Demand response could limit the need for new power plants in Michigan, studies say

As Michigan utilities and policymakers grapple with how to replace lost generation from retired power plants, a pair of recent studies suggest better management of demand can be a major part of the solution – saving ratepayers money in the process.

The reports suggest that demand response efforts — or incentives meant to decrease energy demand during peak periods — can effectively limit the need for new natural gas plants in particular, which are the favored option for utilities moving forward as a relatively cheap, baseload source of energy.

Advanced Energy Economy Institute released a report Friday showing that Michigan could offset a projected 2,000 MW summer demand increase in the Lower Peninsula through 2026 just through demand response programs. In addition to avoiding or limiting the need for new power plants, it would also save ratepayers up to $1.2 billion, the report added.

Meanwhile, the Michigan Agency for Energy and the Michigan Public Service Commission released a report in late January with similar conclusions. The report was the result of an inquiry to the Midcontinent Independent System Operator about capacity constraints in the Lower Peninsula under certain circumstances, including nuclear plant closures.

“It seems that it will be necessary for Michigan (load serving entities) to follow through with their current plans for demand response development,” the MPSC report notes. “The demand response programs become increasingly important when the system is stressed due to high demand and/or unexpected plant outages.”

The MPSC report added that demand response programs would be the “most cost-effective way” to “provide significant contributions toward meeting near-term capacity requirements” and delay the need for additional peaking capacity.

http://midwestenergynews.com/2017/02/22/demand-response-could-limit-the-need-for-new-power-plants-in-michigan-studies-say/