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.
Adding more wind power to the electric grid could reduce wholesale market prices by more than 25 percent in the Midwest region by 2020 according to a new analysis conducted by Synapse Energy Economics on behalf of Americans for a Clean Energy Grid. The report found that wind power could drive down the wholesale price of power by $3 – $10 per megawatt-hour (MWh) in the near term and up to nearly $50 per MWh by 2030. Those savings would be passed along to consumers through lowering retail electricity prices by $65-$200 each year.
The analysis also found that new transmission is needed in the region to tap wind power; however, investments in transmission are small compared to the savings they would reap, providing more than a 2 to 1 return on investment throughout various scenarios.
“This analysis illustrates a basic fact about our power system – building transmission to unleash cheaper, domestic resources makes strong economic sense,” said John Jimison, Managing Director of the Energy Future Coalition and Americans for a Clean Energy Grid. “Transmission makes up the smallest sliver of the electricity bill, but can make power markets more competitive and drive down costs for everyone. Midwestern states where some of the most valuable and abundant wind power can be found have a real opportunity to capitalize on these findings and continue investing in the infrastructure they need to facilitate additional generation of clean power.”
In order to efficiently operate wind turbines that produce lower-priced power, the Midwest must invest in transmission infrastructure to move this electricity from where it is produced to where it is used. Synapse found that building out the transmission system will have a small impact on retail rates – i.e., an increase of approximately 0.1 to 0.5 cents per kilowatt-hour by 2021, but the modest increase would be dramatically offset by the greater price savings achieved from adding wind generation to the electric system.
Bill White, senior adviser to Americans for a Clean Energy Grid, recently published an op-ed in Roll Call applauding the Federal Energy Regulatory Commission for reaffirming its approval of the Midwest ISO’s multi-value projects (MVP) cost allocation plan, and for standing up to the small but vocal opposition looking to halt transmission projects that would lower energy prices and make the grid more reliable.
Columnist Larry Bell recently published a misleading critique of the state of the American renewable energy industry in his article “Too-Green-To-Fail Energy Policies Fail Achievement Tests.” Mr. Bell made a slew of errors (including misidentifying FERC Chairman Jon Wellinghoff as “Jon Wellington,”), many of which were pointed out by Michael Goggin in his article, “Fact Check: Larry Bell’s List of Errors.” To give you an idea of the number of erroneous statements in Mr. Bell’s article, consider this excerpt from Mr. Goggin’s response:
I’d recommend going back and reading the DOE report, as you’d find that it directly refutes almost all of your attacks on wind energy. For example, it’s hard to claim that wind energy isn’t abundant, when the report identifies enough economically viable wind resources to meet our electricity needs a dozen times over. It’s also difficult to attack wind’s emissions benefits when the report concludes that 20% wind would reduce CO2 emissions by 825 million tons in the year 2030 alone and 7.6 billion tons cumulatively, in addition to large amounts of other harmful pollutants. Moreover, the report finds 20% wind would save 4 trillion gallons of water cumulatively by 2030 and substantially reduce natural gas prices by diversifying our energy portfolio away from fossil fuels. The DOE study also finds 20% wind could create over 500,000 new jobs, making it difficult for you to claim that wind energy is not a powerful job creation tool.
Unfortunately, the misstatements don’t stop there. Mr. Bell also attacks the Midwest ISO’s (MISO) Multi-Value Projects (MVP) cost allocation proposal by stating that, “Federal Energy Regulatory Commission (FERC) Chairman Jon Wellington [sic, Wellinghoff] announced plans to impose a $300 million to $500 million surtax on utility bills to cover the costs of creating renewable power transmission lines across 13 Midwest states.” To begin addressing this misinformed statement, characterizing this as Mr. Wellinghoff’s plan is simply incorrect. Not only did the MVP plan originate from the Midwest ISO, but 83% of MISO states approve of the proposal. In addition, MISO’s proposal would proportionately allocate costs from new transmission lines to ratepayers based on reliability and economic benefits, not arbitrarily spreading the costs around as Mr. Bell would have his readers believe. What’s more, these additional costs are a small proportion of consumers’ utility bills, averaging about 7% nationwide and only 4% in MISO member Michigan. If every single “Starter Project” line proposed under the MVP plan were approved (an unlikely scenario that would cost $5 billion), Midwest ISO ratepayers’ utility bills would only increase by $0.60 per month — a number that looks much different than Mr. Bell’s alarmist “$300 million to $500 million surtax.”
The United States should make much-needed investments in transmission infrastructure to harness location-constrained renewable energy resources that will increase U.S. energy independence, increase national security, reduce costly blackouts, reduce greenhouse gas emissions, and create good manufacturing and construction jobs that can’t be outsourced. Misleading arguments such as Mr. Bell’s will unfortunately maintain the status quo, keeping the United States dependent on dirty fossil fuels and foreign oil instead of utilizing this opportunity to transition the United States towards a clean and safe energy future.
On Thursday, October 21, the National Clean Energy Transmission Initiative (NCETI) hosted its second major forum on clean energy transmission in Des Moines, Iowa. Co-hosted with the Iowa Environmental Council, ITC Holdings, Wind on the Wires, the American Wind Energy Association, Fresh Energy, and the Environmental Law and Policy Center, the forum brought together state and federal lawmakers, industry leaders, environmental and renewable energy advocates, and member of the public to learn more about how clean energy transmission can help revitalize the struggling Midwestern economy while simultaneously helping to protect the environment.
The forum convened experts from around the country to discuss expanding and modernizing the electrical grid, a necessity for linking remote renewable resources like wind from the Great Plains to the cities and towns where people live. Panelists discussed topics ranging from economic growth and revival, to environmental protection and conservation, to overcoming barriers to increased clean transmission.
Senator Tom Harkin opened the forum with a keynote address on the need to make Iowa a leader in renewable wind power, stating that it is both an economic and an environmental imperative to develop Iowa’s abundant wind resources. He emphasized that Iowans are developing a thriving wind turbine manufacturing industry, as well as a nation-leading wind power generation industry.
Roya Stanley, Director of the Iowa Office of Energy Independence, honed in on the economics of clean energy in her presentation. She discussed the main benefits to Iowans and Midwesterners from increased wind energy, which include increased savings from the use of local renewable energy sources and increased revenues from the exportation of wind power to neighboring states. To fully develop Midwestern wind, however, Stanley emphasized the need for additional energy infrastructure to give the green light to the estimated 300,000 MW of wind projects that are currently on hold nationwide because of a lack of transmission.
NCETI is planning a number of additional transmission forums across the country, so bookmark our events page and stay tuned for a forum near you.
Watch videos from the event below:
To view speakers’ PowerPoint presentations, please click on the links below.
Two local media outlets, Bleeding Heartland and IowaPolitics.com, have covered the upcoming NCETI event this Thursday, October 21st, at the Iowa Public Library. The event features keynote speakers Senator Tom Harkin (D-Iowa) and Iowa State Renewable Energy Czar Roya Stanley.
WHAT: Expanding and Modernizing the Electrical Grid: Essential Infrastructure for the Midwest’s Clean Energy Future
WHO: U.S. Senator Tom Harkin (D-IA); Roya Stanley, Director, Iowa Office of Energy Independence; and representatives from: Environmental Law and Policy Center, American Wind Energy Association, Utility Workers Union of America, ITC Midwest, LLC, the Iowa Farmers Union, and others.
WHEN: Thursday, October 21st from 9 AM – 3:30 PM
WHERE: Des Moines Public Library, 1000 Grand Avenue, Des Moines, Iowa
The Energy Future Coalition, in cooperation with the National Clean Energy Transmission Initiative, is planning two clean energy transmission community forums this summer – one in Des Moines, Iowa and the other in Portland, Oregon.
Both events will be expert forums on the critical role of transmission in enabling the development of renewable energy resources such as wind, solar, and geothermal. Leading national and regional experts on renewable energy and transmission will discuss key issues in renewable transmission including planning, cost allocation, and siting, as well as the roles for local, state, regional, and federal actors. Participants include representatives from a broad range of organizations such as electric utilities, environmental interest groups, elected officials, businesses, and labor unions.
The first event will be held in Des Moines, Iowa, although the date is to be determined. This event is organized by The Energy Future Coalition in cooperation with the Iowa Environmental Council, ITC Holdings, Wind on the Wires, the American Wind Energy Association and Fresh Energy.
The second event will be held on July 14th in Portland, Oregon. The Energy Future Coalition, in cooperation with the Renewable Northwest Project, Climate Solutions and the Northwest Energy Coalition, is hosting