Feds announce major investments in Minnesota's electric grid

New lines
The U.S. Department of Energy has awarded $150 million in grants to Xcel Energy and Minnesota Power to fund microgrids in Minneapolis and upgrade a major transmission line that carries wind energy from North Dakota.
Mark Steil | MPR News

The U.S. Department of Energy has awarded $150 million in grants to Xcel Energy and Minnesota Power to bolster the resiliency of the state's electric grid and help it adapt to a future where much more electricity will be generated from far-flung renewable sources such as wind and solar.

Fifty million dollars goes to Duluth-based Minnesota Power, to help the utility upgrade a massive but aging high-voltage, direct current transmission line that runs 465 miles from Center, N.D., to Hermantown, Minn., just outside Duluth.

Julie Pierce, vice president of strategy and planning for the utility, called the grant “huge news,” because it will increase the reliability and resiliency of the electric grid, while also allowing the utility to transport more renewable energy from wind-rich North Dakota.

And, she added, the project allows the utility to do that without having to build a new transmission line, which can be a drawn-out and controversial endeavor with local landowners.

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“We’ve got to find these unique places where we can leverage infrastructure to do bigger, more efficient things without requiring us to go a whole different route or build a whole new line,” Pierce said.

The HVDC Terminal Expansion Capability Project carries a total price tag of $960 million. It involves replacing converter stations at both ends of the line with new buildings and electrical infrastructure, but doesn’t require the utility to string new power lines, which were initially commissioned in 1977.

The state legislature contributed $15 million to the project at its session earlier this year.

Minnesota Power bought the line in 2009, which it uses to transport nearly 500 megawatts of wind energy from North Dakota.

The utility filed an application with the Minnesota Public Utilities Commission for the project on June 1.

It’s one of several electric transmission line projects in the works across the state, as utilities look to build or upgrade hundreds of miles of power lines needed to transport renewable energy from where it’s produced — often in rural areas — to where it’s consumed.

“Transmission is the bridge to allow the energy to be produced and delivered to where it's needed by all of these diverse sources that we are we are moving towards,” Pierce said, adding that there is no energy “transition” without “transmission.”

Meanwhile, Xcel Energy received $100 million to help fireproof its electric grid infrastructure in five states, including Minnesota and Wisconsin.

The utility also plans to use the funding to invest in three microgrid projects in Minneapolis, which consist of solar arrays and battery installations at a job training center and two community centers.

Earlier this year the utility announced it was pulling funding from the Resilient Minneapolis Project, shortly after state regulators approved a rate increase smaller than what the utility had requested.

“The funding will support greater resilience for communities of color,” Xcel said in a statement, adding that the project “aims to support underserved communities in Minneapolis by providing solar, battery and microgrid technologies to strengthen community resiliency.”

The grants are part of nearly $3.5 billion in federal investments across 44 states designed to strengthen electric grid resilience and reliability, funded by the infrastructure law passed in 2021.

The administration says it’s the largest ever investment in the country’s electric grid.