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Sunday, 21 July 2013 22:00

Q&A: Dan Scripps, Michigan Energy Innovation Business Council

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Dan Scripps Dan Scripps COUTESY PHOTO

 

A firm believer that Michigan can continue to see economic benefits from the advanced energy industry, Dan Scripps serves as president of the Michigan Energy Innovation Business Council (EIBC) and the Institute for Energy Innovation. A former state representative who authored the state’s revolving loan fund for renewable energy and energy efficiency, Scripps has the EIBC focused on providing support to and encouraging the advanced energy sector’s development in the state. He spoke with MiBiz about some of the opportunities and barriers the industry faces in the state.

Production in the advanced energy industry globally appears to have scaled back. What headwinds are companies facing on the state level and regionally?

In some ways, I think the big one is policy uncertainty. If you look back over the last five years, we’ve seen tremendous growth and $1.9 billion in economic activity. But looking forward to the 10 percent by 2015 RPS (renewable portfolio standard), basically all of that is already under contract. So we’re seeing at the state level some of the same uncertainty at the national level that came from whether or not the investor production tax credit for wind would get extended. It’s that kind of uncertainty that is giving developers second thoughts about whether to go forward with development or whether to start looking at other states instead of Michigan.

What needs to happen for wind and solar energy to remain in the broader energy conversation given how cheap natural gas is projected to remain for the foreseeable future?

There are some really nice synergies between these types of energy and particularly wind. Gas can be fired up pretty quickly, but historically, it’s been pretty volatile in price. Whereas wind, while it doesn’t always blow, once the tower is built, you’ve locked that (price) in for the next 20 years and you don’t have to pay any fuel costs. Being able to pair natural gas with wind – the two sources are stronger together than either is on their own. At the same time, while natural gas is cheap today, we don’t know what it’s going to be seven years from now. With wind, we know what the fuel cost is going to be, and investing in those technologies now hedges against the fluctuations in fossil fuels’ prices.

Gov. Rick Snyder says it time to look at increasing the state’s RPS even though he did not favor the constitutional amendment that would have done that last fall. What do you make of his sudden change in attitude toward pushing for an increased RPS?

I actually give Governor Snyder a lot of credit. In the wake of the discussion that we had last fall and the proposal of the amendment, it was sort of taking a step back and saying let’s have the date guide the decisions we make and know where we are in terms of price and the gains from innovations. Now after six months of discussion and the forums held around the state, it looks like the data suggest it’s time to go forward. I think that’s been the right approach.

Many advocacy groups tout the economic impact the advanced energy industry has provided, but solar and wind manufacturing is scaling back globally. What is the state’s opportunity to sustain growth in this emerging yet volatile market?

We have seen companies scale back or unfortunately go out of business. You never want to see that, but at the same time there is no mature industry that has hundreds of growing players — you only have to look at the auto industry for an example of that. One hundred years ago, there were a hundred different car companies, but over the course of those years as the market grew, there was consolidation. That’s something we can probably expect more of in the advanced energy industry. However, there are also deep supply chains in the industry and our diversification and capabilities in manufacturing is an obvious strength for the region. As a state, we are in the top five in solar manufacturing. Manufacturing is part of an innovation pipeline when it comes to new technologies and developing processes.

How is that pipeline coming together across sectors?

The role of innovation in the wind sector is actually helping in other sectors as well. Astraeus Energy has been working on lightweighting wind turbines blades, but the most direct application they’ve found is actually in lightweighting the hoods of vehicles and other automotive parts. That’s just really interesting, that the innovation is going back and forth.

What about innovation in the electrical grid?

We’ve talked a lot about wind and solar energy efficiency, and one of cool places where the technologies intersect is in telecommunications. The smart grid applications of these technologies really have the ability to transform the way we use energy. We have for a long time thought of every challenge as a demand challenge. When we get the highest peaks in summer for energy, we think we have to have the capacity to meet those. And while reliability can’t be overstated, we might actually be able to develop a more reliable and efficient system by looking at both the supply and demand side. Some regions of the country are beginning to develop demand response systems that can help balance the load.


Interview conducted and condensed by Elijah Brumback.

Read 2586 times Last modified on Friday, 19 July 2013 12:53

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