By Jim MacInnes
---- — Why not import clean energy using wires instead of railroad cars?
"Please send me your clean, affordable, reliable and fact-based solutions to where we will get electricity 24 hours a day, seven days a week and 365 days a year," was a recent request by one of our region's electricity providers.
Michigan has a long history of meeting its power supply needs from generation built within our state and we import 37 million tons of coal each year in order to do this. Even the new 25 x 25 renewable energy ballot proposal requires a 100 percent "in-state" mandate in order to achieve its 25 percent renewable energy goals. The least-cost energy solution for Michigan ratepayers, however, is more likely to be a combination of in-state and regional generation, according to the Midwest Independent System Operator (MISO), which operates our 11-state power grid.
Why not import clean energy, using wires instead of railroad cars?
It makes sense to source new wind projects in Michigan. DTE Energy's 140-megawatt Huron Wind Project is forecast to operate at a 47 percent capacity factor and generate electricity at a cost of about 5.5 cents per kilowatt-hour. It's good business for them to invest $500 million in wind projects in Huron and Sanilac counties. If we are willing to think outside the box, however, we can open a much larger field of clean, affordable and reliable energy solutions.
MISO's Midwest Transmission Expansion Plan, MTEP-11, proposes upgrades to the transmission infrastructure that would allow for low-cost energy imports to Michigan by relieving constraints that limit the flow of economic energy from the western MISO regions. Some large wind power projects in these regions offer electricity costs as low as 3 or 4 cents per kWh, which could benefit Michigan ratepayers.
All power plants are intermittent. Intermittent wind power can be accommodated using: 1) advanced wind forecasting techniques; 2) normally available operating reserves ("backup"), of 12 percent to 18 percent of total system demand, which are used during power plant outages; 3) energy storage systems like the Ludington plant; 4) demand-side management (e.g. our business periodically cuts demand by as much as 3 megawatts), and; 5) energy balancing between geographic regions via the MISO transmission infrastructure. This is how the power grid operator keeps the lights on.
In a recent Michigan Public Service Commission electric utility case the cost to back up intermittent renewable energy in 2012 was shown to be less than 0.5 cents per kwh using capacity available from the power grid.
Compare the cost of new large wind power, including electricity back-up electricity from a new coal plant, reported by the MPSC to cost 13.3 cents per kWh, not including its back-up costs.
High energy costs are like a tax. As a large power user I would like to see more wind energy in our power supply portfolio because it is clean, affordable, reliable and has zero fuel cost. It will also help inoculate Michigan ratepayers against inevitable fossil fuel cost increases to come.
About the author: Jim MacInnes worked as a power engineer for the company that designed the Ludington Pumped Storage facility. He has held a professional engineer's license and membership in the electrical engineer's professional association for over 30 years. He is chair of the Michigan Utility Consumer Participation board, whose job it is to fund qualified interveners in electric and gas utility rate cases before the MPSC on behalf of residential ratepayers. He is also the CEO of Crystal Mountain resort.
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