We've been posting about the economic losses Great River Energy had been experiencing operating its lignite-coal fueled Coal Creek plant in North Dakota--and the possibility that GRE might close the plant.
Our sources had told us a big change was coming, and that change is now official, Mike Hughlett reports in the Star Tribune article, Minnesota's Great River Energy closing coal plant, switching to two-thirds wind power:
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 three 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 co-op 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 purchase in the regional wholesale electricity market. . . .
Read the rest at the Star Tribune. We'll have more as the day unwinds.
UPDATE #1 12:38 May 7: Here's Great River Energy's statement about the closure: Major power supply changes to reduce costs to member-owner cooperatives:
Great River Energy plans to replace coal with low cost renewables and market energy purchases
Great River Energy announced plans today to transform its portfolio of power supply resources in the coming years, significantly reducing member-owner wholesale power costs. The electric cooperative plans to phase out remaining coal resources, add significant renewable energy and explore critical grid-scale battery technology.
Great River Energy plans to take the following actions:
- Retire the 1,151-megawatt (MW) Coal Creek Station in the second half of 2022
- Add 1,100 MW of wind energy purchases by the end of 2023
- Modify the 99-MW, coal and natural gas-based Spiritwood Station power plant to be fueled by natural gas
- Install a 1-MW, long-duration battery demonstration system
- Support the repowering of the Blue Flint biorefinery with natural gas
“We are building a power supply portfolio that will serve our member-owner cooperatives for decades,” Great River Energy President and Chief Executive Officer David Saggau said. “We are taking advantage of cost-competitive renewables and reliable access to market energy while fostering innovation as the technology of our industry evolves.”
Today’s announcement follows several changes Great River Energy has made in recent years to seek economic efficiencies in its power supply portfolio. Past analysis has led to decisions to exit a contract for half the output of a Wisconsin coal plant in 2015, retire the coal-based Stanton Station power plant in 2017, close the waste-to-energy Elk River Resource Recovery Project in 2019 and purchase the output of several wind energy projects.
The portfolio changes announced today will significantly reduce Great River Energy’s member-owner power supply costs. In addition, the cooperative’s power supply resources will be more than 95% carbon dioxide-free, virtually eliminating carbon risk.
“Our power supply plans deliver on our member-owners’ three highest priorities: affordability, reliability and environmental stewardship,” Saggau said. “Electric cooperatives have a bright future in Minnesota.”
Great River Energy plans to purchase more than 1,100 MW from new wind energy projects. This amounts to a more than $1.2 billion investment in the Midwest’s abundant clean energy resources. Great River Energy’s renewable capacity is projected to grow from approximately 660 MW in 2020 to more than 1,760 MW by the end of 2023. The Great River Energy board of directors today approved 600 MW of wind energy projects, most of which will be located in Minnesota.
Great River Energy plans to add energy and capacity as needed through upgrades at its fleet of modern, natural gas peaking plants and purchases from the MISO energy market.
Coal Creek Station has been a critical part of Great River Energy’s power supply portfolio for decades, but it has lost value compared to other alternatives in recent years. Great River Energy plans to shut down both units of Coal Creek Station during the second half of 2022, although the cooperative is willing to consider opportunities to sell the plant. Coal Creek Station began operations in 1979 in Underwood, North Dakota, and employs 260 people.
“Like all of Great River Energy’s decisions, these changes are made in the best interests of our member-owner cooperatives,” Saggau said. “Coal Creek Station is operated efficiently, safely and with pride by a dedicated and talented staff. We will make every effort to minimize impacts on our employees and the communities through this transition.”
To assist local communities during the upcoming transition, Great River Energy plans to make voluntary annual payments of the local government share of the plant’s taxes for five years after the plant’s closure.
Great River Energy plans to negotiate an agreement to terminate its steam and water supply contract with Blue Flint, an ethanol biorefinery fueled by process steam from Coal Creek Station. Blue Flint’s owner, Midwest AgEnergy, is considering using the contract termination payment from Great River Energy to reinvest in an economical alternate source for its process heat, thereby benefitting area farmers by continuing to support the local market for corn.
Located near Jamestown, North Dakota, Spiritwood Station is a combined heat and power plant fueled by a combination of DryFineTM lignite coal and natural gas. Great River Energy plans to modify the plant to be fueled with natural gas. The plant generates electricity for the regional electric grid and supplies steam to a nearby ethanol biorefinery.
Great River Energy is working with Form Energy, a battery storage technology developer based in Somerville, Massachusetts, on a first-of-its-kind demonstration of Form’s unique long-duration storage technology. The battery project will be a 1-MW, grid-connected storage system capable of delivering its rated power continuously for 150 hours, far longer than the four-hour usage period common among lithium ion batteries. Long-duration storage will help maintain grid reliability in the future during extreme conditions, such as a heat wave or polar vortex. The battery system will be located in Cambridge, Minnesota, and completed in late 2023.
The projects announced today will create hundreds of high-quality construction jobs. “We look forward to partnering with local labor and industry on our projects,” Saggau said.
We certainly see the jobs created by wind energy development here in Summit, SD.
Related posts:
- Coal Creek plant fate: wind, zoning & coal
- Great River Energy's choice: Star Tribune looks at Coal Creek power plant financial pain
- UCS: MN's electricity sector transitioning but electric coops remain tied to coal-fired plants
- Lignite Energy Council set up MN political fund
- CURE & allies' report: Rural electric coops’ loyalty to coal holds rural America back.
- Did thousands of people coming to Capitol to demand climate action change Bakk's heart?
- MN Senate Majority Leader Gazelka embraces the gospel of Minnesotans for Global Warming
- ND state/lignite industry partnership continues funding for Coalition for Secure Energy Future
- In Minnesota, coal still has its defenders — funded by North Dakota (Energy News Network)
- Horse hockey: who's pushing the puck for new Coalition for a Secure Energy Future TV ad?
- MPCA schedules 4 Clean Power Plan community listening sessions around state in February
Photo: The Coal Creek plant.
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