Minnesota’s Renewable Energy Standard (RES)—also known as a Renewable Portfolio Standard (RPS)—is intended to increase use of renewable resources in the state by establishing the minimum amount of renewable energy that the state’s electricity providers must sell in a given year. This legally-established renewable energy procurement goal gradually increases over time to meet the overall target of 31.5% renewable power by 2020 for Xcel Energy (the state’s largest public utility). All other public utilities must produce 26.5% of retail electric sales from renewable sources by 2020.
The state profile below explores the design of this policy, highlighting the factors that influence the success of Minnesota’s RPS goals and the tradeoffs inherent to it. Once you’re comfortable with the information on this page, you can evaluate the policy’s expected viability with the RPS Feasibility Calculator. You can also use the calculator to change the policy requirements, trajectory, cost cap, and more, to see how altering Minnesota’s policy design affects its success.
- 31.5% of the Xcel Energy’s, and 26.5 of all other public utilities, retail electric sales from must be from renewable sources by 2020
- Carve-outs for wind and solar
- No legally defined cost cap
Carve-outs can create economic opportunities in the state by introducing new or promising technologies into the market. However, these standards limit the utilities’ ability to substitute between renewable energy sources, potentially increasing the cost of the policy. Minnesota’s RES requires that 1.5% of retail electric sales be produced using solar power by 2020 for all public utilities. Ten percent of this requirement must be met with solar systems with capacities less than 20 kW. For Xcel Energy, 24 percentage points of the 30% renewable obligation in 2020 must come from wind energy.
Compare the goal established in the RPS to what is being achieved.
The following chart compares the variety of sources currently used to generate Minnesota’s electricity. The color of each bar is indicative of the carbon intensity of each source.
Cost Cap Details
Unlike some states, Minnesota does not have an explicit ‘cost cap’ or limit on the potential increase in electricity costs as a result of this policy. Rather, the Minnesota Public Utilities Commission (PUC) is responsible for managing these costs. The PUC has the right to modify or delay obligations under the RES if, among other reasons, the impact on retail rates is too high. Using the RPS Feasibility Calculator you can act as the PUC, determining what level of costs will lead to a viable RPS.
Historic retail prices (¢ / kWh)
The above chart presents historical data from the Energy Information Administration (EIA) on the price at which residential customers can purchase electricity. Typically, states set explicit cost caps relative to the retail price (as opposed to the lower wholesale price).
In 2001, Minnesota adopted the state’s first renewable energy policy, the Renewable Energy Objective. This suggested that utilities make a ‘good faith effort’ to achieve its goal of 10% renewable energy by 2015. This policy was replaced by the current RES in 2007, mandating the aforementioned levels of renewable energy (or renewable attribute) procurement. RECs are tradable within the Midwest Renewable Energy Tracking System (M-RETS) with the exception of attributes produced by Xcel Energy. This utility is not allowed to trade RECs to other Minnesota utilities until 2021. The state’s solar obligation must be met with RECs associated with the generation of solar energy.
RPS Technical Details
|Eligible Technologies||Solar Thermal Electric, Photovoltaics, Landfill Gas, Wind, Biomass, Hydroelectric, Municipal Solid Waste, Hydrogen, Co-Firing, Anaerobic Digestion|
|Geographic Eligibility||RECs must be generated in Midwest (M-RETS). Some limits to trading within state (see statute)|
|Percent of Total Load||100%|
|Technology Requirements||All public utilities must achieve 1.5% solar energy by 2020. Xcel Energy must also achieve 24% wind energy by 2020.|
|Sectors||Municipal Utility, Investor-Owned Utility, Rural Electric Cooperative|
|Penalty||If a utility fails to comply with the RPS, the PUC may impose a fine up to the cost of compliance.|
Tools and other links
- Database of State Incentives for Renewables & Efficiency (DSIRE) RPS data page—Datasets available for download in .xlsx format
- National Renewable Energy Laboratory (NREL) Energy Analysis Portal—Resources on renewable energy policies, and interactive web tools
- Energy Information Administration (EIA) U.S. Energy Mapping System—An interactive energy resource map with a myriad of data layers to explore