As Michigan energy providers work towards creating a more renewable energy grid by 2040, baseload capacity should be at the forefront of their reforms. Currently, Michigan produces most of its baseload generation from non-renewable sources, like coal and nuclear. But other options that positively impact the environment and the economy exist. Biomass energy, or energy coming from plant and animal materials, is an effective source of baseload generation that can benefit Michigan’s economy, while being a more energy efficient option than the status quo.
Baseload capacity is energy generation that is always “on,” meaning that baseload capacity is an around-the-clock electric power source used to back-up other energy generating sources. These large generators are used in case a less reliable power source fails, preventing any noticeable loss of power. Historically, coal and nuclear have been the most common sources of baseload generation, but their fuel sources can be expensive, damaging to the environment, and have to be transported over long distances. Biomass, on the other hand, insulates Michigan from potential disruption to the energy supply. According to Gary Melow, the Director of Michigan Biomass, biomass fuel is within fifty miles of the plant, ready to be used when necessary.
Increasing our dependence on biomass as a form of baseload capacity would prove beneficial for the economy in multiple ways. Melow, citing research by the Department of Natural Resources, explains that biomass generation creates a trickle-down effect. It provides 200 million dollars of economic benefit, mostly to rural communities that are near the forest resources necessary to generate biomass power. As the demand for electricity rises, the need for the procurement, processing, and transportation of fuel goes up, creating permanent jobs that pay well. In fact, jobs inside biomass plants are the highest paying jobs in the forest products sector.
Biomass energy has many beneficial side effects as well. Biomass creates markets for woods and other materials that would otherwise just be waste. For the generators of this waste, loggers for example, the cost of disposing of waste turns into revenue for them. They can take something of very little value, like wood chips, and turn it into something of immense value – energy. Materials that would otherwise just be thrown away end up becoming profitable, which lowers the cost of production for companies, and therefore lowers prices for consumers in the long run.
Unlike other forms of energy, biomass is not subsidized. It does not qualify for any production tax credits or investment tax credits authorized by Congress. So instead of paying for the energy directly through energy costs and indirectly through tax credits, consumers are only paying for biomass directly.
Biomass energy generation is a fantastic baseload option for Michigan. By incorporating more biomass energy into our grid, Michigan will see benefits to the economy and ratepayers while creating a much more efficient energy system that relies on local and abundant fuel sources.
Susannah Barnes is a Fellow with the Michigan Conservative Energy Forum researching baseload capacity in Michigan. Special thanks to Gary Melow, Director of Michigan Biomass, for his help on this piece.