It’s out there, whipping its way across Michigan farms and fields and forests.
No longer merely a cool summer breeze or a bone-chilling gale, wind is now routinely plucked from the sky, bent to man’s will and transformed into the electricity that powers the Great Lakes State.
Wind energy – completely renewable, environmentally friendly and increasingly affordable – is the most abundant clean energy source in Michigan.
And corporations, utilities and ratepayers want more.
“Corporate purchasers are saying, ‘We want more renewables, we want more efficiencies, and we want it faster than it’s happening right now,’” says Liesl Eichler Clark, president of the Michigan Energy Innovation Business Council.
Michigan has seen extraordinary growth over the last decade in the mix of fuels used to generate electricity. Natural gas and renewable energy sources are accounting for a growing share of electricity production, while coal-fired generation has declined.
Energy experts nationwide say the share of electricity generated from renewable energy sources such as wind and solar will continue growing for decades to come. In 2015, approximately 10 percent of all electricity came from renewable energy, according to the Michigan Public Service Commission.
The Michigan Legislature in 2008 passed the Clean, Renewable and Efficient Energy Act requiring all electric providers to obtain at least 10 percent of the electricity they sell from renewable energy resources. Companies had until the end of 2015 to reach that goal, and all 84 providers in Michigan either met or exceeded it, says Judy Palnau, spokesman for the Michigan Public Service Commission and the Michigan Agency for Energy.
“Michigan’s steady progress toward reaching – and exceeding – the 10-percent-by-2015 renewable portfolio standard shows the state’s commitment to a diversified resource base,” says MPSC Chairman Sally Talberg.
It remains unclear if the Michigan Legislature will establish new mandates on utilities beyond the current law. Different versions of an energy overhaul are pending in the House and Senate; both include goals for utilities rather than mandates with consequences.
Falling prices mean rising interest
Industry experts say utilities and private companies in the last five years invested $2.8 billion in building renewable resources in Michigan.
Wind energy costs less than half of what it did eight years ago when Michigan established its renewable energy standard: $115 per megawatt hour in 2009 to $45 per megawatt hour today, says Judy Baldwin, manager of the Renewable Energy Section for the Michigan Public Service Commission.
Wind energy pricing remains attractive to utility and commercial purchasers, according to the “Wind Technologies Market Report” released in August by the U.S. Department of Energy.
Key findings from the report include:
• Wind power represented the largest source of U.S. electric-generating capacity additions in 2015.
• Bigger turbines are enhancing wind project performance.
• Low wind turbine pricing continues to push down installed project costs.
• Wind energy prices remain very low.
“Wind energy prices – particularly in the central United States – are at rock-bottom levels, with utilities and corporate buyers selecting wind as the low-cost option,” says Ryan Wiser, senior scientist with Lawrence Berkeley National Laboratory, which prepared the report.
There’s plenty of corporate demand in Michigan for renewables.
According to a recent study for the Advanced Energy Economy Institute, “advanced energy sources that use little or no fuel, such as wind, solar, hydropower, fuel cells, and energy storage, create opportunities for corporations to capture savings and hedge against energy price volatility.”
The study shows Michigan ranks seventh for highest potential demand for corporate renewable energy. It concluded that much of that renewable energy potential lay within Michigan’s strong manufacturing sector, which continues to drive commercial and industrial energy consumption in the state.
“I think corporations like to be able to brand themselves as being clean and renewable,” says the MPSC’s Baldwin.
“They want to be able to say they caused additional renewable energy to be built, or they caused additional wind generation. They’re saying, for example: ‘My energy load is going to be 100,000 kilowatt hours and I’d like you to match that with 100,000 kilowatt hours of wind.’”
To facilitate the expanded use of renewables and overall energy efficiency among businesses and large energy users, a group of leading companies headquartered in Michigan, including General Motors, Crystal Mountain, Dow Chemical and Steelcase, established the Corporate Purchasers Roundtable in 2016. Its focus is finding ways to procure more advanced energy in Michigan.
“The Corporate Purchasers Roundtable gives us a platform to drive market growth through utility engagement and policy and regulatory changes, to unlock the benefits of advanced energy in Michigan,” says Rob Threlkeld, global manager for renewable energy at General Motors.
“GM is interested in adding more advanced energy to its energy mix because it makes good business sense.”
Corporate purchasers go green for a myriad of reasons: financial, ecological and social.
“As home to some of the world’s largest companies seeking to power their operations with advanced energy, Michigan can be a leader in turning corporate energy procurement goals into reality,” says Clark of the Michigan Energy Innovation Business Council.
“Through the Corporate Purchasers Roundtable, we are creating opportunities for these companies and others to access advanced energy in Michigan and, in the process, improve the competitiveness of Michigan’s business climate.”
Making the ‘Switch’ to green
A newcomer to Michigan, a Nevada-based company named Switch plans to operate a massive data center near Grand Rapids and has pledged to power the facility using 100 percent green energy.
During the 2015 National Clean Energy Summit 8.0 held in Las Vegas where President Barack Obama was the featured keynote speaker, Switch became the first data center provider to join the American Business Act on Climate Pledge.
“Sustainably running the internet is one of the driving principles of Switch, which is why in our site selection process . . . we had to find a local utility who could provide a pathway to 100 percent renewable power,” says Adam Kramer, Switch executive vice president of strategy.
A new 2 million-square-foot data center would be the largest data center in the eastern United States, according to Switch. It will be housed in the former Steelcase pyramid following a large-scale build-out that began this spring.
Switch is working with Consumers Energy to develop a sustainable energy plan at a long-term, fixed price.
“Since our first contact with Switch, Consumers Energy understood the importance of building new renewable generation to provide Switch with 100 percent renewable power,” says Garrick Rochow, Consumers Energy’s vice president and chief customer officer.
“We are excited to partner with Switch to make the largest data center in the eastern U.S. the greenest.”
Plenty of potential
Estimates of Michigan’s wind-generating capacity have increased with improved technologies; the state’s potential was ranked 15th in the nation in 2014. In 2015, Michigan was 14th among the states in installed wind capacity and 12th in the nation in the amount of electricity generated from wind.
Being surrounded by the Great Lakes, some might imagine Michigan would rank higher. But states in the nation’s interior – Iowa, North Dakota, South Dakota and Texas – can produce more wind energy at a cheaper price.
“That wind down there is being developed for as little as 2.5 cents per kilowatt hour, versus about 4.5 cents in Michigan, because the wind is so strong,” Baldwin says.
But it’s taken time and money to harvest Michigan’s wind and bring down prices.
DTE Energy, Michigan’s largest utility, has invested $2 billion in renewables since 2008. That clean energy is fed into the power grid and distributed to those that need it. Today 10 percent of customer electricity needs come from renewables – enough to power 400,000 homes.
The vast majority of that clean energy comes from wind.
“Out of the 1,000 megawatts of renewable energy that will be on line by the end of 2016, I would say over 95 percent of that is wind,” says Dave Harwood, director of renewable energy for DTE.
Once wind generation equipment is in place, operating costs are often less than other methods. The Michigan Public Service Commission says there are about 900 wind turbines in Michigan with plans for many, many more.
Because winds are strongest in Michigan’s Thumb, DTE Energy and Consumers Energy have invested heavily in wind farms in Huron, Tuscola and Sanilac counties, making it Michigan’s “wind capital.”
This spring, ITC Holdings, a company spun off from DTE that manages the high-voltage transmission system in Michigan, completed construction on the “Thumb Loop,” a 140-mile transmission line that weaves through farmland connecting wind turbines to Michigan’s high-voltage power grid, and then on to homes and businesses across much of the Lower Peninsula. The loop is capable of supporting energy generated from 2,800 wind turbines.
Rows of towering turbines are a common sight in some parts of rural Michigan, but none more so than the tip of the Thumb. And their growing presence is causing a stir.
While many local townships and counties appreciate the increased tax base and millions of dollars for rural landowners in the form of land lease payments, others, including vocal residents and some elected officials, say enough is enough.
Some townships are even considering moratoriums or changes in zoning laws to limit the number of turbines.
Utility companies—already heavily invested in many Thumb area wind farms—say they are trying to work with local residents to make the wind farms more palatable.
Two years ago, the University of Michigan’s Center for Local, State and Urban Policy (CLOSUP) Wind Project conducted a survey in 14 Michigan townships to better understand what impact wind turbines have on landowners in wind farm communities versus those without wind turbines.
Overall, landowners in all townships, with and without wind farms, believe more in the positive impacts of wind turbines than in the negative impacts, says Sarah Mills, who conducted the CLOSUP study.
The survey showed landowners with wind turbines on their property:
• Invested twice as much money in their farms (in home improvements, outbuildings, farm equipment, and drainage/irrigation) in the last five years than their neighbors and landowners in townships without wind farms.
• Bought more farmland in the last five years than other landowners.
• Are more likely to believe their land will be farmed in the future and less likely to believe their land will go idle than other landowners.
In 2016, CLOSUP received a grant from the Charles Stewart Mott Foundation to continue investigating community attitudes about wind energy near Michigan’s existing wind farms and then communicating lessons learned to inform local wind development policies.
“I’m hoping my research will show wind developers what will make this more acceptable and how they might be able to get more communities to be accepting of wind turbines,” Mills said. “If they more explicitly share the economic benefits throughout the communities – not just with those people that have turbines on their property – then it’s possible.”
If they build it…
Michigan’s manufacturing sector has also seen new economic opportunities that come with clean energy.
One example is Ventower Industries, a Monroe-area steel fabricator that specializes in utility-scale wind turbine towers. Founded in 2008, the firm has grown to more than 150 employees.
“Every time I visit Ventower, I see more signs of progress and job growth,” says Michigan State Senator Dale Zorn (R-Ida). “Ventower is helping to diversify our industry in this area and the jobs they are creating are a welcome addition to the region.”
Michigan colleges and universities now offer 30 clean energy programs as part of their curriculum.
“People for a long time have been calling for Michigan’s economy to diversify and get beyond automobiles, and it finally looks like it’s happening to a certain scale with renewable energy,” says James Clift, policy director for the Michigan Environmental Council.
“We talk about renewable energy having a lot to offer for Michigan’s economic development, for better utility rates, and for better health from reduced emissions from the power plants. So it’s a winner from all levels.”
But to continue growing that portion of the economy, Michigan needs to show it’s behind advanced energy, Clark says.
DTE Energy and Consumers Energy are taking advantage of existing federal production tax credits and investing in wind farms. Both plan to continue ramping up their reliance on renewables in the coming years.
To meet the growing demand for renewables among residents and corporations, DTE Energy has asked the Michigan Public Service Commission to amend the company’s current renewable energy plan by adding a voluntary renewable energy pilot program.
If approved, interested DTE customers would agree to pay a premium for a larger percentage of their electricity to come from clean energy. In addition to receiving a DTE credit with this program, customers would lock in their rates for the long haul.
“From a business customer’s perspective, they should look at that and see this as an energy price hedge into the future,” says DTE’s Harwood. “They can lock in their energy costs in a renewable way.”
Although many Michigan corporations are pleased that utilities want to increase their use of renewables, some companies are concerned with the pricing on DTE’s pilot program.
The Michigan Public Service Commission is expected to rule on DTE’s proposal this fall.
Whichever way Michigan moves forward with clean energy, wind is likely to continue to be at the heart of it all.
“There’s a trend that’s been established that businesses and private citizens want to go green,” said Brian Wheeler, Consumers Energy spokesman. “Whether it’s going to come from law at the state or federal level or from private businesses, there’s going to be more interest in doing renewables.”
Editor’s note: This is the third in a series looking at Michigan’s infrastructure and the individuals and businesses that play a part in it.