After hitting the 10% level required by law, Michigan’s two major utilities appear to be throttling back on adding new renewable energy sources now that they can set their own pace for becoming greener.
That means ratepayers for DTE Energy and Consumers Energy will likely see stable monthly bills in the near future. But those desiring more local action to reduce greenhouse gas and address global climate change may be in for disappointment.
“DTE and Consumers Energy have kind of reduced to a crawl new renewables coming online,” said James Clift, policy director at the nonprofit Michigan Environmental Council. “They really have stagnated these programs at a time when we’re at record low prices in Michigan for renewable energy.”
The council, a coalition of about 70 organizations, insists that Michigan right now could handle at least a 20% renewable-powered grid and likely more without big technical hurdles, he said. Utility company representatives say there is indeed a limit to how much renewable energy the grid in its current shape can handle and store, but they declined to cite a figure or estimate for that ceiling.
DTE and Consumers strongly dispute the notion that they are de-emphasizing renewables – even if their pace of adding extra output from additional renewable sources may slow from what it was.
“Renewable energy investment in Michigan by Consumers Energy has proceeded at an expedited and reasonable pace,” said Dan Bishop, director of media relations for the utility. “Even though we’ve met the 10% requirement, we continue to make investments because we know that many of our customers want to see more renewable energy development.”
All Michigan utilities were required to install or contract enough power from wind, solar, biomass or hydroelectric sources to hit a 10% renewables target for power produced by last year, under a 2008 state law. They succeeded in jumping from 3% to 10%.
With that mission now accomplished and no further state mandates, DTE and Consumers say they intend to keep adding renewable energy to their portfolios, but at what appears a more modest pace.
DTE says it anticipates raising its capacity for renewable energy to about 13% of its own energy portfolio by 2020.
Consumers Energy also plans to expand its use of renewables, which currently account for about 11% of the utility’s portfolio, a spokesman said. But Consumers declined to specify a renewables projection or goal.
The slower pace in adopting more renewable energy has drawn concern from some environmental groups that say Michigan needs a more urgent shift away from fossil fuels-based energy to help avoid the worst scenarios of global warming. They point to states like Iowa that have far higher renewable energy use.
Those who believe in manmade global warming and view it as a problem say the outlook is increasingly dire.
An Environmental Protection Agency report released last month said the average annual global level of carbon dioxide – the most important greenhouse gas for trapping heat – recently exceeded 400 parts per million for the first time in at least 800,000 years. And last year was the warmest year on record across the globe.
DTE’s Dave Harwood, director of renewable energy, said costs to ratepayers is also important when considering renewables.
He noted how achieving the state’s 10% mandate involved adding surcharges to customers’ bills that were $3 a month for residences, about $17 a month for businesses and over $185 a month for industrial users. Those surcharges have since disappeared, and DTE’s future plans for renewables don’t call for them, he said.
“The 10% mandate wasn’t free – that came at a significant cost,” Harwood said. “As we look going forward, we want to make sure that we balance the increase in our renewable mix with customer affordability and grid reliability concerns.”
DTE disclosed in a recent report for investors that by 2030, renewables could range from 15% up to 30% of its energy portfolio. Harwood said the determining factors could include renewables’ future cost and local opposition to building more wind turbines in the Thumb.
There is pending legislation in Lansing that would repeal the hard 10% renewables mandate and replace it with a “goal” of meeting at least 35% of Michigan’s electric needs by 2025 through renewable energy as well as improved energy efficiency.
The bill, sponsored by Sen. Mike Nofs, R-Battle Creek, chairman of the Senate Energy and Technology Committee, carries no penalty if the goal is missed. However, there has lately been talk of possibly keeping the existing mandate for renewables and raising it “a couple percentage points” by 2018 to gain more Democrat support.
The legislation follows the unveiling last year of Gov. Rick Snyder’s clean energy goal for Michigan to achieve 30% to 40% of its power by 2025 through natural gas, improved efficiency and/or renewable energy. His staff have said hitting the minimum 30% goal could likely be achieved by just adding natural gas and anticipated improvements in energy efficiency, without a need to build more renewables.
State voters in 2012 overwhelmingly rejected a ballot proposal that would have required Michigan utilities to get 25% of their power by 2025 from renewable energy. Both utilities opposed the measure, citing, among other reasons, the inflexibility and unprecedence of a mandate that would have been written into the state’s constitution.
Industry experts say that adding renewable energy is still more expensive than natural gas, despite big prices drops in recent years for renewables and tax credit programs. Among renewables, wind power in Michigan is presently much cheaper than adding solar power, although solar could potentially achieve price parity with wind in the 2020s.
DTE and Consumers Energy have also been adding natural gas capacity to reduce their reliance on coal power – a major source of heat-trapping carbon dioxide. Low natural gas prices and tighter federal regulations on coal power have been driving that shift.
Coal plants produce about twice as much carbon emissions as natural gas. However, natural gas extraction commonly results in the release of methane, which is a more potent greenhouse gas but disappears from the atmosphere much faster.
Proponents of renewable energy point to states such as Iowa and Hawaii that have added a large percentage of renewables to their energy portfolios. Wind last year provided 31% of Iowa’s total electricity generation, a bigger share than any other state. Hawaii got nearly 30% of its power from solar and is officially aiming for 100% renewables by 2045.
Further afield, Germany satisfied nearly all of its power demand from renewables on a Sunday afternoon this past spring.
“The biggest barrier right now feels like the utilities want business as usual,” said David Konkle, board president of the Great Lakes Renewable Energy Association.
Irene Dimitry, DTE’s vice president of business planning and development, said the fickle nature of wind power and solar power remains a hurdle to making renewables a large percentage of an energy portfolio. There is a need for base load power sources, such as natural gas, to supply electricity at all hours of the day.
“We get energy from the sun and the wind when the sun is shining or the wind is blowing,” Dimitry said. “When it’s not, we have to rely on other sources. So that’s why not all renewables.”
But Michigan still has a lot of room to ramp up renewables before it encounters such storage or grid issues, according to Liesl Clark, president of the Michigan Energy Innovation Business Council, a trade association.
Clark, previously an energy policy adviser to then-Gov. Jennifer Granholm, estimates that Michigan could increase renewables to about 35% of its energy portfolio without requiring a grid overhaul.
“There is really not much of a technical ceiling,” Clark said. “Other parts of the country have gone further.”
Future renewable projects:
• Will buy power from the coming 100-megawatt Apple Blossom Wind Park in Huron County.
• Will break ground next year on phase II of Cross Winds Energy Park in Tuscola County, a $250-million project.
• Recently opened a 3-megawatt “solar garden” at Grand Valley State University and a 1-megawatt solar garden at Western Michigan University
• Will open a 51-megawatt Pinnebog Wind Park in Huron County by the end of the year.
• Plans to open a 50-megawatt solar project spread across two sites in Lapeer and one in Detroit in 2017.
Current Michigan sources of renewable energy:
• 61% wind
• 15% hydro
• 13% biomass, including wood burning
• 6% landfill gas
• 3% municipal solid waste
• 1% solar
Source: A presentation by Michigan Public Service Commissioner Norman Saari for Bloomberg news.
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