Consumers Energy

Ludington Pumped Storage

Is a Michigan hydro pumped storage facility clean and renewable? Lawmakers, experts disagree

The Ludington Pumped Storage hydroelectric facility in western Michigan is a clean and renewable energy source that should receive credits for its ability to reduce carbon emissions, according to various state and federal lawmakers.

But amid comprehensive energy policy proposals at the federal and state levels, debate swirls over whether the operation along Lake Michigan is actually clean or renewable.

While both sides agree that the electricity generated from the 842-acre reservoir is carbon free, experts say the process of pumping the water from the lake in order to generate electricity is not.

According to the utility that operates the project, nearly 75 percent of the energy used to pump the water comes from coal and natural gas. Twenty-three percent is powered by nuclear and wind, a spokesman from Consumers Energy said.

“CO2 is emitted when the fossil fuels are burned, regardless of whether the energy is stored or not,” said Mark Barteau, director of the University of Michigan Energy Institute. “When the stored energy is consumed, no further emissions occur, although since storage and utilization are not 100 percent efficient, the carbon emissions per megawatt-hour delivered are actually larger than if the energy were used directly rather than stored.”

Construction on the Ludington Pumped Storage Facility started in 1969. It is on the shoreline of Lake Michigan, just south of the small city of Ludington. It is co-owned by Consumers and DTE Energy and operated by Consumers.

The facility’s generating capacity is 1,872 MW, enough to power a city of 1.4 million people, according to Consumers. Water from Lake Michigan is pumped uphill during low-demand periods and stored in the reservoir equivalent in size to two million backyard swimming pools. During high-demand periods, the water is released back downhill, powering turbines and generating electricity.

The facility is widely regarded as an important system for saving ratepayers money. The disagreement surfaces over how it will impact the state’s emission-reduction goals.

“We can’t eliminate the CO2 emissions from our coal plants by storing the energy, whether by pumped hydro or other means, and using it later. What matters is how the energy gets generated in the first place,” Barteau said.

However, a broad energy package proposed last month by state Senate Republicans would define the facility as an “advanced cleaner energy system.” That bill, SB 438, strikes all references of “renewable” energy from PA 295, Michigan’s renewable portfolio standard law from 2008. PA 295 excluded hydroelectric pumped storage facilities from qualifying as renewable.

However, should renewable credits be instituted as part of Michigan’s way to implement the Clean Power Plan, SB 438 considers the Ludington facility renewable as well, said Greg Moore, legislative director for state Sen. Mike Nofs, the Republican chairman of the Senate Energy and Technology Committee.

“Ludington would be counted as renewable and under the definition of clean energy, but it’s renewable only to the extent that utilities will be required to do credits,” Moore said.

It is unclear how the Senate’s definition for clean-energy facilities would be credited under the Clean Power Plan, Moore said. He added that the Michigan Agency for Energy is still studying it.

“It should definitely count under the clean-energy definition,” Moore added. “It’s like a battery. Later on, we’ll be able to use wind and solar to power it. Over time, we see it becoming more efficient.”

Meanwhile, lawmakers in Washington want to make sure the facility is credited in complying with the Clean Power Plan.

In June, Michigan congressmen Bill Huizenga and Dan Kildee — a Republican and Democrat, respectively — sponsored an amendment to the federal Ratepayer Protection Act encouraging the U.S. EPA to count the Ludington facility toward the state’s emission-reduction goals under the Clean Power Plan.

They say the federal plan penalizes the facility, counting only the emissions as part of the pumping process and not crediting the emissions saved while the hydro facility generates power.

“We’re trying to make sure that as these rules are coming up, that they’re smart and that they actually are workable,” Huizenga said on a recent taping of a public-access TV show. “An example of what happened up in Ludington — it’s crazy — is the EPA was going to say, ‘We’re going to give you this portfolio and a target you have to hit. We’re going to count against you the power that it takes to pump all of the water up into the reservoir in Ludington.’”

He said that with the storage process in Ludington, “The federal government was going to penalize all the energy and count that toward the usage of getting it up there, but not put any in the plus ledger of the energy that was being created, which was essentially free at that point.”

However, Barteau compared the Ludington project to a Roth IRA.

“You pay taxes on the dollars you put in,” he said. “When you withdraw it upon retirement later, you don’t pay taxes. But you don’t get the taxes back that you paid originally.

“Carbon emissions are analogous to the tax in this example. Rep. Huizenga’s proposal is essentially analogous to a scheme in which you would get a tax credit when you finally used the money you had ‘stored.’”

Douglas Jester, a principal at the Lansing-based company 5 Lakes Energy, agrees with Barteau.

Jester said the hydroelectric facility loses energy between the pumping then generating stages, “which means you have to produce more in the first place than is ultimately used by customers.”

Under the Clean Power Plan, “The net carbon generation from operating Ludington would count against the state of Michigan, if you will,” Jester said.

As for emissions — using pumping and storing patterns from 2013 — Jester said pumping into the facility produced 3.477 million tons of carbon dioxide while generating from the facility avoided 2.506 million tons of carbon dioxide, creating a net of .971 million tons of carbon dioxide emitted.

“Since Ludington supplied about 2.537 million MWh of power when generating, the carbon intensity of that power was 3.477/2.537=1.37 tons of carbon dioxide per MWh,” Jester wrote in an email. “This is not carbon-free.”

Consumers Energy spokesman Dan Bishop countered that,  “The relationship between avoided tons and produced tons is not the complete story.”

The facility operates at a cycle efficiency of 72 percent, meaning that it takes more energy to pump water for the process than what is actually produced — what Consumers calls an “efficiency hurdle” — and produces more CO2 emissions than are avoided.

The utility says it is an “environmentally progressive” facility because pumping occurs during highest production hours from a nearby wind farm and, “When producing power, Ludington displaces generation from power plants having relatively poor efficiency and thus higher emissions.”

And further down the road, state lawmakers expect the pumping operations to be powered by a greater proportion of renewables.

Despite the disagreement over how to define the facility, Jester said it still has benefits, particularly producing net cost savings for utility customers.

“Even though you’re losing some power round trip, the cost of the power used to generate it is much less than the power you’d have to produce at the time that it generates,” Jester said. “There are very real economic benefits to the utilities and therefore their customers.”

Earlier this year, Barteau told Midwest Energy News that it is a “complete fiction” for Senate Republicans to call the Ludington facility renewable.

“Frankly, it would be a way to green-wash power generated from coal,” he said. “That’s just a goodie in there for those utilities that already have that capacity.”

“Solar or wind plus pumped hydro storage is carbon-free,” he continued. “Coal plus storage still has the carbon emissions impact of burning the coal, period. No legislative accounting scheme can change that reality.”

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