LANSING – Michigan is well-positioned to meet its Clean Power Plan standards – In fact, World Resources Institute finds that Michigan can use existing energy policies to get 98 percent of the way to meeting the state’s target under the CPP, and with smarter, more efficient use of natural gas and coal plants the state could go twice as far as its required reductions.
This fact sheet from the World Resources Institute examines how Michigan can use its existing policies and infrastructure to meet its emission standards under the CPP while minimizing compliance costs, ensuring reliability, and harnessing economic opportunities.
- Energy efficiency resource standard: Requires annual electricity savings of 1 percent of the previous year’s sales from 2012 forward.
- Renewable energy standard: Requires 10 percent of sales to come from renewable sources by 2015, and the same amount of credits to be maintained going forward.
- Increasing the use of existing natural gas plants. Combined cycle plants generated less than one-fourth of the electricity they were capable of producing in 2012. Running existing plants at 75 percent could cut emissions further.
- Increasing coal plant efficiency. Low- and no-cost operational improvements and best practices at existing coal plants could cut emissions further.
- Michigan has the opportunity to go even further by expanding its successful clean energy policies. Michigan could nearly double its required reductions by increasing the renewable standard to 20 percent of sales by 2022 and the efficiency standard to 2 percent of sales beginning in 2019, as well as implementing the infrastructure opportunities above.
Michigan can develop an implementation plan that maximizes the economic benefits to the state and achieves emission reductions cost-effectively by:
- Adopting a market-based carbon pricing program, which encourages cost-effective emission cuts and generates revenue that can be used for public investments or reducing taxes. The CPP encourages states to trade credits without formally joining a trading program. Assuming a $10 per short ton price of interstate emissions allowances, Michigan could generate an average of over $160 million per year in revenue between 2022 and 2030 from out-of-state sources if it surpasses its CPP target by expanding its clean energy policies and using infrastructure opportunities as described above.
- Investing in energy efficiency. Efficiency is one of the most cost-effective tools for Michigan to cut its emissions while saving money for residents. Every dollar invested in the state’s current efficiency programs returns an estimated $4 to $5 in savings to electricity customers.
Michigan is in a strong position to comply with the Clean Power Plan while taking advantage of economic opportunities and maintaining grid reliability. Michigan’s clean energy policies are already cutting CO2emissions and other harmful air pollution while saving money for the state’s residents. Michigan can meet its mass-based standard by continuing to implement these policies and making better use of existing infrastructure. Repealing or weakening these policies, as has recently been proposed, could make meeting the standards more difficult and expensive. But by expanding these policies, Michigan can scale up their benefits and achieve deeper reductions more cost-effectively.
Read about additional analyses in WRI’s fact sheet series, How States Can Meet Their Clean Power Plan Targets.
This study was done by by Rebecca Gasper, Kristin Meek and Noah Kaufman
