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Thinking Realistically about Michigan’s Renewable Energy Future Part III

image credit: ID 150074683 © Evgeny Malkov | Dreamstime.com

Part I of this series sets the stage for demand and generation, part II covers storage, transportation and buildings, both really should be read before diving into part III.

Appliances and Media Devices

Michigan has several appliance brands that have research and development in the state, providing some great jobs, mix in the state universities, a goal of moving the bar for energy star appliances, and more great jobs become available in the state. With the opportunity for low cost sustainable electricity, manufacturing jobs may flow back into the state as well. Rather than follow California with creating a one state, or few state standard, Michigan can support this with tax incentives. The tax incentives need to be a moving target, always higher in the next few years to keep people wanting more efficient appliances, Europe has done this moving target for appliances for more than 15 years, leading to more and more energy efficient appliances and media devices, like TVs.

Demand Response

Today Michigan’s idea of demand response is turning off the air conditioners on a hot day. It is the most hated demand response program, not just in Michigan, but everywhere. There is discussion of sending prices directly to all energy using devices, and allowing them, based on what the owner desires, to decide if they will turn off or not. Known as “Prices to devices” and “Transactive Energy”, this kind of a program may provide more reliable demand response in the future and allow the air conditioners to run while the pool pumps and hot water heaters take a nap. What will Michigan experiment with and who will be invited to the experiments, is something the government in Lansing need to think about. Devices in the home and business with the smarts to turn on and off based on a pricing signal are rare today, and if there is not a clear value to buying them, most homeowners will not.

Then there is the ever-present cybersecurity and the neighborhood hacker who just wants to see if they can cause something to happen. Both the long-term value and the security of the devices are items that Lansing must think about and work with the stakeholders to come up with desirable solutions. Again the Universities need to be engaged, because Jill Q Public does not tend to engage in these types of stakeholder discussions, so the Universities will need to poll the citizens of the state, and develop a clear picture of what they would be happy with and how much incentive it will take to make the move.

In this area too, the requirements for a low- or fixed-income household and small businesses need to be taken into account in designing the test programs. Once the test programs have run, then long-term policy can be built for the whole state. Again Michigan can lead if they choose to.

Planning the Transition

The transition to a sustainable energy system will have to happen gradually; people can only afford to pay so much for energy – no matter the form they purchase it in. Plus, utilities are limited by regulations to a limited capacity for investment and installation work in a given period. Even if third parties were offered the chance to help, the engineering and integration work required would limit the amount of work that could be done each year. There are a limited number of people who understand what to do to safely make the changes needed in the existing infrastructure. It takes a significant amount of time to train new people. Given these limits, completing a full transition in a 30 to 50-year time period is probably reasonable for Michigan. This amount of time would allow people to make replacement purchases for sustainable items as their appliances, cars and other devices wear out or become obsolete, rather than forcing them to junk items that still have useful life. By choosing a natural replacement cycle, the transition allows the individual to replace items as they have the money and the need.

For electric transportation for instance, the circuits that exist today were sized and built for household use, not for household and transportation use. Transportation currently consumes as much energy in Michigan as the total electrical use in the state. To provide electricity to charge cars means moving more than twice as much electricity through the system that we use today. Because of the way regulation works in this state, utilities have not been allowed to over-build the system. In many cases, the electric grid is already overloaded on a hot or cold day. More than 90% of the distribution grid would need to be rebuilt to provide power for electric transportation. In some cases, vehicle electrification demands a voltage increase by a factor of ten and increasing the wire size by a factor of five.  Yes, for some distribution circuits a fifty times increase in electricity demand will be triggered by vehicle electrification, even without the increases expected from electric heat. These circuits serve commercial and industrial areas that now draw only lighting and appliance energy from the electric grid and do almost everything else with natural gas. They currently depend on gas stations elsewhere to provide the energy for transportation, but they house a large number of commercial vehicles. Agricultural circuits are another area, where electric transportation (think tractors) will increase the peak load explosively.

In a perfect world, the regulations and planning would change soon to start making these investments today, based on an electric future. If they don’t, the utility will have to touch, retouch and touch again the power systems as the load grows.  The allowed rate of distribution equipment replacement in the state (for non-storm damage reasons) is running just about one percent per year. The current regulations mean that it will be at least 2120 before the whole grid will be equipped to handle the needs of a sustainable future.  and accommodations will have to be made about things like off-site charging or limiting vehicles per company or household.

The Ford Wayne assembly plant is a great example of a facility where load could increase by a factor of 20-50 overnight – just by changing from building the current Ford F150 to building Ford’s upcoming electric pickup truck. Once assembled, those new trucks would need their batteries charged to be able to be delivered safely to dealers across the country.

Transmission systems across the state will lose some of their capability to move power, as coal and other large plants are shut down, today those plants inject the reactive power and voltage support needed to keep the transmission capability operating at its capacity ratings – remove those plants and the transmission system has to be re-designed or de-rated (moving less power). Recycling the generation equipment at those central plants – no fuel would be used, just the existing generation machinery would remedy this reduction in capability significantly. The question is can the investment in operating this type of system – a synchronous condenser – fit into the current split ownership regulations in the state, where generation, transmission, and distribution have different owners and different rate cases, which are treated differently by the regulators and state laws. How this is resolved is a work in progress. But all the stakeholders have different objectives, so finding common ground will take real work and time.

One of the most technically challenging parts of transmission is to tightly link Michigan’s two peninsulas together. While they should also be able to operate independently, they should at least be able to operate in tandem. If Enbridge is permitted to build their proposed tunnel under the Straits of Mackinac, it should be sized to accommodate high voltage (500KV) transmission. Reducing the cost of both electricity and propane/ natural gas to the people of the UP and taking advantage of mine sites and generation that the upper peninsula offers the rest of the state, will increase earning potential for many of the upper peninsula’s residents.. 

Transmission and distribution is a foundation piece for Michigan for the future, and it needs to be done in a technically correct fashion, driven by engineers, and not politics both for transmission and for distribution.

Investment in Michigan’s future

With Ford, GM, FCA, and other automotive companies in the state, any investment in the electric grid and sustainable energy is an investment in jobs, and the state’s future. Every large company in the state should be encouraged to work on making their produces better, more efficient and powered by electricity. Investment in R&D is an investment in the people of the state of Michigan, and when supported by the universities, an investment in education for future needs.

The utility companies should be encouraged to invest in transmission and distribution infrastructure, and possibly even renewable generation and storage. They are the ones who will end up operating and maintaining these assets, so many they should own them. Co-ops, municipal utilities and even the IOU’s should have incentives to build for the future, and not to nickel and dime the upgrades.

A Michigan Choice

This is not an easy document to swallow whole, nor is it short and sweet, but it could be a lot longer if all the graphs, figures and numbers were added to it. It takes some liberty with the use of terms to keep concepts simple. Many topics are not covered, because if the ones here are well handled, the others will follow. I specifically did not mention MI GRID, a state initiative that is far to narrow and short sighted.

Michigan can either sit on the sidelines and let others develop the technology and manufacturing facilities, or they can choose to make a move to become the state where much of this work is done. They can choose to ignore the mismatch between renewables and traditional demand or take strategic advantage of the position Michigan is in and build pumped storage projects, helping manufacturing keep costs down and absorbing a lot more renewable generation. Michigan can build a sustainable eco-system or borrow someone else’s in 10 or 15 years.  Michigan has strategic advantages – the question is are the lawmakers and the regulators willing to use them, to work with stakeholders to make them happen.

If you don’t like the picture painted here, then don’t complain, create a different path. This is one of many and one that experience says will be hard, but manageable.

It will not take a huge amount of government funding from the state, a law change here, and a regulation change there. Lowering barriers and encouraging development. Working with stakeholders to make projects easier to do and encouraging forward thinking.

Small changes in how current money is handed out to Universities, and a common curriculum for community colleges in many of these areas, will speed the number of students, who are ready to dig in and help.

But Lansing has to make a decision, be on the leading edge and encourage or sit back and let others do the work. Jobs, communities, companies and the state’s future ride on what they decide to do.

Doug Houseman's picture

Thank Doug for the Post!

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Discussions

Matt Chester's picture
Matt Chester on Jan 16, 2020 11:09 pm GMT

Michigan has several appliance brands that have research and development in the state, providing some great jobs, mix in the state universities, a goal of moving the bar for energy star appliances, and more great jobs become available in the state. With the opportunity for low cost sustainable electricity, manufacturing jobs may flow back into the state as well

Interesting to hear you couple the economic benefits to the state of these types of manufacturing jobs with the benefits on a macro level of energy efficiency. Is there perhaps some sort of untapped synergy of people being more likely to buy more efficient products because they're manufactured domestically and creating a valuable efficiency cycle in that way?

Doug Houseman's picture
Doug Houseman on Jan 17, 2020 12:36 pm GMT

If you come to Michigan - you will find that Ford, GM and Crysler vehicles dominate the roads, because people who live here know the economy is tied to those brands. The same thing is true in offices where Steelcase is dominate in the state. Whirlpool is a very common appliance, because they are here. Appliance manufacturing used to be a big deal here, but most of it has moved off shore. Only R&D stayed behind. If the R&D were to create high value appliances, some might trickle back into the state. That will depend on the overall ecomomics of building them here. Drive the cost of energy down - and the major materials costs come down. Then work hard to train people to do the job and add the automation that the state is best at (even Tesla is raiding Michigan for automation engineers and technicians) and you have the abiliyt to see manufacturing come back. 

Matt Chester's picture
Matt Chester on Jan 17, 2020 4:25 pm GMT

That's really interesting-- and definitely goes to show how each locality/region/state needs to be approached differently. There are unique aspects that might work for Michigan that won't work for areas that are more made up of transient populations (which has been more typical of the places I've lived). Thanks for these insights, Doug. 

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