This analysis investigates and compares the cost-effectiveness of renewable energy standards and technology-neutral policies for reducing carbon dioxide (CO2) emissions from Minnesota’s electric power sector through 2050. Using EPRI’s in-house electric sector capacity expansion and dispatch model, US-REGEN, the analysis quantifies the cost-differences between the policy approaches, and examines the key drivers of those differences, including (1) how generation and transmission capacity investments in the state and across the region are expected to change over time; (2) the flow of electricity and renewable energy certificates (RECs) in-and-out of Minnesota; and (3) the revenues generated by in-state electric sector resources.
KEY INSIGHTS
- A technology-neutral carbon reduction policy (e.g., a CO2 target) could achieve the same level of CO2 emissions reduction in Minnesota at lower cost than a high renewable electricity standard of 60% by 2030 and 95% by 2050, saving $2.7 billion in total electric sector costs between 2015–2050.
- A high renewable standard would likely require significant investments in new transmission between Minnesota and neighboring states, more so than a comparable CO2 target.
- Operating under a CO2 target, Minnesota’s generation fleet could provide the state with higher electric sector revenues than under a comparable high renewable standard.
- A CO2 target supports approximately the same amount of new Minnesota wind, and more instate generation investment overall, than a high renewable standard achieving the same level of carbon reduction.
Authors Nidhi R. Santen, David Young, and John Bistline