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Opinion | Michigan regulations impede the move to ‘net zero’ emissions

The state of Michigan’s Council on Climate Solutions just released a draft of its plan detailing how Michigan can hit net-zero carbon emissions by 2050. “Net-zero emissions” has gone from a term only used by energy wonks to a phrase used in corporate boardrooms and political offices across the country. That is fortunate because reaching this demanding mid-century goal will require people and organizations across business and society to work together.

Laura Sherman, Rod Williamson
Dr. Laura Sherman is the president of the Michigan Energy Innovation Business Council. Rod Williamson is the practice group director of energy and environment legal practices at Clark Hill Law Firm and executive director of the Michigan Association of Businesses Advocating for Tariff Equity (ABATE). (Courtesy photo)

But this transition will not be simple. In Michigan, even as the use of renewable energy has grown dramatically, our biggest energy users, like manufacturers, data centers, large retailers and more, cannot shift toward cleaner energy as easily as their peers can in other states.

Earlier this fall, General Motors said it would reach its goal of powering all of its U.S. facilities with renewable energy by 2025. Just five years ago, in 2016, GM had targeted going 100 percent renewable by 2050. That quick progress mirrors what we have been seeing across the universe of companies around the country and operating in Michigan that are trying to zero out their emissions. Many of the other biggest job providers in Michigan like Ford, Kroger and others have declared similar goals to promote their sustainability by cutting their emissions.

Around the country, a multitude of innovative approaches to allow companies to increase their use of renewable energy and invest in clean energy have sprung up, driving economic development and environmental sustainability.

But due to legal and regulatory barriers, many of these options are off the table in Michigan. Ultimately, these barriers will not only slow down organizations that operate in Michigan from reaching their sustainability goals, but also can hurt job growth as we are left behind by other states that attract companies that want to reduce their energy footprint.

In Michigan, companies have made progress toward their goals through on-site renewables, storage, energy efficiency, and combined heat and power, and by buying renewable energy through utility green power procurement programs. These are programs offered by an electric utility, like DTE’s MIGreenPower program or Consumers Energy’s Large Customer Renewable Energy Program, where the customer voluntarily signs up and makes extra payments on their bills that go toward the utility building more wind or solar projects. The customer can select an amount of renewable energy credits to purchase through these programs, thus allowing the customer to be able to claim that some portion of their electricity consumption is from renewable energy.

The problem is that when your only option for off-site renewable energy is your utility, you are picking from a limited menu. You can only choose from the renewables the utility brings to the table, and that menu may not provide the most cost-effective options compared to other sources of renewable energy.

This is why so many large organizations that are moving toward 100 percent clean energy, like Google parent Alphabet Inc. or Apple, are buying power directly from wind farms, solar projects and other renewable energy projects from all over the country. These companies are expanding their menu of options so that the most competitively-priced resources can rise to the top. In some cases, the local utility acts as an intermediary, handling the poles and wires that bring electricity to their facilities, while the company buys their power from non-utility renewable energy projects. But under current Michigan law that grants electric utilities monopoly control over both generation and distribution in their service territories, such an arrangement is not possible.

In much of the country, organizations are not just directly purchasing renewable energy — they are already moving on to more sophisticated methods. The latest trend is matching the renewable energy purchased to a large energy user’s actual demand — hour by hour, 24/7. People are recognizing that while how much clean energy you buy is important, so is when you are buying clean energy relative to when you use energy. Wind and solar energy are not available at certain times, such as at night or when the wind is not blowing. So you can buy large amounts of renewable energy, but if you are also buying electricity at times when renewables are not available, you are still financially supporting non-renewable energy.

As a result, companies like Alphabet and Microsoft are matching the output of the renewable energy they buy to the exact hours when they are using electricity. Doing so helps get the world closer to net-zero emissions than just buying clean energy without matching. Matching is an example of a practice that creates “stronger price signals to drive investment in zero-carbon technologies that better coincide with the timing of customer electricity demand and accelerate carbon emission reductions,” as a recent Columbia University study put it.

In Michigan, however, these sophisticated matching strategies are difficult to pursue. The large utilities that provide most of the electricity consumed in the state do not yet offer these newer methods that would encourage more clean energy use by their customers.

These new sources of renewable energy need not come from outside of our communities. Michigan still has massive untapped potential for renewable energy development that is exponentially greater than the current amount of renewable power capacity, according to estimates by the National Renewable Energy Laboratory. Realizing this potential would be good for Michigan’s economy in the short-term by spurring more jobs and tax revenue, but the larger economic gains would be more long-term. 

To keep attracting and retaining the presence of large companies, Michigan can’t be living in the past when it comes to clean energy. The world is moving forward with increasingly ambitious ways to go green, and Michigan could be left behind.

Bridge welcomes guest columns from a diverse range of people on issues relating to Michigan and its future. The views and assertions of these writers do not necessarily reflect those of Bridge or The Center for Michigan. Bridge does not endorse any individual guest commentary submission. If you are interested in submitting a guest commentary, please contact David Zeman. Click here for details and submission guidelines.

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