Powering the Mitten: What's next for our renewable energy future?

Every morning, Chandler Township Supervisor Bill Wren drives to the end of his driveway and gazes up at a 325-foot wind turbine located about three quarters of a mile away from his house.

"I look up to see which way the wind is blowing for the day and how strong it is," says Wren. "Then I go on to work." 

Chandler Township, located near the tip of Michigan's thumb, is ground zero for Michigan's wind energy boom. Because the region boasts the highest on-shore wind speeds in the state, it has seen the lion's share of wind energy development over the past several years. The rural, agricultural community now has wind turbines in every section of the township.

Michigan now ranks number 16 of 50 states in terms of wind energy development, according to the American Wind Energy Association. The vast majority of that capacity is owned either directly by utilities or by private companies that sell capacity to utilities.  

"It's a good thing for our community," says Wren. "It brings some revenue in for the farmers, and some additional revenue to the township. All of that helps the whole community in the long run."

Michigan's wind boom was driven in large part by Public Act 295 of 2008, which created Michigan's Renewable Portfolio Standard. The law required Michigan utilities to source 10 percent of their energy sales from renewable sources by 2015, and set specific targets for Michigan's two largest investor-owned utilities: 600 MW for DTE Electric, and 500 MW for Consumers Energy by 2015.  

Utilities are on track to meet or exceed these requirements, according to a Michigan Public Service Commission report. Of the 1600 MW of renewable energy capacity built in Michigan between 2008 and 2014, the majority, 92 percent, is wind. That's followed by biomass (3 percent), landfill gas, (3 percent), and solar (1 percent), according to our analysis of Michigan Renewable Energy Certification System data. The cost of wind energy per megawatt hour is comparable with coal, according to the U.S. Energy Information Administration.
Now, Michigan legislators are preparing for the debate over what's next. Several bills have already been introduced, including a bill to increase the renewable standard for utilities and a bill to repeal the RPS entirely. Meanwhile, an Energy Working Group, comprised of a broad cross-section of stakeholders and chaired by Senate Energy and Technology Committee Chair Mike Nofs, met over the summer to craft recommendations. Those recommendations are expected to be revealed in the new year.  

Larry Ward, Executive Director of the Michigan Conservative Energy Forum, is one of the stakeholders involved in those talks.

Solar array. Photo by Doug Coombe.


"We've been talking about where we go from here," says Ward.  "Do you go forward continuing the standard?  Do you change some things that, as people worked from 2008 to 2015, were a hindrance to progress that could have been made? We have the potential to do a lot more."

One thing Michigan legislators will have to decide on, if the state is to continue with an RPS, will be what number to target next. The 10 percent goal was reached without significant rate increases; in fact, renewable energy surcharges that were negotiated by utilities to pay for renewables back in 2008 have been reduced or eliminated, as renewable costs came in less than expected.

"There have been numbers thrown around anywhere from the 1.5 percent increase per year rate that we’ve already been doing, to a package of bills that had a 4.5 percent increase every 3 years to get to 19 percent by 2022," says Ward.

Michigan is one of 29 states that have established a renewable energy portfolio standard. Targets range from 9 to 10 percent in Michigan, Wisconsin, Arizona and Pennsylvania, up to 25 percent by 2030 in Massachusetts, 33 percent by 2020 in California, and 40 percent by 2030 in Hawaii. Other states have established goals, but no requirements.
Mark Barteau, Director of the University of Michigan's Energy Institute, is spearheading a study to offer an unbiased evaluation of potential scenarios for the RPS, something he felt was important after a ballot measure to extend Michigan's RPS to 2025 and increase the target to 25 percent failed in 2012.

"After coming to Michigan as the director of this institute in the fall of 2012, I was struck by how little input there seemed to have been from universities and experts within the state," says Barteau. "The Energy Institute ought to be a resource for the public and policy makers on important issues like this. There was a lot of mud-slinging about the cost of an increased RPS on the 2012 ballot proposition. Our objective is to do an analysis so that the next time this issue comes up, in whatever form, we would actually have a contribution to make to the discussion."

Mark Barteau. Photo by Doug Coombe.

Jeremiah Johnson, Assistant Professor at the University of Michigan's School of Natural Resources and Environment, is carrying out that research. He is studying the costs and benefits of Michigan's energy framework as it relates to potential future renewable portfolio standard scenarios.

"The program costs are modest," says Johnson. "The costs associated with a 25 percent RPS by 2020 would impact a typical household, one that consumes 600 kilowatt-hours per month, about $2.60 per month; that's less than a 3 percent increase."

And as new USEPA regulations on carbon emissions are set to begin in the next several years, increasing Michigan's RPS is one way for the state to get ahead on compliance, says Johnson.

"It's important to look at in the context of the EPA's proposed rules for carbon reduction for existing power plants," he says. "When the proposed rules come to fruition, renewables can play a really important role. By expanding RPS, Michigan could position itself to meet a large share of that carbon reduction goal largely through in-state renewable generation. Some rough estimations show that a 25 percent RPS would get us about two-thirds of the way there."

In addition to helping clean up carbon, the economic development impact of renewable energy development should not go unrecognized, says Ward. His organization prepared a study documenting that impact.

"You’re talking another 20,000 jobs in Michigan or another $3.28 billion worth of economic impact to our state," he says.  "I think that’s where we add the value. We are telling people not to be afraid to vote for these things because economically, for our state, it is very favorable."