A new study from the Michigan Energy Office and Public Service Commission—ordered by Governor Rick Snyder—shows the state can triple its renewable portfolio standard, achieving 30% renewables in the state’s portfolio by 2035. Michigan’s two key utilities – DTE Energy and Consumers Energy– are on track to meet the current 10% renewable target next year. Governor Snyder also ordered similar reports on energy efficiency programs, electric choice and “additional areas.”
The report points to improvements in wind turbines’ efficiency and cost-competitiveness as the key factors in the ability to meet 30%. Additionally, the report cites Michigan’s inclusion in PJM and MISO markets as ameliorating reliability and price volatility concerns. Access to the broader market – both to buy and sell renewable energy – and long-term power contracts mean Michigan’s consumers are able to capitalize on cheap, clean energy without worrying about the intermittency of renewable resources.
Indeed, because wind energy is proving to be so cost-competitive in the regional markets, DTE and Consumers have slashed their monthly surcharges for renewables by 85% and 79%, respectively. The report notes that additional transmission infrastructure could help “facilitate the introduction of wind power where it might not otherwise” have been feasible, and points to the recent development of transmission lines in the “Michigan Thumb.”
As we at Americans for a Clean Energy Grid have identified in our PJM and MISO studies, expanded transmission can help drive even further savings for customers in the region. Because wind has zero fuel costs, its inclusion in wholesale energy markets reduces energy prices across the region by kicking out more expensive generation on the margin. This “price-suppression effect” creates savings that are passed along to consumers. Our studies showed that the average MISO household can save approximately $150 a year by doubling the amount of wind in the market. In PJM, the region can save $7 billion annually in 2026 by doubling the states’ renewable portfolio standards. In both studies, the savings are net savings – after paying for significant investments in high-voltage transmission to deliver renewable energy from strong resource regions to population centers.
The Michigan findings follow on the heels of the Public Utility Commission of Ohio’s report that its state renewable portfolio standard could save customers nearly $30 million in 2014. It is the latest in a growing realization that a clean energy future is an affordable energy future. State mandates are creating jobs, lowering energy bills, and protecting the climate. Michigan’s study shows increasing renewable energy in the state is technically and economically attractive. Hopefully the states policymakers will see the writing on the wall and move to enhance the state’s renewable portfolio standard.