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Released March 18, 2016 | SUGAR LAND
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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Plans by Minnesota Power (MP) (Duluth, Minnesota), a subsidiary of ALLETE Incorporated (NYSE:ALE) (Duluth), to build a 224-mile, 500 kilovolt (kV) transmission line connecting Minnesota and Manitoba took a step forward late last month after the Minnesota Public Utilities Commission (MPUC) approved the route for the proposed line. Because the line crosses international boundaries, the utility needs a presidential permit before it can begin construction of the Great Northern Transmission Line (GNTL). Minnesota Power said it expects to receive that permit in the coming weeks.
Building the GNTL Line will cost between $560 million and $710 million. HDR Incorporated (Omaha, Nebraska) is providing engineering services for the project. The owners plan to release a request for proposal (RFP) for a general contractor later this spring. The transmission line will cross the U.S.-Canadian border in Roseau County in northern Minnesota. For more on this project, see April 23, 2015, news article--U.S. Transmission Project to Import Canadian Hydropower Moves Forward.
Commenting on the MPUC's February 26 decision, Al Hodnik, ALLETE's chairman, president and chief executive, said, "Today's decision by the Commission is an affirmation of the wise investments, creativity and productive partnerships Minnesota Power continues to bring as it helps transform the nation's energy landscape. This project will promote a more balanced energy future while also delivering value for ALLETE shareholders."
If the presidential permit is received, Minnesota Power plans to begin construction of the GNTL in late 2016 or early 2017. The line will take about three years to build. The company needs the line to be operating by June 2020 to fulfill power-purchase contracts it signed with Manitoba Hydro (Winnipeg, Manitoba).
The transmission project is a foundational element of Minnesota Power's EnergyForward strategy to reduce carbon emissions and ensure continued reliability and affordable rates while diversifying its energy portfolio to be about 33% renewable energy, 33% coal and 34% natural gas. As recently as 2005, coal accounted for about 95% of the electricity generated by the Duluth utility. The line will bring hydropower from Manitoba Hydro to Minnesota and transmit power from Minnesota Power's Bison Wind Farm north to the Canadian province. Minnesota Power signed power purchase agreements for 383 megawatts (MW) with Manitoba Hydro that will begin June 1, 2020.
Minnesota Power said the proposed high-voltage transmission line will "enhance a unique synergy" between the two utilities. When wind production is high, typically at night, Manitoba Hydro can reduce its dams' electric output and use windpower from Minnesota. When wind production is lower, typically during the day, Manitoba Hydro's dam operators can release water and send clean power southward to Minnesota.
"Now we will have the opportunity to utilize the battery system that those big hydroelectric operations can provide," Dave McMillan, executive vice president for Minnesota Power, told The Star Tribune, a Minneapolis newspaper. "There is nothing else like it until we perfect large-scale battery technology. This is really, really good."
Dan Woynillowicz, policy director of the Clean Energy Canada think tank, told that newspaper the Minnesota Power-Manitoba Hydro deal is the first he's seen where a U.S. utility is using Canadian hydropower to back up its wind energy. "There have been some fears on the part of U.S. states that Canadian hydro imports could push out opportunity for domestic renewables, predominantly wind. But what this illustrates, and what I think we'll likely see going forward, is that it's not actually direct competition, it's something that can enable renewables to play a bigger role in the U.S. power system than they might otherwise."
"Minnesota Power worked hard early on to engage landowners, community members, tribal and other stakeholders to explain the project and receive feedback," Brad Oachs, Minnesota Power's chief operating officer, said in a statement. "The extensive outreach, including more than 75 meetings and open houses, was a critical part of the project development process." That process began in 2012.
"This is an interesting transaction because it connects summer-peaking Minnesota Power with winter-peaking Manitoba Hydro," commented Britt Burt, Industrial Info's vice president of research for the global Power Industry. "In addition to whatever exchanges take place between Minnesota and Manitoba, the hydro dams in Manitoba can back up intermittent wind power in Minnesota. Because this transmission line would help a U.S. utility lower its reliance on coal-fired power, I expect they will receive their import certificate from Washington."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
Building the GNTL Line will cost between $560 million and $710 million. HDR Incorporated (Omaha, Nebraska) is providing engineering services for the project. The owners plan to release a request for proposal (RFP) for a general contractor later this spring. The transmission line will cross the U.S.-Canadian border in Roseau County in northern Minnesota. For more on this project, see April 23, 2015, news article--U.S. Transmission Project to Import Canadian Hydropower Moves Forward.
Commenting on the MPUC's February 26 decision, Al Hodnik, ALLETE's chairman, president and chief executive, said, "Today's decision by the Commission is an affirmation of the wise investments, creativity and productive partnerships Minnesota Power continues to bring as it helps transform the nation's energy landscape. This project will promote a more balanced energy future while also delivering value for ALLETE shareholders."
If the presidential permit is received, Minnesota Power plans to begin construction of the GNTL in late 2016 or early 2017. The line will take about three years to build. The company needs the line to be operating by June 2020 to fulfill power-purchase contracts it signed with Manitoba Hydro (Winnipeg, Manitoba).
The transmission project is a foundational element of Minnesota Power's EnergyForward strategy to reduce carbon emissions and ensure continued reliability and affordable rates while diversifying its energy portfolio to be about 33% renewable energy, 33% coal and 34% natural gas. As recently as 2005, coal accounted for about 95% of the electricity generated by the Duluth utility. The line will bring hydropower from Manitoba Hydro to Minnesota and transmit power from Minnesota Power's Bison Wind Farm north to the Canadian province. Minnesota Power signed power purchase agreements for 383 megawatts (MW) with Manitoba Hydro that will begin June 1, 2020.
Minnesota Power said the proposed high-voltage transmission line will "enhance a unique synergy" between the two utilities. When wind production is high, typically at night, Manitoba Hydro can reduce its dams' electric output and use windpower from Minnesota. When wind production is lower, typically during the day, Manitoba Hydro's dam operators can release water and send clean power southward to Minnesota.
"Now we will have the opportunity to utilize the battery system that those big hydroelectric operations can provide," Dave McMillan, executive vice president for Minnesota Power, told The Star Tribune, a Minneapolis newspaper. "There is nothing else like it until we perfect large-scale battery technology. This is really, really good."
Dan Woynillowicz, policy director of the Clean Energy Canada think tank, told that newspaper the Minnesota Power-Manitoba Hydro deal is the first he's seen where a U.S. utility is using Canadian hydropower to back up its wind energy. "There have been some fears on the part of U.S. states that Canadian hydro imports could push out opportunity for domestic renewables, predominantly wind. But what this illustrates, and what I think we'll likely see going forward, is that it's not actually direct competition, it's something that can enable renewables to play a bigger role in the U.S. power system than they might otherwise."
"Minnesota Power worked hard early on to engage landowners, community members, tribal and other stakeholders to explain the project and receive feedback," Brad Oachs, Minnesota Power's chief operating officer, said in a statement. "The extensive outreach, including more than 75 meetings and open houses, was a critical part of the project development process." That process began in 2012.
"This is an interesting transaction because it connects summer-peaking Minnesota Power with winter-peaking Manitoba Hydro," commented Britt Burt, Industrial Info's vice president of research for the global Power Industry. "In addition to whatever exchanges take place between Minnesota and Manitoba, the hydro dams in Manitoba can back up intermittent wind power in Minnesota. Because this transmission line would help a U.S. utility lower its reliance on coal-fired power, I expect they will receive their import certificate from Washington."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
