Renewables Could Meet Nearly a Third of Michigan’s Energy Needs

Source: Union of Concerned Scientists • Posted: Thursday, March 13, 2014

Tripling of In-state Production Affordable, Spur Billions in New Investment

CHICAGO (March 12, 2013) – Michigan can meet nearly a third of its electricity needs by tripling power produced from in-state renewable energy sources by 2030 at virtually no additional cost to consumers, all while maintaining reliability and spurring billions of dollars of investment in the state, according to a Union of Concerned Scientists (UCS) report released today.

By continuing to ramp up renewables at the same growth rate as the current renewable energy standard (RES) —1.5 percent per year—Michigan could boost its in-state renewable energy production to 32.5 percent in 2030. Such a move would cut power plant carbon emissions and lower the state’s exposure to the economic, health, and environmental risks of over-relying on coal or natural gas.

Ramping up renewables to such a level would come at virtually no increase in electricity costs, with consumers projected to pay just 0.3 percent more over the next 15 years. Instead of spending ratepayer funds to burn more coal and natural gas, UCS’s analysis shows that a stronger RES would redirect these funds toward investment in new renewable energy resources to meet the strengthened RES.

“Further diversifying Michigan’s electricity mix with renewable energy fits squarely with Governor Snyder’s goals of an affordable, reliable, and adaptable electricity system that also protects of the environment,” said Sam Gomberg, a UCS energy analyst and the report’s author. “And we can do it while driving investments in Michigan communities.”

Utilities are well on their way toward meeting Michigan’s current RES, which requires 10 percent of the state’s electricity to come from renewable energy by 2015. The RES is set to expire at the end of next year, and the UCS analysis finds that strengthening and extending the standard would reap significant economic and environmental benefits for Michigan.

This higher standard would inject more than $9.5 billion in new capital investment into Michigan’s economy between 2016-2030. Such investment would also generate millions of dollars in new tax revenue, expenditures on facility operation and maintenance, and wind power land lease payments for local communities.

The findings of the analysis are consistent with a report delivered last year to Gov. Rick Snyder (R) by the Michigan Public Utility Commission and Michigan Energy Office that concluded the state could cost-effectively boost its renewable electricity standard to at least 30 percent with in-state resources while maintaining the reliability of the state’s power supply. In December,Snyder announced clean energy goals for Michigan that included increasing the state’s use of renewable energy.

“The state’s current RES has been a success, cost-effectively driving new renewable energy development and providing important economic, public health, and environmental benefits in the process,” said Gomberg. “Absent further policy action, however, this momentum will stall, leaving Michigan’s vast renewable energy resources largely untapped and making the state increasingly vulnerable to the many risks associated with an overreliance on coal and natural gas.”

The report also examined a more modest scenario of a standard calling for a 1.5 percent growth per year, but stabilizing at 17.5 percent by 2020. This policy scenario achieves a fraction of the benefits of a stronger 32.5 percent by 2030 RES while average electricity prices would remain largely the same.

“In the last several years, Michigan has built strong momentum in transitioning toward a clean energy economy,” said Steve Frenkel, UCS’s Midwest Office director. “The state legislature should continue that momentum by passing a law this year increasing the RES to at least 30 percent by 2030.

“Michigan has the resources, technologies, skills, and experience to be a national leader in renewable energy. With thoughtful and determined political leadership, it can maximize the economic, public health and environmental benefits of a clean and reliable energy future.”