WHAT’S NEXT?: Sources of renewable energy are as old as the sun and wind, but …

March 14, 2012 by  
Filed under Green Energy News

DTE is not alone in its progress toward reaching renewable energy goals. On Feb. 15 the Michigan Public Service Commission issued its annual report on the implementation of the state’s renewable energy standard and its cost effectiveness.

“Michigan utilities are steadily implementing their plans to reach the goal of supplying 10 percent of their electricity from renewable energy sources,” said MPSC Chairman John Quakenbush.

“As new renewable energy projects become operational — many by the end of 2012 — Michigan’s renewable energy percentage is expected to increase significantly.”

This year’s report includes data submitted by alternative energy suppliers. With their inclusion, the estimated 2010 renewable energy percentage was 3.6 percent.

One of the report’s highlights is the conclusion that by the end of 2012, Michigan’s renewable energy standard will have resulted in the development of 1,041 megawatts of new renewable energy products.

Compared to building a new, conventional coal facility, renewable energy contracts are significantly lower in price, with the exception of five small contracts negotiated early on.

The report states that the two most recent contracts approved by the commission for new wind capacity have costs between $61 and $64 per megawatt hour.

The weighted average price of renewable energy contracts is $91.19 per megawatt hour, less than what was forecast in renewable energy plans. According to the commission, this cost is substantially lower than the cost of new coal-fired plants.

According to annual reports filed by each electric provider, $21.7 million was spent on renewable energy in 2010, and $78.6 million was anticipated to be spent during 2011.

One renewable energy source that has come down in price in recent years is solar.

“Solar is a lot more promising today than it was five years ago,” said Wyandotte Municipal Service’s McCoy.

To illustrate the point, McCoy said her department installed a 10-kilowatt system on the roof of Wyandotte’s Wilson Middle School five years ago and it cost $100,000.

A little more than a year ago the department installed a much larger 220-kilowatt system at the top of its water settling basin at a cost of $600,000.

“The cost of panels have gone way down, so it is a lot more affordable, but it’s still not as cheap as coal,” McCoy said.

However, it is now affordable enough for Wyandotte to be using solar as an important piece of its renewable energy plan.

Although it’s not a renewable energy source, natural gas is considered to be one of the “cleaner” fossil fuels and its price decline could make it more attractive in the future, McCoy said.

“About five years ago, natural gas was three times as high,” McCoy said. “It was almost $14 mcf (per thousand cubic feet) and now it’s in the $5 range.”

Because of high oil prices and the increased ability to access natural gas reserves through a process known as “fracking,” this energy source, with abundant supplies in Michigan, is becoming more popular.

Fracking is a process in which water, sand and numerous chemicals are injected at high pressure deep into the ground to fracture shale rock and force out natural gas. The greatest amount of natural gas reserves is found in the northern half of the Lower Peninsula.

But hydraulic fracking is not without its critics, who have concerns that deeper and deeper drilling could lead to contamination of drinking water.

Regardless of how the fracking debate plays out and how affordable natural gas turns out to be in the future, energy providers still must adhere to the requirements of PA 295 and turn toward renewable sources.

As for Wyandotte Municipal Services, those green solutions are likely to be varied.

Last year it installed its first large-scale geothermal energy system that helped the American Legion’s Edward C. Headman Post 217 become the “greenest” post in Michigan.

Geothermal heating and cooling systems use electrically powered ground source heat pumps to take advantage of the Earth’s high thermal capacity and constant 50- to 55-degree temperature as a sustainable energy resource.

Because it relies on the relatively stable Earth temperature, rather than the extreme swings in temperature of the outside air, the geothermal process is 40 percent to 70 percent more energy efficient than conventional systems.

The utility recently has supplied newly built or rehabilitated houses with a geothermal utility, houses that benefitted from a $7.8 million federal stimulus project.

For all the good reviews geothermal energy receives, it’s not considered a renewable energy.

“Geothermal gives you energy efficiency,” McCoy said. “Of that 10 percent renewable requirement, we can get 10 percent (of that number) for energy efficiency.”

That means in a small way the use of geothermal energy still will count toward the state’s renewable energy goal requirement.

McCoy said it’s likely that the city utility will use a variety of means to reach the 10 percent threshold, or perhaps even surpass it. The city department is part of a hydroelectric project in Ohio, but since the power is generated outside of Michigan it can’t be counted toward the 10 percent requirement.

Wyandotte likely will use a combination of solar, wind and methane (sometimes referred to as landfill gas).

Wyandotte is a member of the Michigan Public Power Agency, which provides economic benefits to its 17 municipal members and is involved in joint ownership of electrical generating plants and transmission facilities, as well as pooling of utility resources. McCoy said WMS has partnered with the Michigan Public Power Agency on a landfill gas project.

In the event any provider of electric service falls short of the 10 percent requirement, it can purchase credits from other sources, but McCoy remains optimistic that most providers will be able to achieve the state’s goal.

“I think Wyandotte Municipal (Services) wins or succeeds with a combination of sources,” McCoy said.

Contact Jim Kasuba at 1-734-246-0881 or jimk@heritage.com . Follow him on Facebook and @JKasuba on Twitter.

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