably a new natural gas-fired generator. Its aim eventually is to get a third of its energy from coal, a third from natural gas and a third from renewable sources.
That strategy includes investing $350 million to upgrade pollution controls on its largest coal-burning generator, co-owned with a Wisconsin utility, with the goal of operating it until 2040. The generator is part of the Boswell power plant in Cohasset, Minn., that in 2011 was the state’s second-largest greenhouse gas emitter, according to EPA data.
Xcel Energy, the state’s largest electric utility, also has embraced fuel diversity. It shuttered two old coal plants in the Twin Cities in the past decade and replaced them with natural gas units. It captures the most wind power of any U.S. electric utility and is adding more. Xcel also has extended the life of its two nuclear power plants, which emit no carbon dioxide, and promotes conservation and solar power.
Laura McCarten, an Xcel regional vice president, said the utility is on track to reduce greenhouse gas emissions 30 percent by 2020 from 2005 levels. In fact, one of Xcel’s policy concerns is that it get credit for those early actions if the EPA enacts greenhouse gas restrictions on existing plants.
Relies on coal
Xcel still relies on coal, including an upgraded coal plant in Oak Park Heights that in 2011 was the state’s fifth-largest emitter of greenhouse gas. The company now faces a decision point for its largest power plant — the coal-burning Sherco generators in Becker — the state’s largest emitter of carbon dioxide.
The utility recently began studying the future of the oldest two units at Sherco, which supply about 20 percent of its Minnesota customers’ power. Xcel has invited environmentalists, business groups and others to participate in the study, which must be submitted to state regulators July 1.
A key question is whether Xcel should further invest in the 1970s-era generators, which eventually may need another $350 million in pollution controls. Replacing the units with large natural gas-burning units, for example, likely would cost more than $1 billion.
“These are enormous units and they are a very important part of our overall system,” said Frank Prager, Xcel vice president for environmental policy. “This would be an enormous decision if the units were to shut down. We need to think seriously about whether that makes sense for our customers.’’
One unknown for utilities, ratepayers and investors is how regulators might react a decade from now if utilities seek rate hikes to replace their fleets of upgraded coal burners whose extended lives might become threatened by climate-change regulations.
“When utilities adjust their fleets, customers are going to bear higher costs,” said Travis Miller, a utility analyst for Morningstar in Chicago. “The big risk for utility investors is that regulators will disallow some of those costs because of the rate shock that might occur as we transition to fleets with less greenhouse gas.”
David Shaffer • 612-673-7090
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