Upper Peninsula Alternative Energy Workshop for Planners

Upper Peninsula Alternative EnergyAbhilash “Abhi” Kantamneni| Michigan Technological University

2Source: http://www.michigan.gov/mpsc

4 Investor-Owned Utility Companies

3 Rural Electric Cooperatives

13 Municipal Electric Utilities

3

OCREA

UPPCO

WEPCO

DTE ELECTRIC

CONSUMERS

CHERRYLAND

THUMBXCEL

AEP

$0.24

$0.21$0.21

$0.16$0.16

$0.15$0.15$0.15$0.14$0.14$0.14$0.13

$0.11$0.11$0.11$0.10$0.10

MI Average Residential Electric Rates 2013[$/kWh]

MI Average: $0.14/kWhSource: MPSC Utility Company Annual Reports 2013

Residential Electric Rates

4

Residential Electric Rate Increases

OCREA

UPPCO

WEPCO

DTE ELECTRIC

CONSUMERS

CHERRYLAND

THUMBXCEL

AEP

116%

94%107%

48%

86%

49%73%72%79%

40%42%

76%

29%39%43%61%73%

MI Average Residential Electric Rate Increase 2001-2013

MI Average: 74%Source: MPSC Utility Rates Summary

5

Annual Upper Peninsula Energy Expenditures[$ Millions] UP Total: ~$142 Million

Source: MPSC Utility Company Annual Reports 2013

OREA

Alger D

elta

UPPCO WE

Cloverla

ndExce

lWPSC

$5$10

$55

$27 $3

2

$6 $7

Residential

6

OREA

Alger D

elta

UPPCO WE

Cloverla

ndExce

lWPSC

$1 $2

$34

$19

$17

$5 $3

Commercial

Annual Upper Peninsula Energy Expenditures[$ Millions] UP Total: ~$82 Million

Source: MPSC Utility Company Annual Reports 2013

7

Annual Upper Peninsula Energy Expenditures[$ Millions] UP Total: ~$157 Million

Source: MPSC Utility Company Annual Reports 2013

OREA

Alger D

elta

UPPCO WE

Cloverla

ndExce

lWPSC

$0 $1

$20

$93

$29

$2$11

Industrial

8

Annual Upper Peninsula Energy Expenditures[$ Millions] UP Total: ~$385 Million

Source: MPSC Utility Company Annual Reports 2013

OREA

Alger D

elta

UPPCO WE

Cloverla

ndExce

lWPSC

$6 $13

$110

$141

$80

$14 $2

1

Total

9

Problem Statement:Can we help UP commercial and industrial customers save money on energy costs and reinvest in workforce development?

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What is ‘Alternative Energy’?

11

Clean?

Green?

Alternative?

No-Carbon?Sustainable?

Environmentally Friendly?

Non-polluting?

12

“Energy that comes from resources which are naturally replenished on a human timescale” 

Renewable ≠ Alternative !!!!

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Renewable: ‘naturally replenished on a human timescale’

Alternative: ‘not conventional’

Sustainable: ‘ability to endure’

14

Midwest Region Fuel Mix (2013)

Non Renewables: 95.11% Renewables: 4.89%

CoalNuclear

GasOil

HydroelectricBiofuelBiomass WindWoodOtherSolar

15

KRC+CUPPAD Original Proposal to EDA• Solar• Wind• Geothermal• Energy Efficiency• Natural Gas (CHP)• Biomass• Waste Heat Recapture

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Policy Constraints: MI Public Act 295 (2008)

Renewable Energy Standard

(RES)

10% of all retail electric sales for all

utilities in MI to come from renewable

sources

Energy Optimization Program (EO)

Authorizes EO surcharge on monthly

bills to finance customer Energy

Efficiency upgrades

Net Metering Program

On site renewable electric generation

with credits for monthly excess

generation

17

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Policy Constraints: MI Public Act 295 (2008)

Renewable Energy Standard

(RES)

10% of all retail electric sales for all

utilities in MI to come from renewable

sources

Energy Optimization Program (EO)

Authorizes EO surcharge on monthly

bills to finance customer Energy

Efficiency upgrades

Net Metering Program

On site renewable electric generation

with credits for monthly excess

generation

19

UPPCO FUEL MIX (2013)

Coal

Nuclear

Gas

OilHydroelectric

Biofuel Biomass WindWoodOther

Solar

Non Renewables: 87.59% Renewables: 12.41%

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OCREA FUEL MIX (2013)

Non Renewables: 82.4% Renewables: 7.6%

Coal

Nuclear

Gas Oil Hydroelectric

Biomass WindWood Other

21

Renewable Energy Standard

(RES)

All utilities on track to meet 10% RES by

2015

Cost of Generation from renewables

50% the cost of new coal generation

Energy Optimization Program (EO)

All utilities met or exceeded near term

targets

Cost of energy conservation 10%

the cost of new coal generation

Net Metering Program

Total customers self generating increases

from 20 to 1500

Total installed self generation

increases from 300*kW to 13,300kW

MI Public Act 295 (2008) Impact: Positive

* estimated

Source: MPSC Reports

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Houghton Winters

Source: Mining Journal

Source: Mining Gazette

Source: Michigan Tech Alumni

Source: Mining Journal

Source: boniashburn.com

23

OCREA

UPPCO

WEPCO

DTE ELECTRIC

CONSUMERS

CHERRYLAND

THUMBXCEL

AEP

$0.24

$0.21$0.21

$0.16$0.16

$0.15$0.15$0.15$0.14$0.14$0.14$0.13

$0.11$0.11$0.11$0.10$0.10

MI Average Residential Electric Rates 2013[$/kWh]

MI Average: $0.14/kWhSource: MPSC Utility Company Annual Reports 2013

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Average Residential Electricity Retail Rates

by State (2013)State Average Price

[$/kWh]Hawaii $0.37

Houghton $0.21-$0.24New York $0.19

Alaska $0.19Connecticut $0.18

Vermont $0.18New Hampshire $0.17

California $0.16New England $0.16

Middle Atlantic $0.16Massachusetts $0.16

New Jersey $0.16Michigan $0.15

Source: www.eia.gov

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Michigan Tech KRC Photovoltaic Research Center

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Location: Tree Cover and Solar Window

Image Source: www.solarfeeds.com

Best Summer Angle: 30*

Best Winter Angle: 60*

Best Average Angle: 47*

27

Advantages of High Module Tilt: Albedo

Source: nsidc.org

1 16 31 46 61 76 91 1061211361511661811962112262412562712863013163313463610

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

Solar Irradiation and Albedo

S_Horizontal (W/m^2) Albedo (W/m^2)

Day of the Year

W/m

^2

Source: MTU KRC

28

Advantages of High Module Tilt: Snow Shedding

4 188 372 556 740 924 11081292147616601844202822122396258027642948313233163500368438680

20

40

60

80

100

120

140

PV System Output Under Snowy Conditions

45* 30* 15*

Hours since 12:00 Am Nov 1 2013

Ener

gy P

rodu

ced

(Wh)

Shedding from 45*

Source: MTU KRC

29Source: MTU KRC Data

30

Houghton Average = 3.8 Peak Sun Hours/Day*Energy = 1kW*3.8h = 3.8kWh

Source: pveducation.org

*Source: MTU KRC Data

31

Source: pveducation.org

California Average = 6 Peak Sun Hours/Day*Energy = 1kW*6h = 6kWh

32Source: MTU KRC Data

Nov-Feb total irradiance = only 8% year total

33Source: Michigan Public Service Commission

34

Excess Generation

Excess Consumption

35

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ss

Cons

umpti

on

Exce

ss

Cons

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on

Exce

ss

Gene

ratio

n

36

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ss C

onsu

mpti

on

Exce

ss

Cons

umpti

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Gene

ratio

n

37

Source: www.nrel.gov

38

Simple ROI Calculations for Houghton

•6000 [kWh] (source)Annual Consumption :

•6000/365 = ~ 16.4 [kWh]Daily Consumption:

•3.8 [h]Average Daily Sun Hours

39

Simple ROI Calculations for Houghton

• Daily Consumption / (Sun Hours * Derate Factor)= 16.4/(3.8*0.8) = 5.4 [kW]System Size

• System Size*Cost Per kW = 5.4*$3,500 =$18,900System Cost

• 30% of system costs = $18,900 – 30%*18,900 = $13,448

Federal Tax Rebate

40

Simple ROI Calculations for Houghton

•Energy*Rates = 6000*0.21 = $1,260

Annual Savings

•System Costs / Annual Savings = 11 years

Payback Period

41

42

Large majority of installed net metered customer generation is Solar. Source: MPSC Annual Net Metering Report 2014

Figure: MPSC 2013 Net Metering Program - Installed CapacityFigure: MPSC 2013 Net Metering Program - Installations

Growth of Solar in Michigan

43Source: National Renewable Energy Labs

*Figure: MIRECS 2009-2013 Credits by Energy Source

44

45

Geothermal• Electricity and/or heat

46

Policy Constraints: MI Public Act 295 (2008)

Renewable Energy Standard

(RES)

10% of all retail electric sales for all

utilities in MI to come from renewable

sources

Energy Optimization Program (EO)

Authorizes EO surcharge on monthly

bills to finance customer Energy

Efficiency upgrades

Net Metering Program

On site renewable electric generation

with credits for monthly excess

generation

47

KRC+CUPPAD Original Proposal to EDA• Solar• Wind• Geothermal• Energy Efficiency• Natural Gas (CHP)• Biomass• Waste Heat Recapture

48

Demand vs Energy Charges

49

50

WPS vs OCREA Time Of Use

51

Problem Statement:Can we help UP commercial and industrial customers save money on energy costs and reinvest in workforce development?

Goals: Help businesses understand their energy usageHelp planners, park managers understand energy infrastructureIdentify low-hanging cost saving opportunitiesPolicy agnostic frameworkReplicable and adaptable resource baseSustainable practices for client retention (NOT green/alternative/renewable)

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Contact Information

Abhilash Kantamneni

akantamn@mtu.edu

www.Abhilash.me

@akantamn

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