Opinions Tom's Take Coal’s shrinkage in Michigan’s energy mix
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Tom’s Take
A lot of people in our state are talking about the future of coal. You might say it’s become a burning issue.
If and when carbon is capped, taxed, or traded, much of the cost burden of it will fall directly on electric utilities and their customers – both businesses and individuals. How bad will it be? That will depend in part on strategic decisions being made about our energy mix right now.
Some say that coal is going to be our primary electricity-producing resource for the foreseeable future. They say it’s cheap and plentiful, and can be made clean and harmless. Most important, it’s a reliable power source – as long as you have enough power plants, you can count on the electricity to be there when you want it.
Others say that we can and must eliminate coal as an energy source. It’s inefficient and filthy, kills people, flattens mountaintops, pollutes our air and water, speeds global warming, and costs too much.
Attorney General Mike Cox is fired up about “clean coal,” and seems to want to run for governor on the issue. Governor Granholm’s view of coal, by contrast, is that it must prove itself as a clean 21st century fuel before we invest in it further. It bears repeating that clean coal is a substance that does not exist except in theory. Still, there are lots of things that are going to exist in the future that exist only in theory today.
But coal, dirty or clean, is probably destined to play no more than a supporting role in Michigan’s future cast of energy characters.
Here’s why: Coal-fired electricity provides about 60 percent of our state’s total electrical power, followed by nuclear power (25 percent), natural gas (10 percent), hydroelectric (1.4 percent), and other renewables (wind, solar, biomass, geothermal, biofuels, etc.) at 1-3 percent. A couple of years ago, we were in a panic, foreseeing the need to add new electrical capacity at breakneck speed; but today, between the recession, Michigan’s declining population, and other factors not anticipated at the time, the demand curve has flattened out. Since it takes more than ten years to build a new coal-fired power plant, we are unlikely to see major additions to the coal-burning power column before the year 2025.
The question is, to what degree might coal be replaced by other power sources in that span of time?
Michigan and 25 other states have committed themselves to binding renewable portfolio standards. Michigan has committed itself to generate 10 percent of its electricity from renewable power sources by 2015 – only six years from now. Achieving that goal means achieving a two or three-fold increase in energy from renewables in six years. Realistic?
The fact is Michigan has every opportunity to do at least that well. The 10 percent by 2015 goal may sound like a stretch, but in fact, the Michigan RPS is a 98-pound weakling in a nation of budding Schwarzeneggers. Among all the states, New York is the leader in its aspirations for renewable power, with an RPS of 25 pecent by 2013. California is second, with plans for 20 percent renewables by 2017. Texas, relying on a wattage-based objective, is the nation’s windpower leader, with Iowa bringing up second place, while New Mexico expects to reach 10 percent in 2011; Nevada’s goal is 15 percent by 2013.
The US Solar Photovoltaic Roadmap has set itself an industry goal of 10 percent American solar power by 2030. We are not the sunniest state in the union, but we are not the darkest, either. Michigan’s solar enthusiasts are confident of raising the current solar budget, though by how much is anybody’s guess. The latest Michigan-bred solar systems do not require direct sunlight in order to function. Cloudy days will work.
The outlook for wind power is even better. Michigan has plenty of wind. Michigan, on a geographic basis, is not so different from Denmark, a modern industrial economy that already gets 20 percent of its energy budget from wind power.
Can we equal them?
The real question is, if we can’t, why on earth not?
Theoretically, the increased use of renewables, by itself, can take a respectable fifteen or twenty points off of that 60 percent coal budget by 2030, just using technology that already exists. Not bad.
But there’s more, something we haven’t even mentioned yet: an efficiency dividend.
When people talk about energy efficiency nowadays, they are not talking about putting on a sweater or freezing by candlelight, but about continuing our current lifestyle at a lower overall energy cost – much lower. A recent study by the McKinsey Global Institute predicted “spectacular results” from any concerted effort to improve U.S. energy efficiency. Many observers say we are on the verge of an efficiency revolution, using existing technology alone, that can cut our energy use by 30 percent if only we are willing to make the national investment in infrastructure that it would require.
Too optimistic? Then let’s suppose that we do only half that well.
Even at 15 percent efficiency-based reductions, we have depressed the coal budget down into the 25- to 30-percent range by making what I think are some fairly moderate assumptions.
Of course, we hope to do better than I have described. It’s my guess that we will get an assist from future increases in the percent of natural gas used here and that we can eventually increase our reliance on geothermal, biomass, and other renewable sources too.
This level of progress, by the way, assumes no increase in nuclear power at all.
Coal’s vaunted affordability is largely an artifact of its cost externalizations: CO2 pollution, mountain-removal mining, mercury pollution, watercourse pollution, ozone pollution, bursting slag ponds, waste heat – all of them are real costs that somebody pays.
Taking the externalized costs into consideration, the cost trajectory for fossil fuels is clearly upward, while renewable power, by contrast, will only benefit from future economies of scale.
Michigan’s relationship with coal is about as love-hate as you can get. Michigan produces none of its own coal. So, picture trainloads of coal coming into the state every single day, and trainloads of money going out.
What I am afraid of is that we will pursue a clean coal mirage for the next fifteen years, but that it will turn out to be too expensive, leaving much of our coal-burning capacity stranded by 2025 – just as new capacity is coming on line. That’s not a good scenario.
Left to itself, I think coal is destined for the slag heap in more ways than one. But it still has powerful friends, and it can still change the fate of Michigan for the worse.
Tom Leonard is a past executive director of the West Michigan Environmental Action Council, where he helped launch the West Michigan Sustainable Business Forum. He’s now a writer and independent consultant in the Grand Rapids area.