Charting Michigan's Renewable Energy Future

Michigan has vast in-state renewable energy resources, yet currently relies heavily on its aging and inefficient coal fleet to generate electricity.

This overreliance on fossil fuels creates substantial air pollution and carbon emissions, and takes a significant toll on public health, the state's economy, and the climate.

The state took an important first step toward a cleaner energy future when it passed its renewable electricity standard (RES) in 2008, which requires Michigan utilities to ramp up renewable energy development to meet 10 percent of the state's electricity needs by 2015.

With the standard set to level off at the end of 2015, Michigan now has the opportunity to extend and strengthen the RES to continue the state's transition to a cleaner, more sustainable energy sector.

UCS analysis shows that in-state renewable energy resources can affordably and reliably generate 32.5 percent of Michigan's electricity by 2030 — and that ramping up renewables to this level would spur billions of dollars in investments, cut carbon emissions, and reduce the many risks of an overreliance on coal or natural gas.

Vast renewable energy resources

Michigan has sufficient in-state renewable resources — including wind, solar, and biomass — to generate several times the state’s total 2012 electricity demand. While not all of Michigan’s renewable resources can or should be developed due to conflicting land uses, cost considerations, and other hurdles, the magnitude of the resource provides a wide range of options for selecting the optimal technologies and locations for development.

For example, using the latest wind turbine technologies, Michigan’s onshore wind resource has the potential to generate nearly five times the state's 2012 electricity demand, even after a variety of competing land uses are accounted for. Solar photovoltaic (PV) resources in urban areas — including large ground-mounted and smaller rooftop systems — could provide another 71 percent of the state’s 2012 electricity demand.

Overall, Michigan’s wind, solar, and sustainable bioenergy resources could generate nearly six times the state’s 2012 demand for electricity.

Significant economic benefits

• Extending and strengthening Michigan's RES to require utilities to supply 32.5 percent of the state's electricity with renewable energy by 2030 would drive more than $9.5 billion in new capital investments in Michigan as more than 550 megawatts (MW) of new renewable energy capacity is added each year.
• New renewable energy facilities would also support local communities by providing hundreds of millions of dollars annually in operation and maintenance payments, local tax payments, and land-lease payments to landowners that host wind farms.
• These in-state investments help grow the state's economy. In contrast, Michigan has no in-state coal resources and sends vast amounts of money out of state each year as a result. In 2012 alone, Michigan spent $1.2 billion to pay for imported coal.
• Ramping up renewable energy to this level would have minimal impact on consumers. Electricity sector costs would increase by just 0.3 percent over business as usual between 2014 and 2030. And as Michigan's renewable energy resources are developed, they put downward pressure on electricity rates by 2020 and beyond.

Less risk

• Ramping up renewable energy would significantly reduce Michigan's power plant emissions. Increasing renewable energy to provide a third of the state's electricity would lower CO2 emissions by more than 65 million tons from 2014 to 2030 — equivalent to the annual emissions of 15 typical (600 MW) coal plants.
• Increasing renewable energy also reduces the likelihood of a large-scale shift to natural gas, a scenario that would fail to effectively address global warming.
• An electricity portfolio that includes significant levels of renewable energy would lower the state's exposure to fluctuating prices for coal and natural gas. Unlike fossil fuels, the "fuel" for wind and solar resources is free, providing a valuable hedge against the risk of rising costs for Michigan's coal and natural gas fleet.
• Developing renewable energy resources would also lower the state's exposure to the reliability, public health, and environmental risks associated with burning fossil fuels for electricity.

Increasing the state's renewable electricity standard

Michigan’s current RES levels off at the end of 2015. Without new policies in place to encourage renewable energy development, the state will continue to be heavily dependent on fossil fuels and nuclear power through 2030.

Extending and strengthening Michigan’s commitment to renewable energy can be done affordably while maintaining reliability in the electricity system, and would provide significant economic, public health, and environmental benefits.

Governor Snyder and the Michigan legislature should work in 2014 toward passing an RES policy for Michigan that includes achieving at least 30 percent renewable energy by 2030. Delaying legislative action only means delaying a cleaner, more reliable, more economically beneficial energy future for Michigan.