Energy Transition in Rural America (Spring 2022) - Great River Energy, ACES, & NRCO

By Hannah Dunn, Dillon Ackerman, and Jiaqun Wang

*Great River Energy Headquarters in Maple Grove, MN (Photo by: Great River Energy)*

Cooperation Among Cooperatives

All cooperatives are built on a core set of seven guiding principles which guide electric cooperatives put the needs of their member-owners first. One of the guiding principles is cooperation among cooperatives. When describing this sixth principle, the National Rural Electric Cooperative Association (NRECA) says “by working together through local, national, regional and international structures, cooperatives improve services, bolster local economies, and deal more effectively with social and community needs.” During our visit at the Great River Energy (GRE) headquarters, our class learned about how GRE (a generation and transmission cooperative), ACES (an energy management company), and the National Renewables Cooperative Organization (NRCO, a renewable energy services organization) all work together to fulfill their missions. These three organizations are the embodiment of guiding principle six.

We had the opportunity to hear and learn from Mark Fagan (Vice President and Chief Corporate and Member Services Officer of GRE), Jason Painter (Senior Vice President & Chief Strategy Officer at ACES), and Todd Bartling (Vice President of Renewables Development at NRCO). It is an exciting time in the cooperative world with new opportunities and innovations for transitioning the energy sector in rural communities.

Great River Energy - Generation and Transmission Cooperative

*Mark Fagan, Vice President and Chief Corporate and Member Services Officer of GRE, presents to the class*

Great River Energy (GRE), a generation and transmission electric cooperative, serves 28 member electric cooperatives, comprising 725,000 members, and serving 1.7 million people with over 3,000 MW of generation capacity and 4,600 miles of transmission lines. GRE particularly embraces the duty of cooperation amongst cooperatives, looking consistently to provide member cooperatives with competitive rates, a stable rate forecast, reliability, and environmental stewardship.

While GRE owns the generation and transmission assets, member cooperatives own and are responsible for their electric substations and distribution lines. GRE continues finding value for its members in their actions, helping cooperatives improve integrated energy systems to reflect new trends (shifting from a one-way flow of electricity to a two-way flow). Improving the infrastructure for two-way electricity flow can greatly expand distribution cooperative capacity to grow their own distributed generation as legacy power plants step aside in favor of distributed generation.

Historically, coal-powered generation has made up a large portion of GRE’s generation. Coal continues to have a specific value to GRE during its transition in the form of an “energy hedge.” Since coal is a dispatchable generation resource, coal plants could remain operational in order to run during peak demand times to reduce the amount of peak cost electricity purchases. However, looking to the future, GRE has made a decision to move away from central station coal as a market hedge. This shift is greatly driven by GRE’s exploration of other energy resources.

GRE is a leader amongst electric cooperatives in their own shift to variable, renewable energy, and is also leading the search for new opportunities that can perform effective load management to align with variable generation output (primarily from wind energy). While current load management strategies involve curtailment (output restriction or reduction) of wind resources at times of high generation and low market demand, GRE is looking for ways to reduce the amount of “loss” that results from excess generation output at low demand times. One technology that GRE is beginning a pilot project on is an “Iron Air” battery, developed by Form Energy. This technology allows multi-day storage of generated energy and is a mechanism for GRE to reduce market exposure associated with multi-day weather events that reduce wind generation.

ACES - Energy Services Company

*Jason Painter’s presentation on the visit.*

ACES is a U.S. nationwide energy management company. The company began its operation in 1999 in Indiana and scaled up in the following decade. ACES provides energy risk management services for 22 members and over 50 customers. Members are electric cooperatives and include Great River Energy, North Carolina Electric Cooperative, and Golden Spread Electric Cooperative.

The total peak load of members and customers is over 55,000 MW, and the total peak generation of the members and customers is over 50,000 MW. ACES offers several energy risk management and trading services. These services include hourly/term trading, fuels, portfolio strategy, environmental, transmission, origination, portfolio modeling, and other energy-related services. Members and customers can choose a specific combination of services or use individual services. These services help cooperatives navigate the challenges and complexities of the electricity sector. ACES takes pride in shifting and adjusting their services to meet members’ needs and are heavily focused on how their expertise can bring value to their members.

Jason Painter, who serves ACES as their Senior Vice President, presented to our class during our GRE headquarters visit. He described in detail how ACES operates as a national energy management company. He believes the advantage of the ACES business model is that the company is owned by non-profit entities and does not trade any energy for itself. They are active in U.S. electricity markets as a member- and customer-focused company and help their members and customers maximize resources. ACES has an experienced team capable of trading various commodities (including power, natural gas, coal, emissions, nuclear, oil) on the national market. ACES is deeply involved in GRE's energy portfolio. The company plans to add 5-10 members in the future and develop a weather-led risk management model for renewable energy. ACES is also planning to establish a life-cycle portfolio for real-time energy trading and resource planning.

Though not a cooperative themselves, ACES is heavily invested in the cooperative model and strives to embrace guiding principle six - cooperation among cooperatives - by working closely with cooperatives, like GRE, to achieve their visions and goals.

National Renewables Cooperative Organization - Renewable Energy Services Organization

National Renewables Cooperative Organization (NRCO) is a nation-wide organization, formed by cooperatives coming together to facilitate solving the challenge of renewable energy development and deployment. Of the three organizations we learned about during our visit, NRCO is the newest. In 2008, it was created to empower the clean energy transition for America’s cooperatives. Fifteen electric cooperatives across the U.S. came together to form this organization. The initial founders recognized that, at the time, renewables were uneconomical but full of potential. Widespread adoption across the country was possible and NRCO positioned themselves to help renewable energy meet that potential.

Today, 21 members make up NRCO. The organization focuses on how to meet the needs of these members, as well as the needs of non-member customers. GRE is one of the members of NRCO and benefits from the renewable energy services company creating innovative solutions to adapt to technology advancements, to understand the ever-evolving federal and state policies, and to implement infrastructure projects.

During our GRE headquarters visit, Todd Bartling (Vice President of Renewables Development) emphasized that the functions of NRCO are to serve its members and that the organization has to consistently re-evaluate whether or not their services are meeting members' needs.

Paving the way

This cooperation among cooperatives and organizations will pave the way for the much-needed energy transition in rural Minnesota (and America).