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Rebuilding boom coming at Michigan power plants

John Gallagher
  • Michigan power plants likely to see rebuilding boom soon
  • Coal will give way to natural gas & wind
  • Recycling may produce more jobs, too

Efforts to battle global warming and climate change by limiting carbon dioxide emissions are likely to produce a massive building boom at Michigan power plants in years to come, potentially creating thousands of jobs.

The U.S. Environmental Protection Agency is refining its proposed clean air regulations that would require states to dramatically lower output of greenhouse gases over the next 15 years. For Michigan, the targeted reduction is 31% over 2012 levels.

Gerard Anderson, CEO of DTE Energy, estimated the emissions regulation will lead to the retirement of half or more of the coal-fired generation in Michigan. That capacity will be replaced with natural gas and wind power, both requiring big new investment in facilities. For the state as a whole across several power companies, including DTE, Anderson estimated $15 billion would be spent on new facilities.

“I would say that the electric sector is headed for the biggest transformation it’s seen in 40 years, starting soon,” Anderson told the Free Press. “This is the most important and most sweeping environmental regulation ever issued in our sector by a pretty wide margin, and perhaps the most important environmental regulation ever issued.”

The rebuilding of Michigan’s power generating capacity could become the most visible part of the state’s energy economy in the next 10 to 20 years. Industry experts agree that growing the cluster of industries that comprise the energy sector depends on a mix of public policy, entrepreneurial energy and general economic direction.

The change promises a wave of new construction jobs as power utilities across the state invest in new power plants and clean air technologies. And depending on how state government works to boost alternative energy with incentives, Michigan’s renewable energy industry also could explode with new jobs and investment.

“It absolutely will be a really large construction project involving thousands of jobs,” Anderson said. “We ought to be able to provide good high-quality construction jobs over a long period of time with Michigan companies if we do this right. That’s absolutely a goal of ours as we go through this.”

Anderson and other utility executives say they’re not opposed to the EPA regulations, but they think the initial schedule for implementation is too aggressive and they’ve urged the EPA to give more time to adjust their mix of sources for energy production to meet the 31% reduction.

Soren Anderson, a professor of economics at Michigan State University who follows energy matters closely, sees potential for new growth if the EPA regulation is applied strictly. But he notes that Michigan and its power companies have many ways to reduce CO₂emissions:

Improving efficiency at existing coal and natural gas power plants.

Upgrading aging nuclear power plants to keep them operating longer.

Using natural gas generators for main power generation rather than for peak loads while moving coal plants down, and expanding production from renewable sources.

Some industry experts and entrepreneurs hope Michigan can build major new efforts in wind and solar energy, recycling and in other areas.

“This will depend on the stringency of the EPA’s final rule, how Michigan decides to implement this rule and the extent to which investments in renewables are more attractive than other compliance options,” Anderson told the Free Press. “I don’t see a ‘boom’ but rather a gradual, measured increase in renewable generation that matches the gradually tightening standards on CO₂emissions.”

Contact John Gallagher: 313-222-5173 or gallagher@freepress.com. Follow him on Twitter @jgallagherfreep.

Michigan energy industry by the numbers

83,600: Workforce in the state’s energy industry, according to a 2013 report from the Michigan Department of Technology, Management & Budget. It’s modest compared to the several hundred thousand who work in other sectors, such as manufacturing, education and health services and professional and business services.

Here’s a breakdown:

46,000: Number working in the “energy efficiency” field, which includes heating and air-conditioning workers, plumbers and home remodelers.

23,000: Number employed by the state’s big utility power companies such as DTE Energy.

7,700: Number who work in alternative energy efforts.

6,900: Number in oil and gas exploration and extraction.