by Bruce Goodman

For many who have been in the energy practice since the PURPA days it seems like history is repeating itself. The Public Utilities Policy Act of 1978 had as its laudable goal the encouragement of renewable energy and energy efficiency. Small power production (renewable) projects and cogeneration (energy efficiency) projects were intended to make the nation more energy efficient and self sufficient. Just as now, ratepayers saw renewable energy and dispersed power as a way to save money while contributing to energy independence. However, progress was impeded by Michigan utilities who challenged the meaning of “avoided cost” and who imposed stifling standby rates. Today the utilities are again impeding the development of alternative energy and again are using purchase power rates and standby rates as two of their weapons. [Setting standby rates at a level that assumes all independent power on the grid will go down at the same time is not appropriate.  Notwithstanding a good start on the standby issue in the new net metering rules, except for very small projects standby remains a hurtle and an impediment.]  Unless the legislature aggressively addresses competitive pricing and standby rates, it may be déjà vu again in Michigan.

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by Bruce Goodman

This month I rediscovered the interrobang (‽), first introduced in 1962. Intended to be used when a sentence is both a question and an excited exclamation, it never caught on. Writers and editors have been satisfied with ?!?! It strikes me that alternative energy is the epitome of the interrobang—both an exciting prospect, but just as often an open question. Alternative energy was last in vogue in the 1980s, as a response to the mid-east oil embargos. Then it was called small power production. Energy independence was the goal. We got the 55 mph speed limit, expanded daylight savings, and CAFÉ standards. This is when the first wind turbines were installed in the U.S. under PURPA. But the electric utilities did not like this statute, another oil embargo did not occur, and the public concern over gasoline prices subsided. Now the “energy crisis” has been rediscovered, global warming has been added, and we have revived some of the old strategies. Here comes alternative energy‽

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by Bruce Goodman

The Department of Energy is ready to fund a new wind turbine test site with a $45 million grant, and Michigan is in the hunt.  Officially called “Recovery Act: Large Wind Turbine Drivetrain Testing Facility” the competition is for the design and construction of a large dynamometer facility.   (A dynamometer is a device used to test a motor or engine or other mechanism for efficiency and torque).  It needs to be sized for testing 5 to 15 MW-rated drivetrains (the components that transmit the flow of power from the rotary motion of the blades/hub to the generator in a wind turbine). The prime applicant must be a state or local government, university, or nonprofit. The expectation is that this will be the test facility for the next generation of wind turbines, many of which may be so large as to only be suitable for off shore projects.  NextEnergy is leading a very strong Michigan team to get this award and to build the facility on the Rouge River.

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by Bruce Goodman

Notwithstanding the recent dramatic moves toward electric and electric hybrid automobiles, for the foreseeable future there will continue to be a high demand for liquid transportation fuels for automobiles, planes, boats, and trains. Moreover, notwithstanding the efforts going into wind and solar energy, the one alternative energy resource that makes economic sense right now, without subsidies, is biomass. Michigan, whose agricultural sector is its second largest industry at $63 billion annually and with a first class agricultural research institution in Michigan State University, is well positioned to respond to these realities. Converting biomass to electrical energy, heat, transportation fuels, and chemical feedstock for industry is already the goal of research being conducted in Michigan public and private laboratories. Imaginative and innovative projects are revealed almost daily. This effort must be continued, and enhanced, through both private and public research and development efforts. We need to improve yield and energy density of crops and improve conversion technology to reduce dependence on foreign oil and renewable fuels in order to move toward energy security and carbon neutrality.

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by Bruce Goodman

There is a disconnect in the public discourse on electric generation in Michigan.  It revolves around the confusion caused by such terms as “capacity”, “availability”, “energy”, “reliability”,  “intermittent”, “firm”, “spot market”, “backup”, “baseload”, “efficiency” and other energy jargon.  Energy policy cannot afford loose talk or loose thinking. The call for energy efficiency and alternative energy requires a better understanding of all these concepts. At the most basic level the public (and its leaders) needs to know that a comprehensive energy policy requires significant baseload capacity (MW) so that  alternative energy as we currently know it (MWh) can successfully contribute to energy security for citizens and businesses.  With an aging fleet of coal burning power plants, a manufacturing based economy, and a history of environmental protection Michigan needs the collective wisdom of economists, engineers, environmentalists, industry, business and politicians to achieve reliable and affordable power and a balanced energy portfolio (and capacity portfolio) of renewable energy, energy efficiency, and replacement baseload generation.

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by Bruce Goodman

For a long time, the energy industry has recognized the value of Michigan’s underground storage capacity, which constitutes ten percent of the nation’s natural gas storage capacity.  Now, with rumblings about cap and trade and the need for carbon sequestering, there is the question of whether there will be a “land rush” for this resource.  This also raises the question of whether Michigan needs new regulations (and perhaps new legislation) to develop, regulate, protect, and exploit this resource.  Although the U.S. EPA is working on rules for underground carbon dioxide storage under the Safe Drinking Water Act, it is unlikely to address the real need for regulations—defining the long-term environmental liability for sequestered carbon dioxide.  Commercial-scale sequestration creates numerous environmental liabilities for entities that will own/operate sequestration facilities or transport carbon dioxide to such facilities, including accidental carbon dioxide releases.   Other states are acting on legislation by transferring the  liability for post-injection carbon dioxide to the state.  Will Michigan act soon enough and be prepared to catch this wave?

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