September 2010 BusinessBusiness $2.00 updateupdate 1993-2010 ublicationublication Features: Corporate Lodging Meetings & Catering Engineering Design-Build Construction Financing Health Insurance Wind Energy in Michigan 2 By David Calkins world's wind generation capacity has dou- number of pragmatic issues that must be simply efforts to jump on an environmen- bled every three years, and according to discussed in order to correctly utilize it. tally-friendly bandwagon: Michigan has Wind power has seen major advance- the 2009 World Wind Energy Report, all Even then, wind power is an intermittent become particularly guilty of outsourcing ments in recent years, making it an attrac- wind turbines installed worldwide were and non-dispatchable energy form, and as our energy needs to other state's tive alternative to more conventional but generating an electricity output equivalent such, will never completely replace depend- resources. More than half of Michigan’s less renewable or environmentally-friend- to the total demand of Italy. ence on traditional forms of energy. electricity (69%) is generated by burning ly sources of energy. Compared to fossil In recent years, the United States has However, recent government initia- coal and natural gas. As our state has no fuels, wind power is relatively plentiful, remained the number one global leader in tives and policies have gone into place to domestic coal resources and only supple- totally renewable and widely distributed installed wind capacity and Michigan has push for more wind power development, ments around 30% of its gas needs with with negligible impact on the environment received much attention for its wind especially in Michigan. In 2008, Governor our reserves in the Antrim shale, a good and no greenhouse gas emissions pro- potential. One study estimated that the Jennifer Granholm signed into law the 60% of our energy is imported from other duced during operation. A Stanford wind resource over and around the Great Clean, Renewable and Efficient Energy Act states and western Canada. Our three University study in 2005 estimated that Lakes alone equated to one third of the of 2008 (PA 295). This Act requires that nuclear power plants (Donald C. Cook, potential of wind power on land and near- current U.S. electricity demand. Michigan’s electricity providers generate Fermi 2, and Palisades) generate 25% of shore to be five times the world's current Wind power in general has an around ten percent of their electricity using our electricity, but nuclear power remains a energy use in all forms. Since 2000, the extremely large potential, but there are a renewable sources by 2015. This is build- controversial option in terms of economic ing towards the state's ambitious goal of viability and environmental concerns. reducing state government grid-based Michigan has a unique profile for energy purchases by 25% by 2015. potential wind sites as estimated by PA 295 also established a system of numerous agencies and research studies renewable energy credits (RECs) which that have been conducted in recent years. may be traded, sold, or banked by electric- According to the American Wind Energy ity providers. A special class of "Michigan Association (AWEA), the state's wind Incentive" RECs was also created – bonus resource is ranked 17th in the nation, credits for actions like using solar power, and a resource assessment from the generating at peak demand or using equip- National Renewable Energy Lab estimat- ment made in Michigan by local residents. ed our wind resources could provide Providers will be expected to meet their 160% of our state’s current electricity 10% renewable requirement by either needs. Of course, not all potential sites using renewable sources or by purchasing for wind development can or indeed or trading these RECs. should be utilized because of environ- This set of laws makes up mental, geographic or other reasons. Michigan's Renewable Portfolio Standard Michigan does however have a unique (RPS) and we're neither the first nor the advantage: the Great Lakes. Michigan State last state to implement one. Well over University’s Land Policy Institute estimates half of all the United States have set up that the total power available offshore in their own RPS mandates, some of which Michigan is more than triple that of land- are extremely ambitious. In 2002, based wind energy facilities. Our state has California mandated a 1% expanded sole jurisdiction of about 40% of the Great renewable profile each year reaching 20% Lakes surface water area and owns 38,000 in 2010. Governor Schwarzenegger square miles of bottomlands. The Michigan passed yet another mandate in 2008 call- Great Lakes Wind Council reported that ing for a 33% RPS by 2020. Michigan’s deep water ports are uniquely While these energy mandates are suited to support regional, national and issued by the state, the job of managing international shipping and deployment of deployment of wind energy facilities is wind turbines, and the freshwater of the delegated to local governments. In West Great Lakes has the potential to make wind Michigan, the Ottawa County Planning projects easier and cheaper, leading to Commission partnered with the Michigan greater infrastructure durability than in State University Extension Office to saltwater regions. design their own wind ordinance that However, wind power is not without established rules for turbine installment its difficulties. The Great Lakes' fresh water and operation only with a special-use often experiences substantial winter ice permit and only in non-residential areas. cover, so potential wind farms may face Other townships have since adopted sim- more icing issues that their saltwater com- ilar ordinances based on Ottawa's model, panions. Poorly-sited wind turbines could and these regulate most wind farms interfere with recreation, the charter fish- throughout Michigan. About 70% of all ing community and the tourism industry of west Michigan townships either have coastal towns. Even the aesthetic appeal their own ordinance or are in the process (or lack thereof) of the turbines themselves of developing one. has always been a hotly debated issue. Though "going green" and "sustain- This isn't to mention challenges regarding ability" have become popular buzz words site selection and assessment, financing, in recent parlance, these legislative actions construction and logistics. – ordinances and PA 295 alike – are not Continued on page 3 Wind Energy in Michigan 3 Continued from page 2 Even with the complexity involved PA 295, The Land Policy Institute at mal and even landfill gas are all being con- in financing, constructing, citing and Michigan State University estimated that sidered as potential supplements to Existing electricity transmission operating wind power in Michigan, the 1,250 utility-scale wind turbines would Michigan's energy needs. Much attention infrastructure is yet another critical com- push towards renewable energy contin- need to be installed. will need to be given in the future to prop- ponent for wind energy deployment. A ues to be strong. The Michigan Bureau of This of course assumes that Michigan erly developing these resources not only in report from the nonprofit nonpartisan Energy Systems forecasts more than will meet its renewable energy needs pure- our state, but nationwide as well, if we are independent researchers "Resources for 2000 megawatts of wind energy capacity ly with wind. Wind power is only one of to finally get our energy consumption the Future" stated that, “Without ade- will be installed in Michigan by 2015, up the many new and exciting forms of under control and start making a realistic quate and accessible transmission capac- from the current 130 megawatts. To meet renewable energy Michigan can pursue in dent in our dependency on foreign ity, renewable projects are unlikely to the 10% renewable energy standard in the future. Biomass, solar, hydro, geother- resources both state and nation-wide. cross the threshold of economic viability, and without adequate generation capaci- ty to justify new transmission construc- tion, investment in new lines is also unlikely to occur.” Still, clean local sustainable energy isn't the only reason to push forward through these problems and develop Michigan's wind potential. Wind develop- ment opens up new opportunities for job creation and retention by utilizing our state's strengths in advanced manufactur- ing and engineering, supply chain devel- opment and tool and die technology. Joseph Brown, founder of Lintrio Marketing LLC delivered this testimony to the Republican House Strategic Task Force on Jobs held at Macomb Community College late last year: "Without question, this is absolutely the one industry that could prove to be the saving grace of our nation’s critical manu- facturing base. No other market has the potential to witness a mass transition of CNC machining, metal stamping, tool and die and injection mold companies into a viable, sustainable sector than that of wind energy. A single wind-turbine can include up to 8,000 parts and is the best chance we have to save and create jobs." Michigan has already jumped on board in a number of different capacities. Consumers Energy, one of the two largest electric providers in Michigan, plans to meet almost all of its renewable capacity portfolio and renewable credit portfolio requirements through wind energy, even going beyond their state-mandated requirements by adding 900 MW of renewable capacity by 2017. The Great Lakes Energy Cooperative already pur- chases renewable energy from the Harvest Wind Farm. The Holland Board of Public Works is investigating the potential of installing a one to three turbine windfarm at Windmill Island in the city of Holland. Energetx Composites LLC, announced plans last year to invest $37 million to pro- duce wind turbine blades. And 20 compa- nies now comprise the West Michigan Wind Manufacturers Network, a no-cost program The Right Place Inc.