PELICAN RAPIDS, MINN. – The wind turbine and small solar array planted in a cornfield near this northwestern Minnesota town look modest. But the hybrid power plant could be a new frontier for renewable energy.

By capturing both sun and wind power, it can provide a more stable supply of electricity than either energy source can provide alone. And given its small size, it is relatively easy to hook into the electricity grid.

"It delivers low-cost clean energy right to where the power is being consumed, and it leads to the retention of energy dollars in the community," said Dan Juhl, the Minnesota renewable-energy pioneer whose company developed the project.

Renewable-energy analysts said it makes a lot of sense.

"The Juhl development is interesting and unique in its integration on the same site," said Brian Ross, senior program director at Minneapolis-based Great Plains Institute, a nonprofit energy research group. "I think this hybrid model is something the industry is going toward on both a small scale and large scale," Ross said. And that includes hybrids that include batteries to store power.

But there are significant challenges. Small projects like Juhl Energy's can be a harder sell to electric companies than big ones, with the latter having the advantages of scale.

Juhl's own experience seems a case in point. Along with the Pelican Rapids project, he has proposed a community wind-solar hybrid in the northwestern Minnesota town of Red Lake Falls. That $10 million project has yet to be built, tied up first before Minnesota utility regulators and now in federal court.

The nearly $5 million wind hybrid south of Pelican Rapids, owned by an affiliate of Juhl Energy, started producing electricity in March for Lake Region Electric, a rural co-op in Pelican Rapids owned by its customers.

Juhl founded Chanhassen-based Juhl Energy and remains its chairman, though he retired as CEO in 2018. He has been building wind farms since the late 1980s, specializing in smaller or "community" projects.

He had long been intrigued by a wind-solar combination and around 2015 he discovered that General Electric was developing a promising hybrid technology.

"There was some synergy there," said Steve Bravo, a product manager in Schenectady, N.Y., for GE Renewable Energy, an arm of General Electric.

Bravo and others at GE were working on a hybrid that mitigated the need for a solar "inverter," a critical and expensive piece of equipment. "That is what is unique about this project," Bravo said.

An inverter converts direct current (DC) produced by solar panels into alternating current (AC) that powers the grid. A wind turbine has a converter that also transforms DC into AC.

In the GE hybrid, "there's a single point of conversion for solar and wind, and that's the value of it," Juhl said. Capital costs are reduced, and other savings are gained from routing wind and solar energy through the same system.

Lake Region Electric has a 20-year contract to purchase power from the Juhl hybrid. It is cheaper power than the electricity the co-op buys from its main supplier, Maple Grove-based wholesale cooperative Great River Energy.

"We think this project will save us $150,000 a year," said Tim Thompson, CEO of Lake Region, which serves 27,000 customer-members.

Lake Region had previously built two small solar projects and they sold out quickly. "That's a pretty good indication our members are interested in renewable energy, and they are expecting us to do more," Thompson said. "But they don't want to pay more."

The hybrid's key advantage "is the ability to harness both wind and solar," Thompson said. "By having both, there is a much steadier production of energy."

The problem with wind and solar power is their variability. But by combining the two, that unevenness can be partly smoothed out. Solar power, even on cloudy days, is relatively predictable and is produced during peak daytime hours for power use. The wind can blow anytime depending on the weather, often more so at night.

"They balance each other out so you get a higher overall capacity [factor]," said GE's Bravo.

Small rural co-ops good bet

Retail electric co-ops like Lake Region can be a good market for community hybrids, up to a point.

"Most co-ops buy a good chunk of energy from wholesale co-ops, but they are usually allowed some amount of their own power generation, and historically they haven't used it," said John Farrell, director of energy democracy at the Minneapolis-based nonprofit Institute for Local Self-Reliance.

For instance, Lake Region and other members of Great River can produce up to 5% of their own power.

The wind-solar plant serving Lake Region has a generation capacity of 2 megawatts, while the planned hybrid for Red Lake Falls would be 5 megawatts. To put that in perspective, large wind and solar farms start at 100 megawatts.

But renewable-energy projects of 5 megawatts or less can be fast-tracked through the grid-approval process in a matter of months, Juhl said. Larger projects can take a couple of years.

"Big projects need transmission access, and there's not a lot of that left in Minnesota," Farrell said. It has already been absorbed by existing wind and solar farms.

However, "there's a lot of capacity to plug in these [smaller] projects," Farrell said. Indeed, the Pelican Rapids hybrid bypasses the high-voltage transmission network altogether, connecting directly into Lake Region's distribution system.

Complications arise

The Red Lake Falls project that is in limbo actually was Juhl's first hybrid proposal.

Juhl grew up in Red Lake Falls and lives there now after several years in southwestern Minnesota. "I wanted my community to have its own sustainable power plant," he said.

Juhl Energy developed the Red Lake Falls project with GE technology, and then sold it as part of package deal in 2017 to New York-based Con Edison Development, a large owner and operator of renewable energy projects.

Then a dispute arose between ConEd and Fergus Falls-based Otter Tail Power — an investor-owned utility that provides power for Red Lake Falls — over how much Otter Tail would pay for electricity from the Red Lake Falls hybrid.

ConEd filed a complaint with the Minnesota Public Utilities Commission (PUC), which in May 2018 came down with a ruling against the New York company.

In June, ConEd sued the PUC in U.S. District Court in Minnesota for allegedly violating the federal Public Utilities Regulatory Policies Act (PURPA), which governs electricity sales from small power producers to utilities. The PUC has asked that ConEd's complaint be dismissed.

There is often an "inherent tension" between investor-owned utilities and small power projects, Farrell said.

Investor-owned utilities are usually looking to add large chunks of renewable energy through bigger projects, often with an ownership stake that allows them to get a return on their investment.

As for large hybrid projects, they appear to be in the drawing-board stage.

"I think lots of developers are looking at wind projects where they can add solar," said Beth Soholt, executive director of Clean Grid Alliance, a St. Paul group that represents wind and solar developers and renewable-energy advocates.

But currently there is a lack of clear rules from the Midwest's electric grid operator on integrating wind-solar hybrids, she said.

"There is a lot of anticipation for these projects," Soholt said. "But right now there are limited opportunities."

Mike Hughlett • 612-673-7003