LANSING — Renewable wind energy is now cheaper than electricity from coal, according to the Michigan Public Service Commission’s fifth annual report on the state’s renewable energy standard and its cost effectiveness.
The report shows the weighted average price of existing renewable energy contracts is $76.55 per megawatt-hour, which the report noted was “significantly lower than the cost of coal-fired generation plants.”
And the cost of renewables is continuing to fall. The report says that the most recent contracts approved by the MPSC for new wind capacity have levelized costs in the low $50s per megawatt-hour range, about 10 percent less than the cheapest levelized contract prices from 2011, and 50 percent of the levelized cost of the first few renewable energy contracts approved in 2009 and 2010.
Public Act 295 of 2008 requires that MIchigan utilities hit 10 percent renewable power by 2015. The annual report required by the law shows that for 2014, renewables were expected to generate 8.1 percent of the state’s electric needs. That’s up from 7.8 percent in 2013 and 5.4 percent in 2012.
The law has spurred massive investment in renewable power in Michigan — some $2.9 billion has been invested to bring approximately 1,450 megawatts of new renewable energy projects online through 2014 statewide.
Other highlights of the report include:
• Michigan’s electric providers are on track to meet the 10 percent renewable energy requirement.
• At the end of 2013, both Consumers Energy and DTE Electric obtained MPSC approval of power purchase agreements and company-owned renewable energy projects that provide the necessary capacity to exceed the 2015 legislative capacity requirements.
• In July 2014, Consumers Energy reduced its renewable energy surcharge to zero for all customers. In January 2014, DTE Electric company implemented a surcharge reduction, which lowered the residential surcharge from $3 per meter per month to 43 cents.
• At the end of 2014, there were over 1,500 MW of utility-scale wind projects in operation in Michigan. (This includes 127 MW of utility-scale projects that began operating prior to approval of Public Act 295.)
• During 2014, five utility-scale wind farms went online in Michigan.
• The growth of wind in Michigan’s REC portfolio has been significant, increasing from 24 percent in 2012 to 44 percent in 2014.
• On a combined basis (renewable energy and energy optimization), the cost of $37 per MWh is less than any new generation, including new natural gas combined cycle plants, when compared to the Energy Information Administration levelized plant costs for 2014.