The Latest on Renewable Energy and Energy Efficiency in Michigan

New Coal = $133; Renewables = $98.68, Energy Optimization = $13.25

The following are some insights from the Michigan Public Service Commission’s Report on the Implementation of the P.A. 295 Renewable Energy Standard and the Cost-Effectiveness of the Energy Standards published February 15, 2011:


  • MPSC Staff worked closely with electric providers to determine the levelized cost of new coal to cost $133/MWh; the cost of levelized renewable energy is $98.68; the cost of Energy Optimization is $13.25/MWh
  • The combined weighted average of cost of energy optimization and renewable energy is $52.49/MWh…much cheaper than new coal!
  • Michigan’s 2009 renewable energy percentage is 3.6%, up from 2.9% in 2007
  • DTE and Consumer’s Energy have incurred the lion’s share of the cost of renewables while alternative energy suppliers (AES) have incurred little or no costs complying with PA 295
  • The actual costs of contracts submitted to the Commission show pricing continues to trend downward.
  • The Heritage Garden Wind Farm, (27MW wind) slated for development by CE, is the first large scale production of wind turbines fully made in Michigan!
  • In its 2009 Green Jobs Report the Department of Energy, Labor and Economic Growth indicated that only 9% of green jobs in the state came from the renewable energy.  The report will be updated in 2011 and is expected to show significant growth.
  • 700 MW of new renewable energy will become commercially operational by the end of 2012 in response to the act.
  • Based on contracts filed through 2010, 93% of the new capacity in Michigan will be wind powered.
  • 4 out of15 of Michigan’s rate-regulated electric providers established a revenue recovery mechanism to comply with PA 295.  Costs are much lower than initially expected compared to electric provider projections and costs continue to decrease.
  • Energy optimization credits, unlike renewable energy credits, are non-transferrable.  MPSC is considering amending this.
  • Michigan renewable energy credit (MIREC’s) tracking systems are being designed to fully integrate with other systems nationwide – including the Midwest Energy Tracking System – this will allow business and citizens to sell their renewable energy products to a much wider market.
  • The electricity market has absorbed the initial capacity injections and demand reductions with little or no fluctuation in price, the recent recessionary period decreased demand and prices significantly making market effects difficult to parse.
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