City Council approves support for Towerside District Energy System

September 24, 2021

The Minneapolis City Council has approved a $2 million loan to the Towerside Innovation District to support the construction of an aquifer thermal energy storage (ATES) district energy system for heating and cooling buildings. This innovative district energy system will reduce carbon emissions, and represents one effort among many that the City is making to combat climate change.

The Towerside Innovation District has been developed over the last decade as a collaboration among the cities of Minneapolis and Saint Paul, and many other civic, business, and nonprofit partners, as a place to demonstrate sustainability and resilience through technology, partnership, and community-building. The project will be initiated in Prospect Park, with the potential to be deployed to dozens of current and planned buildings in the area.

“This project is a first of its kind in our region and represents an innovative approach to building a decarbonized future. These forward-looking projects also highlight the real world impact of investing in new green technology,” said Mayor Jacob Frey. “It will take strong partnerships like this one with the McKnight Foundation, Ever-Green Energy, The Wall Companies and the Towerside Innovation District to continue making meaningful progress on our shared climate goals.”

Natural gas is currently the largest source of greenhouse gas emissions in the City of Minneapolis, according to the City’s greenhouse gas emission inventory. While emissions from electricity and road transportation are falling, emissions from natural gas are not. Shifting building heating and cooling to rely on carbon-free geoexchange and electricity reduces fossil fuel dependence, lowers carbon emissions, and sets the example for other buildings and communities to adopt similar approaches.

“The action the Council took today shows that we meant what we said when we declared a climate emergency and committed the City to bold, aggressive action to fight climate change,” said Council Member Cam Gordon. “I’m optimistic that this will become a replicable model, and that large-scale developments not just in Minneapolis but all around our region will use this kind of green approach to heating and cooling buildings.”

A net-zero plan for Towerside has been studied by the Towerside partnership since 2012, initially identified as part of a slate of neighborhood-scale sustainability and resilience projects. Saint Paul-based Ever-Green Energy provided the technical and engineering leadership to the project.

“Innovative community projects require leadership from determined champions and creative collaboration by the stakeholders. Reaching this milestone has taken nearly a decade of diligence, problem-solving, and discovery with a strong coalition of partners. Together we are creating a sustainable solution for this community that can be replicated across many others, who will benefit from the persistent dedication to making this vision a reality,” said Ken Smith, President and CEO of Ever-Green Energy. 

The subordinate loan approved today from the City’s Common Bond Fund reserve supplements over $11 million in public facilities bonds, and is being supplemented with private foundation support. Over the life of the system, it is estimated to save at least $21 million in carbon emissions, applying the City’s adopted Social Cost of Carbon. More details on the project can be found on the Request for Committee Action.

“The Towerside district energy project demonstrates the power of a community vision for urban redevelopment,” said Diane Rucker, board chair of the Towerside Innovation District. “This is a strong move toward an equitable, resilient and climate-protecting system for the City of Minneapolis, and has been realized through a creative partnership of the City, the developer, the community and the McKnight Foundation.”

The first phase of the system will serve the Wall Companies Malcolm Yards development, a 143-unit market rate building with up to 30,000 square feet of commercial space and a 142-unit, 100% affordable, rental housing building, as well as a proposed office building. Wall’s commitment to a sustainable development was significant to moving the project forward.

“The Wall Companies is excited to be part of this innovative project, and grateful for the commitment from the project partners, including the City, McKnight, Evergreen Energy and the Towerside Innovation District,” said John Wall, president of the Wall Companies.

About aquifer thermal energy systems

The ATES system uses aquifers deep underground as a thermal “battery,” storing heat in the summer to be used in the winter, and vice versa. Buildings connect to a low-temperature water loop and use electric heat pumps for heating and cooling. This allows any connected building to be fully electric, which is difficult to achieve otherwise in a cold climate. The system will save energy and carbon emissions from the start, and those savings will grow as the carbon intensity of the electricity grid continues to fall. While ATES systems are used extensively in Europe, this would be the first such system in Minnesota.