GRAND HAVEN — Yet another West Michigan coal plant will be laid to rest after officials in Grand Haven adopted a plan to transition the city’s utility to more natural gas and renewable energy.
Grand Haven’s J.B. Sims plant on Harbor Island will be the third coal plant to close in the region, following the James DeYoung plant in Holland (2017) and the B.C. Cobb plant in Muskegon (2016), both of which are in the decommissioning process. The Sims plant is scheduled to close by June 2020.
The plant’s owners say they see a more diversified future ahead with natural gas and renewable energy.
“Electric market conditions over the past decade have changed the economic feasibility of operating small baseload power plants,” said Erik Booth, power supply manager at Grand Haven Board of Light & Power. “These market conditions, in conjunction with the large capital investments necessary for life extension of the Sims Power Plant, make it in the best interests of our community to seek other alternatives of power supply.”
The Grand Haven Board of Light & Power first identified a 2020 retirement date in 2012. Multiple internal and external studies came to the same conclusion that will allow the utility to be “more flexible and adaptable than we could be in the past while allowing us to maintain some form of local electric generation,” Booth said.
The Nov. 19 decision on Sims came after months of contention between the BLP and Grand Haven City Council.
After closing Sims in 2020, the plan calls for building a 36 megawatt “peaker” natural gas plant for periods of high demand or when it’s more economical. The rest of the city’s energy needs will be met with power purchases, with renewables playing a “large role going forward,” Booth said. The gas plant also will provide a heat source for the city’s downtown snow melt system.
The plan is one of four pathways outlined by a consulting firm earlier this year, which also included keeping Sims online with upgrades and depending entirely on market purchases.
“An open position will be kept that will allow us to also take advantage of new emerging technologies,” Booth said. “This strategy will allow us to not only maintain but increase the reliability our community expects, but will also allow us to provide more sustainable electric rates for years into the future.”
Booth says the energy transition plan will save the city tens of millions of dollars in the next couple of decades.
“The positive impact to the industrial, commercial and residential customers is going to be extremely significant,” he said.
Jan O’Connell, development director with the Michigan chapter of the Sierra Club, expressed reservations about plans for a natural gas plant when the city could rely on market purchases. The group led a public campaign last year to close the Sims plant and “get the discussion going.”
“Natural gas is going to face headwinds” as wind and solar prices grow more competitive, she said. “We’d hate to have a small community not only invest in fossil fuels but also be committed to something they may not get a lot of use out of.”
O’Connell and the Sierra Club also challenged the Holland Board of Public Works’ initial plans to replace the DeYoung facility with another coal plant.
Grand Haven’s power system is about one-third the size of Holland’s, which completed a years-long process in 2013 to build the Holland Energy Park that includes a 145 MW combined-cycle natural gas plant.
Unlike Grand Haven, Holland’s plant provides baseload power for the community and will not require it to seek new power purchase agreements through the Michigan Public Power Agency (MPPA) as other coal plants close, said Joel Davenport, operations director at the Holland Board of Public Works.
“HBPW does continue to evaluate opportunities to diversify our portfolio,” he said, including recently contracting for 9.9 MW of solar capacity through the MPPA. Another 3.5 MW of wind power is expected to be operational in the next few months.
“The decision relative to energy supply is really a community specific decision,” Davenport said. “The ultimate solution needs to be one that makes the most sense for that community.”
The next phase for each of these plants is cleaning up a legacy of pollution and storage ponds for coal ash, a byproduct of burning coal.
The Cobb plant in Muskegon is currently being torn down, while Holland’s coal yard and ash pond remediation was completed early this year. The plant is expected to be decommissioned by June 2019, Davenport said, which includes assessing onsite hazardous materials like asbestos and lead paint.
“The budgetary estimates will help inform the waterfront visioning process that is occurring now with city staff and public input,” he said. “The outcome of this process will help determine the timeline for the next steps with the building itself.”
Meanwhile, Grand Haven’s Harbor Island also has a legacy of contamination, dating back to when it was a city landfill nearly 100 years ago.
“Fortunately, there are both federal and state rules and standards in place to provide clear instructions on how best to clean up the environmental conditions of the site,” Booth said.
The joint-action Michigan Public Power Agency helps municipal utilities to buy power on the market. Several municipal utilities contract for power generated at coal plants across Michigan that are scheduled to close in the coming years. Municipal utilities can purchase power on the market or invest in new generation projects.
“The whole premise of the agency is to collaborate with other municipal utilities so they can build a diversified energy supply portfolio that they would otherwise be unable to do on their own,” said Patrick Bowland, MPPA’s general manager and CEO.
Bowland said Michigan’s older stock of coal plants now ready to retire puts it in a “much better place” than most states.
“Those plants are going to naturally retire, there’s no need to uneconomically close an asset,” he said.
With the closing of coal plants across the state, the MPPA is displacing the generation evenly with natural gas, wind and solar. Bowland says the MPPA has entered into agreements for about 350 MW of renewable energy since 2010.
Given the difficulty in securing permits to build new wind projects, the MPPA increasingly is turning to solar.
“We’ve already made (solar) an important part of our portfolio,” Bowland said. “That power supply source is absolutely a big part of our future, no question about it.”
MiBiz energy news coverage is supported by Consumers Energy, a public utility that provides natural gas and electricity to 6.6 million Michigan residents. For more information, visit consumersenergy.com.