Pack the Essentials: Solar and wind make the list in Michigan

Chris Brown
President of Sales and Service in the United States and Canada at Vestas
Published on 1st of May 2020

Last week I posted an article about the essentialness of renewable energy—today I want to dive into this idea further by evaluating how renewables have shaped and will shape a rust-belt economy. 

Many industry players have known the essentialness of renewables for years, especially the manufacturers of renewable technologies with products that can enable terawatt hours of electricity production and the early adopter utilities that saw the promise in affordable, clean energy. The pandemic highlights an existing truth: renewable energy is not a fad; it is a cornerstone of electric generation, powering homes, hospitals, and government buildings. 

Technology innovations in both turbine dimensions and solar panel conductors have led to huge efficiency gains and viable renewable projects in parts of the country previously thought unfit for development. Renewable energy equipment manufacturers have driven down costs and enabled utilities all over the country to own and procure least-cost, least-risk clean power. We can see renewable energy’s essential-nature in Michigan where wind and solar support economies, alleviate fossil-fuel retirements, and incentivize business to stay and play in the state through a combination of policy, competitive markets and corporate demand.

Essential for Rural and Urban Economies

Michigan identified the critical role of renewables in 2008 when the Legislature passed its first renewable energy target. DTE—the state’s largest electric utility—cemented this knowledge by becoming the largest investor and owner of wind and solar energy in the state and setting a goal of reducing carbon emissions 80% by 2040. Now, with 2,190 MW of wind and 181 MW of solar installed, the state is a leader in renewable energy installations. In total, 27 wind farms act as an economic engine for rural communities, creating jobs, improving infrastructure, and adding to the tax base. In fact, Michigan wind farms pay $31 million annually in state and local taxes. In urban centers, cheap solar and wind power Michigan’s re-emerging industries and the revitalization of downtowns like Detroit’s.

Essential for Minimizing Capacity Shortfalls

Michigan wind is growing with 805 MW of wind under construction as of the end of 2019 and more expected to be built in 2020 and 2021. This build-out is essential for maintaining reliability in Michigan. As coal plants across the country and in Michigan become uneconomic due to market forces, capacity shortfalls emerge. Wind, solar and energy storage can fill these shortfalls and deliver cheaper prices for Michigan customers. This can be illustrated through MISO’s latest capacity auction results. MISO’s capacity auction offers a platform for utilities to purchase capacity from generators such as natural gas plants and wind farms through a competitive marketplace. This year’s auction produced record high capacity prices partially due to traditional generator retirements—good news for participating power plant owners, but bad news for utilities and ratepayers. In short, the state needs more renewable energy to fill these capacity needs and to lower capacity prices for all ratepayers.

Essential for Business Growth

Outside of markets, Michigan has allowed industry to lead in renewable energy growth. DTE offers the MIGreenPower program which arms electric customers with the power to procure renewable energy up to 100% of their load. Most recently, General Motors announced they will satisfy 100% of their southeast Michigan plants’ electricity demand with renewable energy by 2023 thanks to the MIGreenPower program. Ford Motor Company, SEEL, The Detroit Zoo, and the University of Michigan all participate, providing steady need for renewables investment and procurement. Programs that enable both residential and commercial customers to show their demand for renewable energy are innovative financing tools, enabling further construction of wind and solar farms. The GM-DTE partnership is the most recent example of how traditional utilities have become increasingly nimble in supplying customer demand.

Through this crisis, wind plants in MISO have produced 11.2 million MWh[1] of essential power allowing residents to successfully work from home, healthcare providers to safely serve patients, and loved ones to consistently charge their phones for the video calls keeping us all connected. Renewably generated electricity is not only essential to powering our lives through tough times, but also to expanding our local economies, driving down energy prices and enticing businesses to grow in state. The essentials are here to stay.

[1] Represents total MISO wind generation from March 1-April 22, 2020. 11.2 MWh represents enough electricity to power 8.2 million average households for 2 months.