An Open-Ended Renewables RFP in Minnesota Funds Biomass and Innovative Wind Applications

Xcel's Renewable Development Fund (RDF) in Minnesota announced the results of its first solicitation in early 2002. With over $9 million to spend on "commercial" projects, the solicitation sought grant requests from a variety of renewable technologies. Innovative Features The outcome of this solicitation in terms of megawatt-hours of renewable energy actually delivered will remain unclear for some time. Nonetheless, several interesting features of the solicitation bear mention:

• the solicitation was open and relatively unstructured in an attempt to attract a wide variety of creative and effective project proposals;
• the program administrator specifically gave weight to biomass proposals and innovative, smaller-scale wind applications that might otherwise not compete with larger-scale projects; the Fund developed an explicit method to compare the cost-effectiveness of proposals that were received; and
• the Fund selected projects that were deemed to have a reasonable chance of obtaining a long-term power purchase agreement from the local utility to improve chances for project completion.

Results

• The RDF received 28 proposals for commercial projects. The Board ultimately selected 8 projects – three biomass, one hydro, two solar, and two wind. If these projects come to fruition, the total funding of $9.8 million could result in 12 MW of new renewables capacity.
• This is a reasonably high level of funding per MW installed. But it must also be remembered that RDF focused on smaller-scale, innovative projects to ensure a large number of winning bidders and a mix of renewable technologies. The program, for example, has funded several biomass digestion projects, a school-based wind project, and a "cooperative" wind project.