New Ulm benefits from increased demand for renewable energy

Heartland facilitates sales of excess RECs

The electric grid is complex.

When electricity is generated, whether it be from coal, natural gas, wind, or solar, it flows where it’s needed. The grid can’t distinguish the source or direct it to go to a certain location.

Utilities in Minnesota are required to generate or procure 25% of their total retail electric sales from renewable sources by the year 2025.

Since utilities can’t control where power flows on the grid, a special system had to be created to identify and claim renewable sources of power.

Renewable Energy Credits, or RECs, are proof that electricity was generated by a renewable energy source and delivered to the electric grid.

New Ulm Public Utilities recently worked with their wholesale power supplier, Heartland Consumers Power District, to sell excess RECs, providing a financial boost to the utility of over $300,000.

How do RECs work?

Each time one megawatt-hour of electricity is generated from a renewable resource such as wind, one REC is created.

If you own the renewable energy source, you own the REC generated. It is your choice to claim the credit or sell it. Claiming the credit also retires the credit and shows proof of utilizing renewable energy.

The Midwest Renewable Energy Tracking System (M-RETs) tracks renewable energy generation and assists in verifying compliance with renewable portfolio standards, such as Minnesota’s.

M-RETS creates a renewable energy certificate for every MWh of renewable energy produced in the region. The system is used to verify, manage and trade RECs.

Once a REC is retired, it cannot be used again.  RECs are uniquely numbered and include information such as where they were generated, the type of renewable resource they came from and a date stamp of generation.  This is done to prevent the double-counting of renewable generation. 

By purchasing RECs, the owner has certified proof of using renewable energy without having to install a renewable system on their home or business. Purchasing RECs also supports the renewable energy market. RECs are tradable, non-tangible commodities.

Increased demand drives up prices

New Ulm Public Utilities acquires RECs through their wholesale power supplier, Heartland Consumers Power District. Heartland’s resource mix includes wind energy from the Wessington Springs Wind Energy Center, a 34 turbine, 51 MW wind farm in Jerauld County, SD.

Wessington Springs Wind Energy Center in Jerauld County, SD.
Heartland’s resource mix includes the Wessington Springs Wind Energy Center in Jerauld County, SD.

New Ulm currently receives 5.5 MW of wind energy around the clock from Heartland. Of the 167,000 MWh of energy New Ulm purchases from Heartland, about 29%, or 48,000 MWh is from wind energy.

Therefore, New Ulm acquires 48,000 RECs each year.

Heartland helps administer New Ulm’s RECs through M-RETs. Data from the wind farm is submitted by a third-party so RECs can be created based on energy generated. Heartland maintains a separate New Ulm holding account under Heartland’s M-RETS account to keep track of their quantity of RECs and the year each was created. Heartland is then able to retire RECs on behalf of New Ulm.

Demand for RECs has risen dramatically over the past year, pushing REC prices higher. Heartland approached New Ulm about selling excess RECs because of the higher prices.

Because New Ulm purchases more wind energy than necessary to meet the state standard, Heartland marketed New Ulm’s surplus RECs and sold them for a net price of $5.04 each, totaling over $317,000.

“Heartland continuously monitors the REC market,” said Heartland Chief Operations Officer Nate Jones. “Like any market, the recent increase in demand for RECs has driven the price up. That proved beneficial as New Ulm had excess certificates to sell. We are happy to provide this service on their behalf.”

CEO’s Report: Solar calculator simplified

Heartland reintroduces customer tool as a web-based application

School has started which means summer has come to an end. It also means our summer interns left us to get back to class.

But, they left behind great work, including a tool that will benefit our customers for years to come.

Heartland’s solar calculator was developed in 2019 to help end-use customers determine true cost savings of solar installations.

It was available for download from our website as an Excel worksheet. Though fully functional, it did have limitations.

Now the calculator is completely web-based, accessed through an online form. This modified process is much more user-friendly and resolves snags from the previous version.

Determines costs, savings

The calculator analyzes projects that fall in one of two categories: retail or utility.

The retail calculator is for customers who want to install solar panels on their property.

Users must provide some data, such as average monthly electric bill and project size or budget. The calculator determines the project’s generation output, savings and payback period.

It also indicates the likelihood of paying off the array, based on an average array lifespan of 20 years

The utility calculator helps determine the cost impact of a solar installation on a retail utility. Users provide the solar array size and the customer’s previous kWh usage.

Both make certain assumptions to determine true cost savings from installing a renewable system on a home or business.

Visitors to Heartland’s website must choose either the Utility or Retail solar calculator.

DEED helps fund internships

Interns developed both the Excel and web versions of the calculator. The internships were made possible in part by APPA’s Demonstration of Energy and Efficiency Development (DEED) program.

Peter Choudek

DEED funds research and innovation projects to improve operations and services of public power utilities. Scholarships are awarded for paid work experience at participating utilities.

Electrical engineering student Peter Choudek created the original version during his internship in 2019. This tool gained national recognition with an Energy Innovator Award from APPA.

John Kirkvold

In 2020, Heartland was again awarded a DEED scholarship to make the renewable calculator web ready. Computer science major John Kirkvold completed this work this past summer.

Links to the web calculators are available on Heartland’s website. Users will also find a step-by-step video tutorial, created by Kirkvold.

Tool helps make informed decision

A new report from research group BloombergNEF says solar power is the global leader in new power generation. In fact, at least 1MW of solar plants were installed in 81 different countries in 2019.

It’s true–solar technology is less expensive than before and widely available for homes, businesses and grids. What’s less clear is the value and suitability of small-scale installations.

Factors including roof space, location, state laws and more impact the payback period and savings that may be achieved.

With the ease of an online form, Heartland’s solar calculator can simplify this cost-benefit analysis and help residents–and the utilities that serve them–make informed decisions.

Heartland receives Energy Innovator Award

Solar calculator recognized by American Public Power Association

Heartland Consumers Power District earned the 2020 Energy Innovator Award (EIA) from the American Public Power Association’s (APPA) Demonstration of Energy & Efficiency Developments (DEED) program.

The EIA award honors utilities that have developed or applied creative,
energy-efficient techniques and technologies. Awards recognize creativity, resource efficiency, benefits to utility customers, transferability, and project scope in relation to utility size.

During the summer of 2019, Heartland employed a college intern to develop calculator tools to help determine the annual benefit and cost of installing a renewable energy system, particularly a solar array. One calculator is for retail customers who want to install solar panels on their property, while the other is for the utility to determine the cost to the utility itself.

The solar calculators are complete and functional within the Microsoft Excel program. The tool allows the residential user to enter data such as state of residence, electricity cost, home electric usage, and solar array size/budget; and it will provide the user with estimated energy savings, cost savings, and potential payback.

These results are custom to the individual user based on the inputs and incorporate state/federal laws pertaining to distributed/renewable generation and applicable tax credits. In addition, a number of assumed average inputs (electricity cost, electric usage, solar cost, etc.) custom to the individual’s inputted location are included in the calculator in case the user does not have the data on hand. In addition, a calculator was developed that incorporates all the previously mentioned calculations into an algorithm that estimates the financial impact of a solar installation on a retail utility.

The calculator makes some assumptions but it does so based on answers to certain questions including geographic location, making it a useful tool for any utility.

The customer-focused calculator is available on Heartland’s website for public power utilities to utilize.

More deliverables, beyond the consumer-focused tool are accessible to DEED members from DEED’s Project Database.

Featured image: Heartland Director of Power Supply Adam Graff, Chief Communications Officer Ann Hyland, and Director of Market Operations McCord Stowater stand with the APPA Energy Innovator Award.

Solar power: trend or fad?

There are currently about 1.5 million solar panels installed in the United States, producing about 64 GW of energy, equating to about 1.6% of all the generation in the country.

Most solar installations have occurred in the last few years, with almost one sixth of current solar energy installed in 2018 alone. Solar has ranked first or second each year since 2013 in new generating capacity added.

The average solar installation equals 5 kilowatts. However, utility scale solar (installed solar capacity greater than 1 MW) is becoming more popular with about 2,500 MW currently under construction.

Like many other emerging technologies, the price of installing solar continues to fall, and efficiency continues to increase.

But many questions remain. Is solar cost effective? What will the payback be? Is solar power just a passing fad?

Heartland Chief Operations Officer Nate Jones tackled those questions and more at Heartland’s recently held Budget Meetings.

According to a recent survey, 89% of Americans support solar. However, cost was not a consideration in the survey. Since 59% of those who support solar say saving on their electric bills is their motivation, cost would certainly impact this statistic.

So, the question becomes, will you save on your electric bills by installing solar panels?

Heartland’s recently developed solar calculator should help answer this question, for both residents interested in installing solar panels and the utilities that serve them.

The calculator is designed to determine the payback of different-sized installations.

The solar calculator can be downloaded from Heartland’s website.

The calculator utilizes every state’s unique set of rules governing solar installations. These rules differ in regard to billing offsets and the rate at which excess generation must be purchased by the utility. It correctly analyzes solar data including accurate production estimates, which gives a realistic payback period.

While solar vendors will provide savings estimates, it is important to remember their goal is to make a sale. Our goal is to provide another non-partial resource to ensure all the most relevant information is available to make an informed decision.

There is no one-size-fits-all approach to solar. Factors including roof space, location, state laws and more will determine the payback period and level of savings able to be achieved.

All costs and risks must be weighed against potential savings.

We encourage you to use this calculator as a resource when your customers inquire about installing solar. While solar may not have popped up in your community yet, chances are it will at some point.

Heartland recently sent out a survey to our customers inquiring about your utility’s feelings about solar and readiness for installations in your community. We encourage you to fill that out if you haven’t already done so. This will help us determine how we can best help customers be prepared should you see an interest in solar in your community

Energy and environment curriculum available from APPA

The American Public Power Association (APPA) Product Store is now offering Energy & the Environment-A High School Curriculum for Public Power. The curriculum was produced by Santee Cooper with a grant from APPA’s Demonstration of Energy & Efficiency Developments (DEED) program. Designed to educate high school students about energy production and environmental science, the curriculum covers twelve topics, including electric power operations, solar energy, hydroelectric energy, and wind energy, and comes with a teacher-guided lesson plan. Use of the curriculum encourages student-led exploration, data collection, application of real life concepts, and research presentation.  Purchasers will receive an e-mail with links to a PDF of the curriculum and other supporting materials. Please contact Matt Konjoian at Products@publicpower.org with any questions.