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Michigan could see billions in economic impact and tens of thousands of new jobs if its major utilities follow through on voluntary pledges to boost renewable energy, according to a new report released Thursday by a conservative energy group.
The Michigan Conservative Energy Forum report highlights the potential economic impact as utilities comply with a 15 percent renewable energy standard by 2021. It also projects the impact if Consumers Energy and DTE Energy reach 30 percent renewable by 2027, which is generally in line with the stated goals of the companies.
“It’s not an unrealistic target given the trajectory and rapid advances in renewables in Michigan,” said Jordan Pallitto, vice president of The Hill Group, which was commissioned to do the study.
The study models three renewable energy paths: 12.5 percent by 2019; 15 percent by 2021; and 30 percent by 2027. Building off a similar report from 2015, the latest projections include targets under 2016 energy laws and stated goals of utilities.
By the end of next year, the report estimates a total economic impact of $3.8 billion — which includes direct, indirect and induced benefits — and $1.4 billion in employee compensation. By 2027, the total economic impact could be $10.3 billion, the report says.
“Those are pretty big numbers,” Pallitto said.
The report comes as DTE and Consumers anticipate scaling up renewable development and cutting carbon emissions in the coming decades. In a long-term plan released this month, Consumers said it plans to develop more than 6 gigawatts of solar by 2040.
The economic benefits assumed the utilities will use in-state generation and do not account for the use of renewable energy credits (RECs), which utilities have used to meet current renewable requirements. The report also does not account for the environmental and health benefits of emission reductions.
The Hill Group used models developed by the National Renewable Energy Laboratory and IMPLAN to “estimate the regional impact of construction, operation, and maintenance activities” associated with renewable development by region.
Kevin Borgia, Midwest policy director for Cypress Creek Renewables, said the company plans to develop up to 2,600 megawatts of solar across Michigan. Using a slightly different methodology than The Hill Group, Borgia said Cypress Creek’s plans — if fully developed — represents a $3.3 billion investment supporting 4,700 construction and installation jobs.
“The jobs we’re going to need to build this would be a pretty significant workforce,” Borgia said.
The MCEF study refrains from advocating a particular policy for hitting a 30 percent by 2027 target. The group was opposed to a now-abandoned ballot measure that would have increased the RPS to 30 percent by 2030, instead favoring a market-based approach to renewable development, said MCEF executive director Ed Rivet.
“Unhindered market forces are going to pull us to 30 percent by 2027 faster than people anticipate,” Rivet said. “I’m not sure we need a mandate to do it.”
Pallitto added: “Regardless of the policies instituted, these numbers will hold up if we get to this level of activity.”