As Michigan approaches a key deadline for the implementation of renewable energy across the state, a new draft report shows the utilities should have no problem complying with the mandates.
The bonus: The cost of that renewable energy is cheaper than originally expected.
A draft report from the Michigan Public Service Commission shows that since the passage of a renewable portfolio standard (RPS) in 2008 that called for 10 percent of energy produced in the state to be sourced from renewable energy sources by 2015, utilities and developers have installed or are in the process of installing 1,400 megawatts of renewable energy.
“The 2015 goals are expected to be met in nearly all cases,” the MPSC stated in the report.
More importantly, the report also found that it would be technically possible to increase the RPS target to 30 percent or higher and still meet the standard with energy produced in the state.
Another key finding in the MPSC report: The cost of wind energy, the lowest-cost renewable resource, has been cut in half from more than $100 per megawatt-hour (MWh) in 2009 to $50 to $60 per MWh today. Wind accounts for nearly 94 percent of the renewable energy produced in the state, according to the report.
In analyzing the current energy environment in the state using U.S. Energy Information Administration data, the MPSC found the levelized cost of a conventional natural gas plant was $67 per MWh, $108 per MWh for a nuclear plant and $136 per MWh for a coal-fired plant with carbon capture technology.
The use of levelized cost compares dissimilar resources based on life cycle costs.
The report was the first of four energy-related studies that Gov. Rick Snyder requested from the MPSC covering renewable energy, energy efficiency measures, electric choice and other energy-related developments. The MPSC plans to release three more drafts before issuing a final report in November.
While the findings are encouraging, the report also shows that Michigan is falling behind the curve in renewable energy adoption. Michigan’s RPS isn’t as aggressive as the standards adopted by 29 other states. With the exception of Michigan and Wisconsin, all the other states with renewable energy mandates have targets higher than 10 percent, the report stated.
But one local program wants to ensure that the energy conversation continues to progress in West Michigan.
Banking on the support of local, sustainably driven companies, the West Michigan Environmental Action Council (WMEAC) is launching what is likely the first of many regional planning initiatives aimed at encouraging strategic and sustainable energy projects.
With cheaper, more cost-effective renewable energy systems coming online around the state, WMEAC’s leaders want to bolster the energy planning conversation in West Michigan. Its goal is for West Michigan to be a leader in developing opportunities and pilot projects in the clean energy sector and pushing for their adoption.
Along with partners at Grand Valley State University, WMEAC is hosting its first Energy Leaders Forum on Tuesday, Oct. 15 at GVSU’s Alumni House in Allendale.
“Over the long-term, we’re looking at this as a sort of capstone initiative,” said Nick Occhipinti, policy and community activism director for WMEAC. “The idea here is that we solicit leadership not only for projects but for developing opportunities going forward.”
The forum will give energy leaders a chance to share information, hone in on specific local energy issues and identify opportunities that could be worth pursuing. It will also give participants a chance to talk about their project-based ideas with energy experts, other entrepreneurs and local officials.
The organizers expect the forum will produce several workgroups made up of people working on like-minded projects. By providing a venue for people to come together, the forum should help accelerate clean energy development, said Rachel Hood, executive director of WMEAC.
In part, Hood said the forum aims to tap into the growing entrepreneurial mindset in West Michigan. The partners want the forum to act as a catalyst for energy-focused entrepreneurs to pair up with smaller, more nimble municipal utilities to work on clean energy-related pilot projects, she said.
Drawing inspiration from programs such as Start Garden, the Energy Leaders Forum will allow representatives from about eight energy-related projects to present in an idea pitch format to garner more interest, Occhipinti said.
“Obviously, there are a number of sustainable business leaders in the region, and we want to attract companies to keep pushing the ball forward on this type of innovation,” he said. “The kind of leadership we have with the (West Michigan) Sustainable Business Forum is incredible, and we want to capitalize on that.”
For example, it was no accident that the advanced battery industry sprouted up in West Michigan, Occhipinti said. Companies across the region are knowledgeable and know how to innovate when they see opportunities, he said.
Coupled with the chance to leverage other local assets, such as Muskegon’s deep-water port, the region could be a leader in clean energy development, Occhipinti said.
The MPSC report and the Energy Leaders Forum are debuting as the state energy conversation is at somewhat of a crossroads. Natural gas prices remain historically low as the cost of coal-fired energy generation is rising, the perpetual debate over electric choice has the potential to change the energy playing field, and persistent barriers — ranging from the lack of a statewide energy ordinance to laws that discourage distributed generation — continue to hold back energy developments.
Many industry groups and the Snyder administration continue to advocate that energy efficiency is the best “no regrets” strategy to help address Michigan’s energy future, but energy users are slow to implement those measures in an era when energy remains comparatively cheap.
However, the planners of the Energy Leaders Forum say they don’t want to get bogged down in those residual debates. Rather, they want to stoke the creative fires of entrepreneurs, municipal leaders and others in the region to collaborate on projects that would support providing clean energy for West Michigan.
“We don’t want to get into energy choice, natural gas or some of those other issues right now,” Occhipinti said. “What were trying to do is take a piece of that larger conversation and focus on building leadership and identifying potential projects.”