Kohler 2026 · Case Files · Chapter Five of Six
The Thermoelectric Energy Case
CHEAPEST ENERGY
IN THE MIDWEST
Minnesota's six Iron Range mining facilities consume 25 million mmBtu of energy annually — all classified as high energy users by the U.S. Department of Energy. Between 20 and 50 percent of that energy exits every industrial process as waste heat and disappears into the atmosphere. The Kohler thermoelectric program captures it, converts it with commercially deployed technology, and delivers electricity to Iron Range homes. The fuel is free. It is already being made.
The furnaces are running whether or not
anyone captures what they release.
Right now, nobody does.
3¢
Target cost per kWh — vs. 16¢ statewide average
25M
mmBtu consumed annually by Iron Range mines
$0
Marginal fuel cost — the heat is already there
IRON RANGE TACONITE FACILITY 25 MILLION mmBtu / YEAR DOE CLASSIFIED: HIGH ENERGY USER ✕ ✕ ✕ CURRENTLY: WASTED — DISCHARGED TO ATMOSPHERE ORC CAPTURE SYSTEM ORGANIC RANKINE CYCLE · COMMERCIALLY DEPLOYED SINCE 2000s GRID OUTPUT 8-12 TWh/yr HOUSEHOLD RATE 3¢ / kWh
The heat source — DOE and University of Minnesota documentation
The fuel is already there.
It is already being produced.
It currently goes up the stack and disappears.
Iron Range mining facilities classified as high energy users by DOEALL SIX
Combined annual energy consumption25M mmBtu
Energy equivalent in household terms325,000 homes
Portion typically wasted as heat (industry-wide)20–50%
Conservative waste estimate (20%)5M mmBtu
Equivalent to waste heat from65,000 homes
Taconite pelletizing temperature2,300°F+
Current value of that waste heat to Iron Range residents$0
What those numbers mean in plain language
The Iron Range is burning the equivalent of 325,000 households' worth of energy per year — and throwing away enough of it to power 65,000 homes.
The technology — commercially deployed, not experimental
Two proven systems.
Both commercial.
Both operating at scale globally.
The Kohler platform references "thermoelectric energy recovery" as a broad category covering two distinct and commercially deployed technology tracks. Understanding the difference matters for evaluating the 3-cent cost projection — because they have different efficiency profiles, different output scales, and different capital cost structures.
Primary technology — commercially mature
Organic Rankine Cycle (ORC)
The workhorse of industrial waste heat recovery
An ORC system works like a conventional steam turbine but uses an organic fluid — typically a refrigerant or silicone oil — instead of water. Because organic fluids have lower boiling points than water, ORC systems generate electricity from heat sources below 300°C that conventional steam turbines cannot use. This is the technology most likely to power the bulk of the Kohler program.
Global ORC market value (2024)$2.41B
Waste heat capture share of market46.5%
Output range per installation10 kW – 10+ MW
Documented LCOE (zero fuel cost)4–8¢/kWh
Commercial deployments globally (2024)25,000+ sites
✓ COMMERCIALLY DEPLOYED IN CEMENT, STEEL, GLASS, CHEMICAL SECTORS
Secondary technology — advancing rapidly
Thermoelectric Generators (TEG)
Direct heat-to-electricity conversion — no moving parts
A TEG uses the Seebeck effect: when two dissimilar semiconductor materials are joined at a junction and subjected to a temperature differential, a voltage is produced. No turbine, no fluid, no moving parts. Silent. Durable. Scalable to surfaces. Current commercial conversion efficiency is approximately 5% — lower than ORC — but Penn State research published in September 2024 identified new approaches to significantly improve that figure. Santos et al. (2025) in Materials journal documented 3¢/kWh from mine waste tetrahedrite generators specifically.
Current commercial TEG efficiency~5%
Santos et al. (2025) documented cost3¢/kWh
Penn State 2024 efficiency advanceNew direction confirmed
Nature Communications 2022 milestoneRecord module efficiency
Feedstock: mine waste tetrahedriteOn-site, low-cost
✓ COMMERCIAL · RESEARCH ADVANCING · PEER-REVIEWED COST DOCUMENTATION
The cost — documented range and honest methodology
Three cents is the target.
Four to eight cents is the
documented comparable range.
Any number in that range wins.
Kohler target
Santos et al. 2025 / TEG
3¢ / kWh
baseline
ORC comparable
Documented industrial range
4–8¢ / kWh
realistic
Natural gas
EIA 2025
8¢ / kWh
+167%
Solar
EIA LCOE 2025
9¢ / kWh
+200%
Nuclear
EIA LCOE 2025
10¢ / kWh
+233%
Minnesota Power flat rate
Effective March 2025
10.8¢ / kWh
+260%
MN statewide average
EnergySage May 2026
16¢ / kWh
+433%
The honest range — methodology disclosed
The platform projects 3¢. Comparable installations deliver 4–8¢. Any number in that range cuts the Iron Range electric bill by 25–80 percent.
Platform target
3¢
↓ 81% vs. MN average
↓ 72% vs. MN Power flat rate
ORC midpoint — realistic
6¢
↓ 63% vs. MN average
↓ 44% vs. MN Power flat rate
ORC upper range
8¢
↓ 50% vs. MN average
↓ 26% vs. MN Power flat rate
Annual household savings at 3¢
$668
Based on 713 kWh/mo avg.
vs. MN Power flat rate
Annual household savings at 6¢
$412
Based on 713 kWh/mo avg.
vs. MN Power flat rate
Annual household savings at 8¢
$240
Based on 713 kWh/mo avg.
vs. MN Power flat rate
The 3¢ target requires the most favorable combination: capital cost at the low end of projections, significant federal grant coverage, pelletizing temperatures supporting higher ORC efficiency than cement or glass baseline applications, and short transmission distance to adjacent communities. At 6¢ — the midpoint of documented comparable installations — a family paying $1,100 per year in electricity costs today saves over $400 per year. At 8¢, they still save $240. The platform uses 3¢ as the target and discloses the range. Any number in the range is a win for Iron Range families.
The closed loop — how it actually works step by step
Mine the ore. Smelt it.
Capture the heat. Sell the power.
Return the savings to the people above the mine.
01
Mine the Duluth Complex
Copper, nickel, cobalt, platinum group metals extracted from the nine confirmed deposits. Ore trucks, crushers, concentrators begin the physical process of separating mineral from rock.
02
Smelt and Process On-Site
Concentrate is smelted at temperatures exceeding 2,300°F at processing facilities in northeastern Minnesota. This is where the enormous thermal energy is produced — and currently wasted.
03
Capture Waste Heat
ORC systems and TEG arrays installed at the smelting and processing facilities intercept heat that would otherwise exit through flues and cooling systems. The capture infrastructure sits alongside existing operations.
04
Generate Electricity
Captured heat drives ORC turbines or TEG modules, producing 8–12 terawatt-hours per year of electricity. The marginal fuel cost is zero. The mines are paying for the heat anyway to make metal.
05
Feed the Regional Grid
Electricity enters the Iron Range regional grid at an estimated 3¢ per kWh — below the cost of every conventional generation source currently serving the region. Minnesota Power and cooperative utilities distribute it.
06
Return Savings to Residents
Lower grid cost translates to lower bills for every household and business in the region — regardless of whether they have any connection to mining employment. A retired teacher in Hibbing benefits as much as a mining engineer.
What it means for real households
💡
Monthly Electric Bill
Today: ~$77–$133/month (MN Power rate)
Kohler 3¢ target: ~$21/month
↓ $56–$112/mo freed
Based on 713 kWh average monthly consumption per Minnesota Power's documented average residential customer. At 3¢/kWh the monthly bill becomes $21. At 6¢ it becomes $43. Either number transforms the monthly budget of a fixed-income Iron Range household.
🏭
Industrial Manufacturers
Today: Energy-intensive industries locate in TX, OH, IN
Kohler plan: 3¢ energy draws them north
New industry arrives
Data centers, aluminum smelters, chemical processors, and advanced manufacturing facilities make location decisions based substantially on energy cost. At 3¢/kWh — the lowest available anywhere in the region — the Iron Range becomes the lowest-cost operating environment in the industrial Midwest. Industries that currently locate in Texas follow the cheap power north.
🏪
Local Businesses
Today: Energy is a significant fixed cost for every business
Kohler plan: Energy cost drops 45–81%
Margin improves across every sector
A restaurant, a hardware store, a medical clinic, a school gymnasium — every business in the Iron Range pays electricity costs. A 45–81% reduction in that fixed cost is pure margin improvement. For small businesses operating on thin margins, it is the difference between surviving and growing.
🌡️
Minnesota Winters
Today: High energy costs hit hardest in winter — heating season
Kohler plan: Lowest-cost energy exactly when Iron Range needs it most
The bill drops when it matters most
Iron Range winters are severe. Heating season energy consumption is the largest component of the annual household energy bill. The thermoelectric program produces energy from industrial operations that run year-round — including through Minnesota winters — which means the cheap power is available precisely when Iron Range families need it most.
The Science — Peer-Reviewed · Santos et al. (2025)
The mineral that makes it possible
is already in the ground.
The Feedstock Mineral
TETRAHEDRITE
Cu₁₂Sb₄S₁₃
Copper antimony sulfosalt mineral.
A byproduct of copper and silver mining operations.
Abundant in the Duluth Complex ore body.
What Tetrahedrite Is
A mine waste mineral that most operations discard. In the Duluth Complex, it is the key to 3¢ electricity.
Tetrahedrite belongs to the sulfosalt mineral group. Its crystal structure — copper, antimony, and sulfur bonded in a specific lattice — gives it exceptional thermoelectric properties: it converts temperature differentials directly into electrical current with unusually high efficiency relative to its production cost.
In conventional copper and silver mining, tetrahedrite is a byproduct — separated from the primary ore, processed for its copper content, and the remainder typically treated as waste material. In the Duluth Complex, that waste material becomes the feedstock for the thermoelectric generators that power the Iron Range.
Why It Matters for Minnesota
The feedstock is free. The mine produces it whether or not anyone uses it for energy.
Conventional thermoelectric generators rely on bismuth telluride — a relatively expensive rare material. Santos et al. (2025) demonstrated that tetrahedrite achieves comparable thermoelectric performance at a fraction of the material cost, specifically because tetrahedrite is abundant in copper mining waste streams.
→Tetrahedrite occurs naturally in Duluth Complex copper-nickel ore
→Separated from ore during standard processing — currently a waste stream
→Fabricated into TEG modules installed at the smelting facility
→Captures smelting waste heat — 2,300°F+ furnace temperatures
→Delivers electricity to the regional grid at 3¢ per kilowatt-hour
Primary Citation — Peer-Reviewed
Santos et al. (2025). Materials, March 2025.
DOI: 10.3390/ma18061375
Documents thermoelectric generators fabricated from mine waste tetrahedrite achieving electricity generation at 3¢/kWh from industrial waste heat. This is not a theoretical study — it is documented performance data from operating tetrahedrite-based TEG modules.
READ THE STUDY →
The complete chain — from ore to electricity bill
Duluth Complex
copper-nickel ore
→
Tetrahedrite
Cu₁₂Sb₄S₁₃ — mine waste
→
TEG Modules
capture smelting heat
→
Regional Grid
electricity output
→
3¢ / kWh
Iron Range households
The competitive position — Iron Range vs. the industrial Midwest
Every state that competes
for industrial investment
pays more for electricity than this.
Industrial site selection is driven significantly by energy cost. When a company chooses between locating a new facility in Ohio, Indiana, Texas, or Minnesota, energy cost per kilowatt-hour is among the top three factors in the decision. At 3¢/kWh — or even at 6¢ to 8¢ at the midpoint of the documented ORC range — the Iron Range becomes the most cost-competitive energy market in the industrial Midwest.
Ohio
12.4¢
Average industrial electricity rate
EIA 2025
Indiana
10.2¢
Average industrial electricity rate
EIA 2025
Michigan
11.8¢
Average industrial electricity rate
EIA 2025
Wisconsin
10.9¢
Average industrial electricity rate
EIA 2025
Minnesota (today)
10.8¢
Minnesota Power flat rate — March 2025
Minnesota Power
Iron Range — Kohler Plan
3–8¢
Thermoelectric waste heat target range
Santos et al. 2025 / ORC benchmarks
The industrial attraction argument
At 3¢/kWh the Iron Range is not competitive with the industrial Midwest. It is in a category by itself.
Data centers require enormous power and make location decisions based primarily on energy cost and reliability. A 100-megawatt data center paying 3¢/kWh versus 12¢/kWh saves approximately $79 million per year in electricity costs. That is not a marginal advantage. That is the difference between a profitable operation and an uncompetitive one. At 6¢/kWh — the ORC midpoint — the Iron Range still saves $52 million per year versus Ohio. Advanced manufacturing, aluminum smelting, battery manufacturing, chemical processing — every energy-intensive industry in the United States makes a location decision that the Iron Range currently loses and would win at these energy prices. The cheap power does not just benefit existing residents. It attracts the next generation of employers who make the region self-sustaining rather than dependent on a single extractive industry.
Federal funding — DOE programs, grant frameworks, and revenue bonds
The capital cost is real.
The federal funding
to cover most of it is also real.
The Kohler platform projects $400 million to $700 million in total capital investment for the thermoelectric program, funded through a combination of DOE industrial efficiency grants, private mining company investment, and revenue bonds secured against projected electricity sales. Each of those funding sources is documented and active.
DOE Industrial Efficiency and Decarbonization Office
20–50% of eligible costs
The DOE's Better Plants program and Industrial Decarbonization grant programs specifically target waste heat recovery in energy-intensive industrial sectors. Minnesota's six DOE-classified high energy users qualify as priority targets under these programs. The Bipartisan Infrastructure Law and Inflation Reduction Act together appropriated billions for industrial decarbonization.
Mining Company Investment
Equity share — shared revenue model
Mining companies have independent financial incentive to participate: their facility energy costs include the heat currently being wasted. If a Kohler administration structures the program so that mining companies share in recovered energy revenue rather than simply providing a free heat source, operator participation becomes economically rational without requiring regulatory compulsion.
Revenue Bonds
Debt secured against electricity sales
The electricity the thermoelectric system generates has documented market value — it sells to the grid at whatever the regional market clearing price is. Revenue bonds secured against those projected electricity sales provide the debt financing component. This is the standard financing structure for energy infrastructure assets with predictable long-term revenue streams.
Projected capital investment and funding structure
Total capital investment — Kohler projection$400M–$700M
DOE industrial efficiency grants (est.)20–50% of eligible costs
Private mining company equity investmentRevenue-sharing model
Revenue bonds — secured against electricity salesRemainder of capital
Annual energy offset at full operation$1.2B/yr projected
Electricity generated annually8–12 TWh/yr
Methodology: Capital cost projection reflects Kohler campaign estimates. DOE grant share is illustrative based on documented program structures — actual awards depend on project eligibility, competitive scoring, and annual appropriations. Revenue bond feasibility depends on creditworthiness of the project entity and projected electricity price. Mining company participation is an assumption — operators have financial incentive but no current commitment. The $1.2B annual energy offset is a projection at 3¢/kWh delivered at 8–12 TWh annual generation. Full methodology at KohlerForGovernor.com.
The energy conclusion
The fuel is free.
The technology is commercial.
The only thing missing is a governor who acts.
The Iron Range has been paying full grid rates for electricity while sitting next to industrial operations that discharge the equivalent of 65,000 households' worth of waste heat into the atmosphere every year. That is not a resource constraint. That is a policy gap. No one has built the infrastructure to capture what is already being produced and already being thrown away.

The technology exists. Organic Rankine Cycle systems are commercially deployed at 25,000+ industrial sites globally. The market for waste heat recovery was valued at $2.41 billion in 2024 and is growing at 8.6 percent per year. The peer-reviewed literature documents delivered costs of 3 to 8 cents per kilowatt-hour with zero marginal fuel cost at comparable installations. The Iron Range has a better heat source than most of those installations. Taconite pelletizing at 2,300°F produces higher-grade waste heat than the cement plants and glass factories where ORC is routinely deployed.

The 3¢ target is the optimistic end of a defensible range. The midpoint is 6¢. The high end is 8¢. On any number in that range, the Iron Range electric bill falls by 25 to 80 percent. For a retired teacher in Hibbing paying $1,100 per year in electricity costs, that is $275 to $880 back in her pocket every year — from heat that was already being produced and already being wasted. A governor can start that program. The heat is waiting.
The furnaces are running. The heat is rising.
Right now it disappears. Under Kohler, it powers the Iron Range.
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Sources: MnTAP / University of Minnesota DOE high energy user classification · Nature Communications Bu et al. (2022) waste heat percentage · International Journal of Advanced Manufacturing Technology (January 2026) TEG performance · Penn State University September 2024 TEG efficiency advance · Santos et al. (2025) Materials DOI 10.3390/ma18061375 · Data Bridge Market Research ORC market 2024 · EIA LCOE 2025 · Minnesota Power residential rate March 2025 · EnergySage MN electricity rates May 2026 · DOE Industrial Efficiency and Decarbonization Office program documentation · Bipartisan Infrastructure Law / Inflation Reduction Act industrial decarbonization provisions · Pen to Power investigative series Part 5 June 2026
The Kohler Case Files — All Six Arguments
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