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Executive Summary
Michigan
does not need and should not pay for new coal-fired or nuclear power plants to
meet our electricity needs. Instead, our state should pursue a New Energy
Future based on energy efficiency and home-grown renewable energy resources.
Such a New Energy Future would create jobs, save consumers
money, stabilize energy prices, make Michigan more energy independent, reduce
long-term economic and environmental risk from global warming pollution and
ensure that more of Michigan’s energy dollars stay in the local economy, as
opposed to paying for coal, gas and uranium from out of state.
In this report, we use an economic and environmental model
to compare the impacts of an innovative New Energy Future scenario (which
eliminates growth in electricity demand through energy efficiency and generates
25 percent of electricity sales from renewable sources by 2025) with Governor Granholm’s
21st Century Energy Plan (which makes a smaller commitment to efficiency and
renewables), and with a business-as-usual scenario (which includes no efficiency
or new renewables).
The New Energy Future scenario provides the strongest
benefits for Michigan’s
economy and environment, and should form the central part of the state’s energy
plan.
Clean energy creates
good jobs.
- The
New Energy Future scenario would create 88,000 person-years of employment through
2020 (vs. business as usual), 60,000 more than the 21st Century Energy
Plan. Moreover, the New Energy Future scenario would increase wages paid
to Michigan
workers by a cumulative total of $3.3 billion through 2020, $2.3 billion more
than under the 21st Century Energy Plan. (All dollar figures are reported
as undiscounted 2006 dollars.) While both plans would create more jobs and
increase wages further than business as usual, the impact of the New
Energy Future scenario would be about three times larger.
- Michigan spends
more than $18 billion per year on imports of fuel from out of state, a
tremendous drain on the state economy. Clean energy creates jobs by replacing
expenditures for fuel with expenditures for labor and materials produced
at home.
- Harnessing
Michigan’s
well-developed industrial base to manufacture renewable energy and energy
efficiency technologies for use and export would provide additional
significant economic advantages.
Clean energy saves
consumers money on electricity and gas bills.
- The
New Energy Future scenario will save Michigan residents and businesses a
total of more than $2.2 billion through 2020, while the 21st Century Energy
Plan would yield $1.2 billion in savings (compared to business as usual). By enabling Michiganders to spend energy
bill savings for needs other than energy, clean energy stimulates the
local economy and creates jobs.
- The
New Energy Future scenario makes a substantial commitment to energy
efficiency and renewable energy, requiring a large influx of capital that
yields larger benefits over the long-term.
Clean energy prevents
pollution.
- During
the year 2020, the New Energy Future scenario would reduce annual power
plant air pollution by about 30 percent vs. business as usual.
- Through
2020, the New Energy Future scenario would prevent the emission of a
cumulative total of:
- 170
million metric tons of carbon dioxide, the leading global warming pollutant;
- 260,000
tons of soot-forming sulfur dioxide;
- 90,000
tons of smog-forming nitrogen oxides; and
- 1,000
pounds of mercury, a neurological toxicant.
- These
air pollution reductions are more than twice as much as the 21st
Century Energy Plan would yield.
Clean energy shields Michigan from the economic
and environmental risks of
building new
coal-fired power plants.
- If Michigan chooses to
build new coal-fired power plants, it will increase the state’s emissions
of global warming pollution. Without a large reduction in emissions,
global warming could dramatically impact the state over the next
century—doubling or tripling the number of days in Detroit with highs of
90° F or warmer, reducing the volume of the Great Lakes, causing droughts,
crop failures, extreme weather events, and more.
- The
growing urgency of addressing global warming makes limits on carbon
dioxide pollution a virtual certainty for the future. As these limits are
set, coal-fired power will become more expensive. Utility companies and their
shareholders may be forced to pay significant costs for pollution credits
or for carbon capture and storage—damaging the state economy.
- Because
energy efficiency and renewable energy emit no global warming pollution,
they can help shield Michigan
from these risks. And because renewable energy is not tied to finite fuel
supplies, it can also shield Michigan
from the economic risk of fuel price increases.
Michigan could eliminate the need to build any new
coal-fired power plants by using energy more efficiently.
- By
investing $225 million per year in an effective energy efficiency program,
Michigan
could eliminate growth in electricity demand, greatly reducing pressure to
build any new coal-fired power plants (or other new fossil-fuel or nuclear
facilities).
- In
contrast, the 21st Century Energy Plan recommends an energy efficiency program
funded at only $68 million per year. This program would allow Michigan’s electricity demand to continue to
grow at about 0.9 percent per year—failing to alleviate the need to build one
or two new coal-fired power plants.
- Efficiency is the most cost-effective energy
resource for Michigan.
Efficiency programs save energy at half the cost of building, fueling and operating
a new power plant. States with active energy efficiency programs typically
achieve energy savings at an average cost of 3 cents per kWh or less, compared
to a cost of energy of about 6 cents per kWh from a new power plant. The Energy
Efficiency Resource Assessment in Michigan’s 21st Century Energy
Plan estimates that a large block of savings can be achieved for even less—2.57
cents per kWh.
Using local
resources, Michigan
could dramatically increase generation of renewable electricity.
-
The technical potential for renewable energy
generation in Michigan
is large. On-shore wind energy, biomass
and solar energy could together produce the equivalent of more than two-thirds as
much electricity as Michigan
currently uses per year.
- The potential of off-shore wind energy alone far
exceeds Michigan’s
current electricity needs. Tapping into just a fraction of this potential, Michigan could launch a
new industry and become a regional leader in renewable energy use and clean
energy technology manufacturing.
- Renewable energy sources currently cost the same
or slightly more than conventional power generation, but have major advantages
in avoiding future fuel price increases and future environmental costs such as
carbon taxes. Plus, costs are projected to decrease as demand for renewable energy
ramps up, and fossil fuel prices continue to climb.
Policy
Recommendations
Now is the time to move Michigan toward a clean energy future. Michigan has a once in a-generation
chance to change course— from old and dirty fossil fuel-based energy to a more
efficient economy powered by renewable energy. To make this future a reality, Michigan’s leaders
should:
- Restart energy efficiency programs.
Michigan
should aim, at minimum, to meet all future growth in demand for electricity
with energy efficiency improvements. The state should require its utility
companies to create and fund energy efficiency programs sufficient to
reduce growth in electricity demand to zero. In addition, Michigan should
update residential and commercial building codes, set stronger appliance
efficiency standards, and implement a “Pay As You Save” (PAYS®) program to
help extend the leverage of energy efficiency program funding and improve the
penetration of energy efficient products into the marketplace.
- Adopt a renewable energy standard of
25 percent by 2025. Michigan
should require utility companies to generate a large and growing share of their
electricity from in-state renewable sources of energy, reaching 25 percent
of sales by 2025. The standard should focus on truly renewable resources
like wind, solar and clean biomass—and exclude toxic sources of energy like
trash incineration.
- Reject new coal-fired or nuclear power
proposals. By implementing strong energy efficiency and renewable energy
programs, Michigan
could eliminate the need for new coal-fired or nuclear power plants. State
leaders should implement clean energy programs and priorities first,
before considering irresponsible and expensive proposals for new
generation.
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