Good Things Come to Those Who Wait?

by Bruce Goodman, Energy Lawyer

In May 2011, in front of 40 of Michigan’s top leaders in clean energy manufacturing, Governor Snyder presented the first Reinventing Michigan Award to Energetx Composites. Having waited impatiently for four months, this group of entrepreneurs (ready to unleash their economic gardening skills, resources, and innovation) asked the Governor for his energy policy. Answer: his energy policy would be forthcoming “in the fall”. In August, when Valerie Brader was named the state’s energy policy officer, Mike Finney stated “Energy concerns are at the center of our economic future, whether we are talking about its cost and availability or job creation and new business potential in green energy manufacturing.”  Then word went out that the Governor’s energy policy statement would be pushed to the first quarter of 2012. More waiting for those concerned about: RPS, standby rates, distributed energy, bioenergy, offshore wind, deregulation, customer choice, coal-fired generation, solar manufacturing, and advanced energy storage. The State of the State message last week yielded another setback: energy policy is being pushed off until “this fall”. Michigan has been treading water on energy policy for over a year. We are in a policy twilight zone. Elected officials need to hear from the clean energy manufacturing community now. Policy delayed is policy denied.

New Bio-economy Research Center at MSU

by Bruce Goodman, Energy Lawyer 

With an initial goal of developing cost effective, off-the-shelf anaerobic digestion technology for small and medium-sized farms, Michigan State University has established its Anaerobic Digester Research and Education Center. The Center brings together resources that were spread across four laboratories on the East Lansing campus. There are already 150 manure digesters at large dairy farms across the nation, with the potential for 8,000 more according to EPA estimates. If all sites implemented biogas systems, they could generate 1,500 MW of renewable energy. Michigan has 6,000 small to medium dairy farms that are being targeted under the MSU effort.

Pioneering Technology to be Used at Cellulosic Biobutanol Refinery

by Bruce Goodman, Energy Lawyer 

Cobalt Technologies and American Process Inc. have agreed to build the world’s first industrial-scale cellulosic biorefinery to produce biobutanol in Alpena.  The continuous fermentation and distillation technology will convert cellulosic biomass feedstock into fermentable sugars that will be used to produce ethanol and biobutanol.  The biobutanol can be used “as is” in paints, coatings and blended with gasoline, diesel and ethanol, or it can be converted into bio-based plastics or full performance jet fuel.  Ethanol production will begin in early 2012, with a switch to biobutanol later in the year.  Funding for the project includes grants of $18 million from the U.S. Department of Energy and $4 million from the State of Michigan.

Demo Energy Crops Planted in Midland

by Bruce Goodman, Energy Lawyer 

Dow Corning Corporation will soon have a bio-mass energy facility built at its Midland location which will  supply steam and up to 40 MW of electricity.  To be owned and operated by Midland Power Station, formerly Cirque Energy, the electricity and steam will be generated through the gasification of such feedstock as tree waste, energy crops and agricultural waste.  Experimentation with ten test plots of various perennial energy crops has begun as employees recently planted giant miscanthus, switch grass, big bluestem, Indian grass, sorghum, willow, and poplar trees on adjacent properties.  ”It saves money; it saves the environment, ” explains Cameron Fryzel, a summer intern working on the project. 

Mascoma to Raise More Money in IPO?

by Bruce Goodman, Energy Lawyer

Mascoma Corporation, yet to break ground on its Kinross, Michigan non-food cellulosic ethanol facility, plans to raise up to $100 Million in an initial public offering (IPO) of stock.  The company has developed technology and genetically modified yeast with the potential to cut the cost of breaking down cellulose and fermenting the sugar.  It is already producing ethanol from wood on a demonstration scale at its facility in Rome, NY, and its affiliate Frontier Renewable Resources is developing the commercial operation at Kinross.  The air permit for the facility was issued in July.  Investors in the parent company include General Catalyst Partners, Kleiner Perkilns Caufield & Byers, VantagePoint Venture Partners, Atlas Venture, Valero, General Motors, Pinnacle Ventures, Flagship Ventures, Khosla Ventures, U.S. Department of Energy, State of New York, and the State of Michigan.

Energy Center Planned for Site TBD on Muskegon Lake

by Bruce Goodman, Energy Lawyer

Two West Michigan companies, L3 Combat Propulsion Systems of Muskegon and Rockford Bergé of Grand Rapids, have organized the Michigan Wind Energy Consortium. With the support of other local companies, they intend to take advantage of Muskegon’s deep-water port capacity and the area’s manufacturing capabilities to build parts for wind turbines and ship them around the world. The industrial center may begin as a wind turbine hub, but could support other advanced manufacturing, shipping, research and development, testing and education activities as it develops. The economic development effort will bring together private companies, local government, economic development agencies, and colleges. The proposed West Michigan Economic Partnership between Kent and Muskegon counties is also key to the project.

Coal Plant(s) Off the Table

by Bruce Goodman, Energy Lawyer

Consumers Energy has canceled the $2.3 billion 830 MW supercritical coal-fired power plant for which it had successfully obtained an air permit in late 2009. The recession and slow economic recovery which have reduced customer demand, a surplus in Midwest generating capacity, and low natural gas prices, were all given as reasons for the decision. The company will also suspend operations of seven smaller coal-fired units on January 1, 2015; two at Karn Weadock, three at J.R. Whiting, and two at B.C. Cobb generating plants. Environmental upgrades at its five remaining coal-fired units are estimated to cost $1.6 billion. The shutdowns and upgrades together will reduce the company’s overall air emissions by 90 percent. Meanwhile, Consumers Energy’s 100 MW wind farm is now under construction in Mason County and will be ready in late 2012, and its 150 MW wind farm in Tuscola County will commence operations in late 2015.

If I Ruled the World (or maybe just the State)

by Bruce Goodman, Energy Lawyer

Five elements to include in an energy policy for Michigan:

BIOMASS ENERGY: Make use of the energy in biomass that is going to waste in this state. The BTU content of the “unused biomass” in the state of Michigan is enormous. 

ENERGY EFFICIENCY/CONSERVATION: Make better use of our existing energy resources. Because our energy costs are so low, citizens and industry are not very aggressive in avoiding the “waste” of electricity and fuels. Increasing the price of energy (a carbon tax would be a start with a redistribution of the revenues to accomplish energy efficiency) is an option that deserves serious consideration.

DEREGULATION/CUSTOMER CHOICE ON ELECTRICITY: Reintroduce competition into the purchase and production of electricity. The deregulation of Michigan’s electric industry which was begun in 2000 was reversed in 2008. Just as competition in the telephone industry drove down prices and fostered innovation, the same competitive effect could drive Michigan’s electric industry.

ENCOURAGE ELECTRIC VEHICLES: Make electric cars work in Michigan. The state has placed a huge bet on the success of the electric vehicle industry; it is time to lead the nation in electric vehicle ownership. State government should fill its fleets with electric vehicles and the infrastructure for electric vehicles needs to be built out. Consider tax incentives for vehicle purchases.

BE A MODEL FOR RENEWABLE ENERGY: Made-in-Michigan renewable products and technology could lead the world. Michigan already is a leader in the solar energy field with Hemlock Semiconductor and  United Solar Ovonics; we need to demonstrate how this technology can be adapted for integration into buildings, the electric grid, and society. Similarly, Michigan has fledgling biofuels, biomass, wind, and geothermal industries and technologies that need to be strongly encouraged, whether with grants, tax incentives, or other assistance. To make Michigan a showcase for the implementation of these technologies, we need a larger renewable portfolio standard (from 10 percent to 25 percent) and the removal of barriers to self generation (i.e.  unreasonably high standby rates and unreasonably expensive interconnection charges).

These may not be the top five, but they deserve to be near the
top of the list.

Update on Wind Farms in Michigan

by Bruce Goodman, Energy Lawyer

Wind farm projects and plans are cropping up all around Michigan. The Gratiot County wind project commenced construction in September and is starting to give tours. The Muskegon County Board has just approved a proposed lease agreement that gives Muskegon Wind LLC, a partnership between Gamesa Energy USA and Scandia Wind Offshore, exclusive rights to research and investigate the suitability of constructing a wind farm on the County’s wastewater treatment site. Duke Energy has narrowed the potential location for its Gail Windpower project to Pleasanton and Joyfield Townships in Benzie and Manistee Counties. Construction commenced on November 7 at the Lake Winds Energy Park being developed by Consumers Energy in Mason County, with the delivery of 56 Vestas V100-1.8 MW turbines scheduled for the first half of 2012. The Huron County Board of Commissioners has approved the creation of the Deerfield Energy Overlay District in the northeast portion of that county. Meanwhile, 63 proposed wind turbine sites in southeast Lenawee County have been ruled a presumed hazard by the FAA due to their proximity to the Toledo Express Airport. For more on proposed projects, see MPSC wind farm summary at www.tiny.cc/miwind.

Spotlight on Chief Energy Policy Officer

by Bruce Goodman, Energy Lawyer

Valerie Brader, Governor Snyder’s new Chief Energy Policy Officer, has been on the job since September 12.  This week she has been moved from offices at the Michigan Economic Development Corporation to the Governor’s Office.  A Harvard Law School graduate, her energy experience includes clients in the advanced battery industry, non-profits working on energy efficiency issues, and companies affected by Federal Energy Regulatory Commission rulings.  Although the Governor has previously stated he would announce his energy policy in the fall of 2011, Brader has indicated that because of her own late appointment this date has been pushed back to the first quarter of 2012.  Two of her recently expressed concerns are energy prices and energy reliability.  She has been quoted as saying:  “The Governor wants an energy policy that is sustainable, as I said before, both economically and environmentally.”