Your Questions Answered: Renewable Mandates

One of the questions several AMP members have asked as we’ve been tracking various legislative proposals in Lansing this year is: “Don’t we need mandates to ensure we keep increasing renewable energy in Michigan?”

Michigan’s leaders are already discussing the role of renewable energy mandates and how we can best continue to move toward greater use of renewables in Michigan. On Monday, President Obama and the EPA introduced a new EPA Clean Power Plan, which has magnified the focus on renewable energy in our nation’s—and our state’s—energy mix.

The new federal restrictions on carbon emissions make it even more urgent for Michigan’s legislature to enact a smart, comprehensive energy policy that allows us to chart our own course and ensures we don’t compromise reliability or affordability while we work to meet the new standards and address Michigan’s other energy challenges.

AMP will be taking a closer look at the new EPA regulations in the coming weeks; the final ruling on that front will further shape the discussion. Given the growing importance of renewables, we think it’s important for Michiganders to understand why mandates are not the only—or even the best—way to support the role of renewables in our energy supply.

A Brief History of Mandates

Years ago, when our elected officials first put in place Michigan’s 2008 energy law, sources such as wind and solar were expensive and hard to come by. The technology was still relatively new, and substantial investments had to be made in equipment and infrastructure to make them viable. Mandates helped create demand for these sources in their infancy as they got on their feet.

Over time, however, prices for renewable energy sources have dropped considerably; they are now able to compete with traditional energy sources. However, the mandates that once helped control prices are now creating an artificial market for renewables that is unsustainable.

Allowing renewables to compete without mandates will actually ensure that these technologies continue to improve in efficiency, reliability, and affordability. Given the need to ensure renewable energy sources are a sustainable part of Michigan’s energy mix over the long term without putting reliability or affordability at risk, legislators are now looking to Integrated Resource Plans (IRPs) as a better approach than simple mandates.

The Advantage of Integrated Resource Plans

Representative Nesbitt, Senator Nofs, and Senator Proos have proposed legislation that would include IRPs, which give the state greater flexibility in how Michigan meets its energy needs.  IRPs represent a comprehensive approach to energy planning that establishes a level playing field for all energy resources, allowing renewables to be incorporated in smart ways.

Nine coal-powered plants are closing next year, adding to our looming capacity shortfall. That, in combination with the new EPA rules, underscores the need for Michigan to have one centralized, comprehensive planning process that allows us to address short-term capacity needs, as well as the longer-term move toward a balanced mix of energy sources. IRPs will allow Michigan to:

Moving forward, the key to ensuring Michigan is able to tap into the vast array of energy resources available today will be an energy policy that moves away from mandates that favor one specific type of energy. Michigan’s leaders should adopt a holistic, integrated resource planning approach that allows us to use the energy sources that make the most sense for Michigan’s complex needs.

What are your thoughts or questions about Integrated Resource Plans?  Let us know today.