Beacon of sunlight

Why BWL’s solar energy project is a big deal for Michigan

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The Lansing Board of Water & Light is poised to be a statewide leader as Michigan starts a new chapter of renewable-energy development.

When a utility official confirmed last month that the BWL has chosen a developer to build a 20-megawatt solar energy project in its service territory, it announced what would easily be the largest solar project in Michigan.

But experts say the project also signals a new phase for the fledgling solar industry here, which till now has been perceived as too expensive to develop on a utility scale.

The shift in economics comes as state lawmakers and Gov. Rick Snyder focus attention on a new comprehensive energy policy for Michigan. That policy — driven in part by tightened federal regulations on coal-fired power plants — will likely depend on more renewable energy.

“This project is very exciting because it’s the biggest planned project for our state and it shows that there is a utility really getting behind solar,” said Julie Baldwin, renewable energy manager for the Michigan Public Service Commission. “This BWL project could almost double (the amount of solar in Michigan) at a price that almost nobody ever thought we’d see this low.”

Officials are still evaluating potential sites and are finalizing details of a powerpurchase agreement between the BWL and groSolar, a Vermont-based developer that has built solar projects around the country.

Bob Trezise, president and CEO of the Lansing Economic Area Partnership, said the project is moving fast, though, in order to qualify for federal renewable energy tax credits.

“One of the reasons we’re excited is that a publicly owned utility has the potential to really be setting the pace at a time when we’re seeing the investor-owned utilities pretty much undermine efforts to expand renewable energy in Michigan,” said Anne Woiwode, conservation director of the Sierra Club’s Michigan chapter.

According to a recent report by the Michigan Public Service Commission, only about 23 megawatts of solar is generated statewide, which is still about 1 percent of all renewable energy here. The largest solar projects operating or under development in Michigan are less than 1.5 megawatts.

“We got a whole lot of bids, there was a lot of interest,” said George Stojic, the BWL’s executive director of planning and development. “It just made sense to scale this thing up” from the original 5 megawatts.

Beyond just the size of the project, though, comes a signal to renewable energy developers and investors that utilityscale solar has potential in Michigan. As the state’s renewable energy portfolio has grown to nearly 10 percent as mandated under PA 295 of 2008, solar has been criticized here for being too expensive, which explains why it lags behind renewables like wind, hydroelectric and biomass.

Stojic said the potential price for the project will be around $60 per megawatthour, which could vary depending on the ultimate location. That’s slightly more than the most recent power-purchase agreement for a wind project in Huron County, and below the estimated $70 per megawatt-hour for a new natural-gas plant, said Baldwin, of the MPSC.

The cost is “wonderful news,” Baldwin said of the BWL project. “I think it shows that solar can have a really important place in Michigan electric providers’ supply portfolio. I think we’re going to see more projects on this scale.”

Local impacts

The project also stands to benefit the Lansing region not just for being a leader, but by also redeveloping vacant land with a sector facilitating advanced manufacturing growth.

Steve Remen, executive vice president of business development, said a project of this scope could require slightly more than 100 acres at one or over multiple sites.

Several properties are still being evaluated, but one under consideration is the former GM Verlinden plant site west of downtown, Stojic confirmed. Owned by RACER Trust, the 57-acre property has been a vacant industrial zone since the plant was demolished in 2006. RACER Trust was formed during GM’s bankruptcy proceedings to clean up, market and sell former GM factory sites.

“Oftentimes, those sites make very good sites for solar projects,” Remen said, referring to vacant industrial parcels that likely have legacy contamination. “It’s an excellent re-use of the property.”

Patricia Spitzley, deputy redevelopment manager for RACER Trust, could not comment on negotiations. Trezise said there are “more than a half dozen other possibilities,” in addition to the RACER property.

Finally, the project is welcome news to environmentalists, who have recently taken the BWL to task over air pollution from its coal-fired Eckert plant.

Earlier this month, the Michigan chapter of the Sierra Club announced its intention to sue the BWL over emissions that are allegedly linked to health problems near the plant like high asthma hospitalizations.

“Being able to have a utility think about how to use solar effectively in Michigan will be a really good, groundbreaking effort,” said Woiwode, of the Sierra Club. “It’s not the total answer, though. The LBWL really needs to figure out how it’s going to engage its owners and ratepayers in discussion about what future generations should be.”

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