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Natural Gas? Wind? Solar? New Tool Helps Michigan Choose Best Energy Options

PHOTO: The future price of natural gas is one of the factors states need to take into account in determining the most cost-effective way to meet the EPA's new carbon rules. Photo credit: Charlie Wrenn/Morguefile.
PHOTO: The future price of natural gas is one of the factors states need to take into account in determining the most cost-effective way to meet the EPA's new carbon rules. Photo credit: Charlie Wrenn/Morguefile.
March 24, 2015

LANSING, Mich. - It's not a crystal ball, but a group of researchers say a new tool can help Michigan and other states grapple with predicting and planning for the most cost-effective and least risky ways to cut back on coal.

Douglas Jester with the consulting group Five Lakes Energy says in order to meet the requirements of the Clean Power Plan, states will either need to increase their use of natural gas, or rely on renewable energy sources like wind and solar.

But given fluctuating prices and rapidly changing technology, figuring out which way to go can be a bit of a gamble.

"Whichever path we choose, we're placing a bet on future prices, particularly of natural gas," says Jester.

Researchers at the University of Michigan's Energy Institute, along with Jester and his team, developed a model to help states take into account every factor in determining the best plan for utilities and ratepayers. Using that tool, Jester calculates the state could retire far more coal-fired power plants and reduce air pollution by replacing coal with natural gas, as opposed to renewable sources - provided natural gas prices stay low.

Jester says the issue is further complicated by the fact the decisions states will make won't happen in a vacuum, as the price of fuel, and to some extent, technology, will depend on demand.

"If a lot of states follow the path of converting from coal to natural gas, that will significantly increase the consumption of natural gas, and raise the price of natural gas," he says.

The Clean Power Plan calls for states to reduce power plant carbon emissions by 30 percent from 2005 levels by 2030.

In a recent address, Governor Rick Snyder said he'd like to have between 30 and 40 percent of Michigan's energy needs met by a combination of renewable energy and reducing energy waste through energy-efficiency efforts over the next 10 years.

Mona Shand, Public News Service - MI