Consumers Energy will be looking for 5 GW of solar energy by 2030 as part of the Clean Energy Plan.

Michigan utilities Consumers Energy has filed a clean energy plan with the regulators, including plans to add 5 gigawatts of solar power through competitive bidding to the competition. by 2030, as part of its goal of reducing carbon emissions by 90% and phasing out its coal-fired plants. power from here 2040.

And, unlike its first solar proposal last year, Consumers has introduced a 50/50 split between the utility and third party funding of its new solar target – a move that has been supported by environmental groups, consumer advocates and the state attorney general's office.

The settlement plan tabled this Monday with the Michigan Public Service Commission (MPSC) is the result of close to a year of negotiations with these parties regarding Consumers' efforts to merge two key political efforts. The first is developing its first-ever Integrated Resource Plan (IRP), as required by a 2016 law. The plan will guide the utility's energy supply over the coming decades. Consumers filed their initial plan in June 2018 (PDF), followed by the settlement plan released this week.

The second imperative is the decision of consumers to engage more aggressively than the state has so far imposed to phase out coal production and develop its renewable energy portfolio. Michigan law requires that renewable energies account for 15% of an electricity supplier's resource portfolio by 2021, which is low by the standards of the state's renewable energy portfolio.

But last year, Consumers and DTE Energy, another Michigan electricity supplier, agreed to commit to a "50% clean energy" goal of here. 2030 – a plan that includes both significant improvements in energy efficiency to reduce consumption and a commitment of 25% of consumers. their electricity will come from renewable sources by 2030.

A compromise 50-50

Consumers, who serve about 6.7 million electricity and gas consumers in Michigan, have adopted the name "Clean Energy Plan" (PIT) to highlight this change, said Katie Carey, head of media relations of the company, in an interview Monday. MPSC is reviewing the proposal and has not yet set a timetable for future decisions, she said.

Most plans submitted on Monday are identical to those consumers submitted last year, she added. This includes its commitment to reduce carbon emissions by more than 90% and completely eliminate electricity from coal by 2040, as well as its target of 5,000 megawatts of new solar energy by 2030 and 1,000 additional megawatts by 2040.

The most important change is the shift from a purely utility-based power supply structure to a uniformly distributed structure between consumers and third parties, Carey said. This type of 50-50 compromise has been the hallmark of investment projects in utility solar energy, starting with some of California's flagship programs.

In simple terms, utilities often initially offer to finance all of the renewable energy they seek, citing the low cost of their capital and, therefore, lower costs for taxpayers compared to energy providers. solar third. Of course, utilities are often encouraged to hold capital investments because they benefit from a guaranteed rate of return.

Solar industry stakeholders, for their part, pointed out that utilities should not be allowed to use their monopoly to prevent third parties from competing for some of these new projects – and potentially solar energy at a lower price than they could get. These arguments have gained favor with utility regulators and have become a key negotiating point for Consumers parties. (They have also played in utility plans to hold other forms of distributed energy resources, such as electric vehicle charging infrastructure, as shown by the new Consumers approved electric vehicle consumption pilot project. January.)

"I think it's safe to say there were worries about bidding," Carey said. With regard to 100% ownership of utilities, "we appreciated the affordability model it would offer to our customers," with consumers believing that the costs that customers incur to pay for solar RFPs would remain well in the future. below the rate of inflation.

But the shift to equal sharing between the utility and third parties has allowed groups opposed to the original plan, including environmental groups such as the Sierra Club and the Natural Resources Defense Council, and the Attorney General of the United States. State, to subscribe to the new plan. , she says.

Environmental pressure and market realities

Consumer PIR was filed last year after a state law pbaded in 2016 imposed for the first time these long-term plans for the two state-owned utilities. The utility company filed its first IRP in June 2018, claiming that it "would radically change the way the company buys capacity."

Consumers' clean energy objectives, on the other hand, were taken into account independently of any government mandate, even though they were not independent of political pressures. Consumers and DTE made clean energy commitments last year in exchange for the promise of a group backed by California environmental billionaire Tom Steyer to withdraw the election initiative that would have set a 30 percent renewable energies to 2030.

But Consumers is also looking to modernize its production mix in light of market realities, Carey said. The utility has shut down seven of its 12 coal plants in the last two years and, according to its plan, will eliminate two more in 2023, two more in 2032 and the last in 2040. At the same time, it plans to 39, add about 550 megawatts of wind capacity by 2021, and began to test battery storage systems, in order to incorporate energy storage at its range of resources in the coming years.

While Michigan occupies a relatively small share of its solar energy share compared to other states, it is one of four Midwestern states positioned for rapid solar growth over the next five years, according to Solar Energy Industries Association. The others are Illinois, Wisconsin and Ohio.