The wind industry has come a long way in Michigan.
Since the passage of a comprehensive energy statute in 2008 that included Michigan’s Renewable Portfolio Standard (RPS)—10 percent renewable energy from all the state’s utilities by 2015—costs have dropped at a remarkable rate.
Wind power is now Michigan’s cheapest option for new generation, and one of the cheapest additions to the generation fleet, even without the on-again, off-again federal Production Tax Credit (PTC).
What’s more, the amount of power these machines generate has increased to capacity factors that rival base load—over 40 percent for some new farms in Michigan. Five-minute incremental forecasting, which allows MISO, the transmission grid operator for our region, to adjust for changing wind conditions and ever-shifting overall supply and demand, has improved so dramatically that it has at times seen more than 25 percent of its service area satisfied by wind generation.
That compares very well with Iowa, one of the wind-power champions, which routinely handles 40 percent wind power.
In other words, Michigan utilities and our energy industry have met the RPS easily and, frankly, are able to build right past it.
In fact, wind has proven to be such an effective technology that it has succeeded even while playing against a stacked deck of federal support for other energy sources—subsidies that rarely are mentioned when renewable energy opponents criticize the PTC.
But, despite this great track record, questions about the future remain.
While Michigan was meeting the RPS, Gov. Snyder set our policymakers along a crucial, deliberative path. In November of 2012, the governor offered his first Special Message on Energy and the Environment, which focused on eliminating energy waste and keeping energy policy adaptable for the future.
The tenets he laid out then—affordability, reliability, adaptability, and protecting the environment—were explored in depth through a year of statewide listening sessions and in-depth technical analysis. Those four pillars are the same ones he outlined three week ago when discussing his approach to energy in 2015.
I applaud the governor for his focus. I’m happy to point out that, based on those pillars, wind should be a big winner going forward. Wind energy in Michigan has, in fact, proven to be affordable, reliable, and environmentally benign, and in a way that makes our energy mix more adaptable.
Still, questions remain, and the industry is talking about them.
There is a continued need to talk about siting. The Thumb has a large majority of the wind farms in Michigan because it has the best wind. How can Michigan make good decisions in concert with local communities about balancing economic development with the non-economic needs of the community?
What does the Clean Power Plan mean as policy makers consider the path forward for the state? It is critical that EPA lay out how states will get credit to clear the path for additional policy measures now.
The fits and starts of both federal and state energy policy are terrible for business. How much more contraction will take place in Michigan because of the lack of certainty? The state’s RPS was mostly met last year. But without any signal on state policy, like a renewed RPS or other wind-friendly signal from Lansing, we have already seen businesses pack up and move on. That trend will likely continue unless we do something tangible to keep them here.
Another recurring theme has been the rising tide of corporations investing in renewable energy. Big companies investing in their own renewable sources include Google, Microsoft, Ikea, and home-team firms from large to small, including GM, Herman Miller, Steelcase, Dow Corning, and Bell’s Brewing.
In Michigan, both major utilities say that wind fits into their future portfolios due to improving economics and better technology.
There is a desire to act on legislation this year.
These themes are important, and need to be thoughtfully dealt with by policymakers, industry leaders, and Michigan communities.
Make no mistake: wind energy is good for Michigan. As the lowest-cost option, it’s helping to reduce the highest electricity rates in the Midwest. As locally generated power, it’s delivering real benefits for Michigan communities while creating jobs for Michigan workers—both making the parts and installing the final product.
But we can do more. Much more.
Now is the time to act. Wind power fits neatly into Michigan’s future generation portfolio by virtue of improved forecasting, accelerated engineering designs, increasing capacity factors, decreasing costs, and protection of one of our most precious resources—water.
Now is the time to build better policy on Gov. Snyder’s deliberative foundation.
By any measure, the 2008 energy law has been a resounding success: More than $2 billion in direct investment as a result of Michigan’s wind industry. Millions in local tax revenue. A resurgence of Michigan’s manufacturing base, with Michigan firms helping to supply the parts that make Michigan wind happen.
And, it cannot be overemphasized, at a fraction of the cost that was anticipated just seven years ago.
Indeed, it’s difficult to think of a more impactful, more cost-effective public policy measure that’s been enacted in the last 20 years in our state. More local energy, more local jobs, all with less pollution and at less cost.
Truly, what’s not to like?
So the evidence is in. The numbers have been crunched. Wind works for Michigan. The last decade has delivered real results.
Now let’s make sure the next ten years are even better.