by Emma Foehringer Merchant
June 02, 2020

Last week Midwest utility Alliant Energy, which delivers electricity in Wisconsin through its subsidiary Wisconsin Power and Light, made good on a 2019 commitment to significantly boost the amount of solar in its portfolio. The utility said it would purchase 675 megawatts in Wisconsin, upping the state’s existing total more than threefold.

The projects, to be developed by NextEra, New York’s Ranger Power, Macquarie-backed Savion Energy, and National Grid-owned Geronimo Energy, will come online in the next three years, launching Wisconsin into the group of states with a significant solar footprint.

Along with numerous other recent solar announcements in the region, those acquisitions serve as another signal that solar development is no longer concentrated primarily in the West Coast and in the Northeast. As the Southeast has grown into a significant center of solar development, more installations have steadily crept into the Midwest as well, emerging in states where wind energy has long dominated or cropping up in coal-heavy, industrial locales.

In Wisconsin, utilities have been hesitant to embrace solar. In that way, Alliant is something of an exception. The utility, which also has customers in Iowa, has pledged to acquire 1 gigawatt of solar in Wisconsin by 2023, owning and self-developing some of that generation.

America’s Dairyland goes solar

Alliant, one of Wisconsin’s two largest utilities, serves 15 percent of the state’s electricity customers. The utility now relies on natural gas and coal for the majority of its generation. In 2018, renewables accounted for just one-fifth of its resources.

But Alliant says its mix is in flux as it pursues cleaner resources. By 2024, the utility is targeting 33 percent renewables, a figure that does not include the 1 gigawatt of solar it plans to add.

Alliant now plans to cut carbon emissions 80 percent below 2005 levels by 2050, the year scientists say the world must reach net-zero carbon to avoid the worst effects of climate change. But it may accelerate its targets.

After the recent addition of a large gas generating station called the West Riverside Energy Center, the utility told Greentech Media it had no imminent plans to build more fossil fuel generation. Instead, Alliant will add around 1.2 gigawatts of wind — Wisconsin now has 746 megawatts of wind compared to just several hundred megawatts of solar — plus 1 gigawatt of solar in the next several years.

Three years ago, the utility set up a “solar lab” at its headquarters in Madison, Wisconsin's capital, to better understand applications of the technology. But not until determining that adding solar and retiring fossil fuels could save customers money did Alliant choose to significantly invest in large-scale solar. Alliant plans to own and operate all of the six projects it announced in May.

“Our resource plan really did determine that solar was the best value for customers, both from a capacity and an energy standpoint,” Jeff Ripp, the utility’s director of regulatory strategy and solutions, told Greentech Media.

For many of the developers, their projects for Alliant are also their first in Wisconsin.

Savion, a solar and storage developer based in Missouri, told Greentech Media that it sees Wisconsin as a growing market. Ranger Power, which has one other solar contract underway in the state with generation and transmission cooperative Dairyland Power, also has several other projects in development there. Geronimo has 250 megawatts in the works in Wisconsin.

Like Alliant, developers cited increasingly enticing economics as a reason for investing in the state. Solar now makes up nearly 60 percent of the interconnection queue in the territory of the Midcontinent Independent System Operator, the ISO that serves parts of the Midwest and the Southeast.  

A solar-plus future?

Alliant’s 1-gigawatt-by-2023 announcement positions it as a leader in Wisconsin, said Elizabeth Ward, director at Sierra Club’s Wisconsin chapter. Overall, the state gets only about 8 percent of its electricity from renewables including hydro, according to the U.S. Energy Information Administration. WEC Energy Group, the state’s other large investor-owned utility, gets just 2 percent of its generation from non-hydro renewables.

“The Alliant announcement is a huge leap forward, but in general it’s pretty clear that Wisconsin is falling behind,” said Ward.

Overall, coal accounted for 42 percent of Wisconsin’s generation in 2019, and that was the first year it accounted for less than half of the state’s electricity generation, according to EIA.

Just a few days before unveiling its new solar projects in May, Alliant announced it would retire a 380-megawatt coal plant in the state, leaving just one of its coal plants in Wisconsin operating. That same month, Alliant announced the expansion of a 730-megawatt combined-cycle gas plant, which is likely to run for decades.

Environmentalists in the state and region, including the Sierra Club, would like to see Alliant move away from fossil fuels more aggressively and incorporate other technologies such as storage that could substitute for gas.

While falling prices have made ambitious battery storage projects a reality in states such as Nevada and California, many Midwestern utilities are taking a more cautious approach. Alliant told Greentech Media it’s interested in the potential for battery storage, even undertaking several small demonstration projects. But it doesn’t yet believe the technology is ready for large-scale deployment in Wisconsin because it’s still too expensive.

Instead, gas is replacing much of Wisconsin’s waning coal use. In 2019, natural gas accounted for 34 percent of generation, a quadrupling from 10 years ago, according to EIA figures. 

That worries environmental groups in the area that don't want to see utilities like Alliant backsliding just as they are coming to embrace the economic upside of renewables.  

“Gas investment is the wrong direction,” said Ward.

A recent Sierra Club analysis found that Alliant could retire its last coal plant by 2026 and replace it with a smaller portfolio of storage, energy efficiency, demand response, wind and solar. Costs of operating the remaining coal units through 2030 would outweigh the plant’s revenue by $257 million, the Sierra Club said. 

Alliant told Greentech Media it may consider adding storage to its recently announced solar projects in the future if it deems the technology the best economic choice for its customers.

Some in the region would like to see the Midwest’s transition move more quickly. Both solar and wind are now more economic than new natural gas in Wisconsin. The state's governor, Tony Evers, has also proposed a goal to reach carbon-free electricity by 2050.   

“When you wait, you’re not just harming the environment; you’re harming people’s economic situation in a time when the economics are challenging,” said Josh Mandelbaum, a senior attorney at the Environmental Law and Policy Center, a Chicago-based legal advocacy group. “The transition...can and should be happening quicker than it is today.”  

Next in the Midwest’s energy transition? Storage

Alliant is among many Midwestern utilities making the switch to more renewables, and to solar more specifically.

Michigan utility Consumers Energy told Greentech Media it’s moving away from the “traditional model of large centralized generating plants” and toward more modular generation. Right now, Consumers still gets about 20 percent of its generation from coal, with 11 percent coming from renewables. But it plans to add 6 gigawatts of solar by 2040 and fill out its plan to reach net-zero carbon emissions by 2040 with the help of energy efficiency and demand response.  

“We’ve adopted a triple bottom line where we don’t just focus on profit,” said spokesperson Terry DeDoes, although he also acknowledged that the utility no longer has to make a decision “between affordable energy and clean energy.”

The Northern Indiana Public Service Company opened requests for proposals this fall seeking 2.3 gigawatts of solar-plus-storage. Minnesota-based Xcel Energy set one-time records with solar-plus-storage solicitations in 2018, which will help it meet goals of 100 percent carbon-free electricity by 2050.  

For now, big-time storage and even solar deals are still somewhat novel in the region. Though the Midwest has been a traditional wind powerhouse and is logging ever-larger solar sites, it claims few of the large battery storage projects that are becoming more common across the U.S. Southeast, Northeast and West.

The interconnection queue of the Midcontinent Independent System Operator now comprises nearly 13 gigawatts of energy storage in various stages of development, though it’s unclear how much of that total will actually get built.  

“Capacity-market clearing prices in MISO have cleared far too low in recent years to drive storage into the market,” said Dan Finn-Foley, head of energy storage research at WoodMac. “But the sheer volume of interconnection queue requests shows a definite interest in the market over the coming years.”

While Alliant isn't dipping into large-scale storage to complement its solar just yet, that may change as costs continue to drop. Ranger Power specifically said it would consider adding storage to its project if the benefits outweigh the costs.  

“Peak generation from these facilities correlates well with peak load in the area, [and] the area generation portfolio includes little solar at this point. Consequently, storage is not currently needed to shift energy off-peak,” Ranger Power President Paul Harris wrote an email. “If it becomes advantageous to have storage in the future, it can be added.”