IICC’s response to MI’s Draft Report on Renewable Energy.
Substantial issues are noted.
I have endeavored to support the statements in this report with independent academic documents rather than documents prepared by advocacy groups.
In brief:
- Achieving 30% renewable energy in MI is, by most meaningful measures, an impossibility and fails the most basic cost/benefit analysis. Just the installed cost of the wind turbines would be $28 billion, enough to replace virtually every coal plant in MISO with CC Gas Turbines.
- MISO is over-calculating wind energy’s capacity value. It is not 13.7% but only 2.7% according to their independent market monitor, Potomac Economics. Further, MISO’s reserve margin is not 28% but may only be 6.7% on peak days, half of MISO’s RM target. This is a sharp limit to adding more intermittent generation.
- The State’s draft report fails to come to a firm conclusion about a matter that is settled in the academic literature: one may not directly compare the LCOE of intermittent generators like wind to dispatchable generators like gas, coal, biomass and nuclear. This false choice must be abandoned.
- PA295’s instate mandate is a violation of the dormant Commerce Clause of the United States constitution and must be struck from the Act.
- We present evidence that MI’s wind Power Purchase Agreements may be a violation of the Supremacy Clause of the United States Constitution: “Any state action to order or approve a contract price for renewable power purchases above the “avoided cost” price is “void ab intio”.”
- IICC heartily concurs with the reports statements that industrial wind facilities are making people ill. We endorse a noise limit for wind turbines of 35dBa and a setback of 2km.
- We demonstrate that adding wind to MI gas generation (which is in fact how they are operating) reduces CO2 emissions at a cost that is 10x that of replacing coal generation with CC Gas Turbines on a per-unit-avoided basis. CC Gas Turbines would also eliminate Hg and PM2.5 emissions.
- We offer evidence that nationwide the GHG reductions from federal wind energy incentives are trivial (0.3%) and that far cheaper means exist to reduce emissions.
- We demonstrate the MI’s long term wind PPA’s are currently compelling MI ratepayers to absorb a $112 million/year premium for wind energy when compared to average wholesale value of energy and far more when compared to the value of that energy when time of delivery is included.
- We offer evidence from multiple sources demonstrating that at high penetrations of renewable energy, market signals are no longer adequate to guarantee adequate capacity. Left uncorrected, capacity payments to necessary fossil generators will be required to guarantee supply.
Complete response:
IICC response to MPSC RE draft report
-Kevon Martis