Jun 9 2009
A Consumers Energy analysis of electric generation needs and alternatives concludes that a balanced portfolio of diverse energy resources will be needed to meet the future power demands of the utility's 1.8 million electric customers.
These resources include comprehensive energy efficiency programs, demand side management (reducing customer usage during peak periods), more than 900 megawatts of renewable energy capacity, and a new 830-megawatt clean coal unit at the company's Karn/Weadock Generating Complex near Bay City.
Consumers Energy conducted the analysis in response to a request from the Michigan Department of Environmental Quality (MDEQ), as part of the environmental permit process for the new clean coal plant, announced in 2007. The utility filed its "Balanced Energy Initiative: Electric Generation Alternatives Analysis" today with the MDEQ and the Michigan Public Service Commission (MPSC).
"Even using historically low customer demand growth assumptions, it's clear that we'll need to move forward aggressively on energy efficiency, renewable energy expansion, and a new clean coal plant to serve customers with reliable, competitively priced electricity in the future," said John Russell, Consumers Energy's president and chief operating officer.
The utility analysis concludes that two-thirds of the projected energy resources needed through 2018 will be provided by new renewable energy sources plus peak load reductions from new energy efficiency and demand side management programs. Consumers Energy received approval last week from the MPSC to move forward with new energy efficiency and renewable energy plans to meet the requirements of the state's new comprehensive energy law.
The analysis also concludes that for the remaining projected energy resources needed between now and 2018, a new clean coal unit represents the most cost effective, efficient and reliable power resource to serve customers compared to other alternatives.
Consumers Energy expects that its new clean coal unit at Karn/Weadock will begin commercial operation in 2017. An economic analysis shows the project will have a net economic impact on Michigan of $1.2 billion, create 1,800 construction jobs at peak, about 2,500 indirect jobs, and more than 100 permanent jobs after the plant is operating.
The utility has the oldest fleet of coal plants in the nation. Those units have an average age of 50 years.
The analysis also points to a key environmental benefit of the new clean coal unit: "Eventually replacing several of the company's older, less efficient plants with an advanced supercritical pulverized coal plant will significantly reduce the company's system-wide emissions and have a positive impact on the air quality in Michigan."
The analysis explains how the Balanced Energy Initiative approach could provide the following emissions reductions by 2018 from the company's coal fleet from today's levels: sulfur dioxide, down 91 percent; nitrogen oxides, down 83 percent, and mercury, down 81 percent. In addition, the Balanced Energy Initiative portfolio could reduce carbon dioxide emissions from the utility's coal fleet by 10 percent to 15 percent, before further potential reductions can be gained through carbon capture and sequestration.
The Balanced Energy Initiative is a key part of Consumers Energy's Growing Forward strategy, which calls for investing more than $6 billion in the utility over the next five years. That includes significant investments in energy efficiency, renewable energy, environmental and customer service enhancements, and new power generation.
The substantial investments make Consumers Energy one of the largest - if not the largest - investor in the state of Michigan. Those investments will help the utility maintain and improve service to customers, create jobs, boost the state's economy, and expand the state's tax base.
Consumers Energy, the principal subsidiary of CMS Energy (NYSE: CMS), provides natural gas and electricity to nearly 6.5 million of Michigan's 10 million residents in all 68 Lower Peninsula counties.