Energy policy has never been more important than is today.
Earlier this month the Obama administration released its Clean Power Plan setting new national carbon emission goals for 47 states, including Michigan, requiring an overall 32 percent reduction in carbon emissions by 2030.
Debate over the merits of the plan has, predictably, turned on whether the plan will make energy more expensive. The Mackinac Center believes the Clean Power Plan will drive up energy costs; an analysis by the Michigan-based Institute for Energy Innovation identifies almost a billion dollars in ratepayer savings.
While there is broad agreement that electricity must remain both affordable and reliable, many opponents of the Clean Power Plan are missing the point – the significance of the plan lies not only in the mandated reductions in carbon, but in the fact that it is a gateway to building a new 21st century energy system, and with it comes opportunities for Michigan businesses to both procure clean energy and participate in new energy markets.
The energy transformation has arrived and the way we generate, use and manage energy is changing faster than anticipated. In the absence of a clean energy policy today, the plan is exactly what Michigan needs.
The days of exclusive reliance on central power plants to generate and distribute electricity are already gone. Wind energy has become the least expensive generating resource in Michigan and “distributed energy resources” like solar energy, combined heat and power, and energy storage devices like Tesla’s new Powerwall home battery are becoming competitive with, and will soon be cheaper than, conventional energy sources like coal and natural gas.
At the same time, new energy efficiency technologies and services are enabling unprecedented control over energy demand. Business and industry are using sophisticated energy management systems that allow them to power down during periods of high demand, conserve energy, and profit from reducing overall peak demand on the energy system. Energy efficiency devices like smart thermostats, intelligent appliances and smart meters will soon provide the same for homeowners.
The business community understands that these trends are inevitable and irreversible. Nearly two-thirds of Fortune 100 and nearly half of Fortune 500 companies have commitments to shift to renewable energy and most are investing in making their operations more energy efficient. Google, Facebook, Amazon, Samsung, IKEA, Intel, Costco, and many other high growth companies have set 100 percent zero-carbon energy goals and are beginning to meet their energy needs by generating their own power or by purchasing large wind and solar projects. And note: They are also expanding and making investments in states that have clean energy resources available.
Everyday corporations are focusing more on sustainability, carbon emission reductions and clean energy. General Motors is one of 34 corporations that has signed the Corporate Renewable Energy Buyers’ Principles, aimed at gaining better access to renewable energy from utility electric providers. Steelcase and Herman Miller already derive 100 percent of their energy needs through clean energy power sources.
Make no mistake about it, an energy phase change has arrived. Beyond the market shift to clean energy lie ascendant opportunities for Michigan business and industry. Few other states have Michigan’s capacity for meeting the needs of a 21st century power system.
Who better to design, build and supply the clean energy technologies the market demands than the state with unparalleled prowess in advanced manufacturing, engineering and materials science? Who can better fabricate the drive trains, transmission systems and other components for the wind industry than Michigan manufacturers? What companies are better positioned to serve the solar industry than Dow, Dow Corning and Suniva? Why are electric vehicle companies worldwide sourcing batteries made in Michigan by LG Chem and XALT Energy?
The Clean Power Plan provides both new supply-side and demand-side energy opportunities for Michigan. The plan catalyzes efforts to transition to a modern, 21st century energy system powered by increasingly economical and carbon-free energy sources, promotes and fulfills corporate clean energy and sustainability goals, and provides unique opportunities for innovative Michigan businesses to prosper in the rapidly expanding clean energy markets.
It’s time for Michigan to wake up and embrace the energy transformation.
Stanley Pruss is a principal of 5 Lakes Energy, and former director of the Michigan Department of Energy, Labor & Economic Growth and Michigan’s chief energy officer in the Granholm administration.
Posted by Jamie Scripps, Principal
Friday, August 14, 2015