Minnesota Power proposes a $700M 'renewable energy enabling' gas plant

Dive Brief:

Minnesota Power and Dairyland Power Cooperative formed a joint venture to build a $700 million gas-fired combined-cycle plant with a capacity of 525-550 MW in Superior, WI.
The partners plan to have the plant online by 2025. The new gas plant is part of Minnesota Power's push to wean off coal-fired generation, and will support the influx of renewable energy, the utility said in a statement.
Minnesota Power also said it has a signed a 20-year agreement to buy wind power from the 250 MW Nobles 2 wind farm being developed by Tenaska and due online in 2019 and a 25-year PPA to buy 10 MW of solar capacity from a project being developer Royalton, Minnesota.

Dive Insight:

Minnesota Power, like several other utilities, is reducing its carbon footprint. Late last year, the utility asked the Minnesota Public Utilities Commission for an 18% rate hike, but also filed a renewable resource rider that, if approved, could offset about half of the interim rate hike.

The utility is now adding to its portfolio of wind and solar power with two long term purchase agreements, and it is backing up an expected increase renewables and loss of coal-fired generation with gas-fired generation.

“Natural gas plants provide critical back-up to intermittent renewable sources of power, like solar and wind,” Barbara Nick, president and CEO of Dairyland Power, said in a statement.

Earlier in the year said it plans to retire two coal plants with a combined capacity of 130 MW. Most of the utility’s power still comes from coal generation, but it plans to reduce its carbon dioxide emissions by about 20% by 2020.

Minnesota Power and Dairyland Power call their planned gas project a “renewable energy enabling” plant, but it could meet pushback from environmental stakeholders. Xcel Energy proposed a similar scheme last year, aiming to replace 1.4 GW of coal capacity with a mixture of renewable energy and natural gas generation. While environmental groups have by and large supported the proposal, they expressed doubts over the investment of natural gas.

The Nemadji Trail Energy Center will be sited along the Nemadji River in Superior, WI, adjacent to the service territories of both partners.