11-04-2024 Special JDA Agenda Packet

Home Browse Search

28 • Using biogas or green hydrogen to address hard-to-electrify loads Each of these options has varied implications for carbon accounting and REC ownership and different levels of value regarding resilience, environmental justice, and additionality (making an impact that would not have happened otherwise). 7. Opportunities and Considerations 7.1. Xcel Geothermal Pilot Xcel Energy is seeking innovative pilot projects to reduce their natural gas system emissions. A key focus is a ground source geothermal heat pump pilot project, up to 500 tons, to serve a multi-use development. Pending approval of the Natural Gas Innovation Act (NGIA), Xcel will initiate a siting analysis to identify potential pilot locations. Comprehensive feasibility studies will then evaluate environmental and construction challenges, load diversity, geothermal wellfield size, and drilling accessibility to select the optimal site. NGIA approval is expected by late 2024, with a potential pilot location identified by mid-2025. Rice Creek Commons appears to align well with the focus of this pilot, and the project team is tracking this potential opportunity. A challenge is the NGIA flat energy rate for buildings that are part of the pilot, which means those customers would pay much lower energy bills than other buildings. To mitigate energy costs disparities and maximize the pilot project’s compatibility with the goals of Rice Creek Commons, connecting the affordable housing buildings to the pilot is a potential solution. Another option would be for the Xcel pilot to feed into a broader district energy network serving RCC. This would eliminate the rate disparity concern and would make Xcel’s energy available to all district energy system customers at RCC. 7.2. Potential Funding Sources The analysis included Inflation Reduction Act (IRA) funds, which reduce applicable capital costs by 40%. These funds are available in the form of rebates for eligible capital costs. The Minnesota Climate Innovation Finance Authority (MNCIFA) could potentially provide bridge funding for upfront costs before the rebates come in. While the IRA is currently the major funding reduction available, additional funding sources could become accessible before construction is scheduled for 2027. 8. Emission Analysis Once the community is fully developed in 2030, Scenarios 1, 2, and 3 are estimated to generate less annual carbon dioxide (CO2) emissions than the Business-as-Usual Scenario. Specifically, Scenario 1: District Energy – Entire Development is estimated to generate 83% less annual carbon dioxide (CO2) emissions than the Business-as-Usual Scenario, Scenario 2: District Energy – Town Center is estimated to generate 82% less annual carbon dioxide emissions than the Business-as-Usual scenario, and Scenario 3: Decentralized Geothermal is estimated to generate 79% less carbon dioxide emissions than the Business-as-Usual scenario. These savings come from eliminating fossil fuel use, constructing high-performance buildings, and using an alternate energy system (the technologies modeled in Scenarios 1, 2, and 3).