IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v12y2019i4p674-d207415.html
   My bibliography  Save this article

Policies to Overcome Barriers for Renewable Energy Distributed Generation: A Case Study of Utility Structure and Regulatory Regimes in Michigan

Author

Listed:
  • Emily Prehoda

    (Department of Social Sciences, Michigan Technological University, Houghton, MI 49931, USA)

  • Joshua M. Pearce

    (Department of Material Science & Engineering and Department of Electrical & Computer Engineering, Michigan Technological University, Houghton, MI 49931, USA
    Department of Electronics and Nanoengineering, School of Electrical Engineering, Aalto University, FI-00076 Espoo, Finland)

  • Chelsea Schelly

    (Department of Social Sciences, Michigan Technological University, Houghton, MI 49931, USA)

Abstract

Because of its environmental damage and now often being the most expensive source for electricity production, coal use is declining throughout the United States. Michigan has no active coal mining and seemingly supportive legislation for distributed generation (DG) and renewable energy (RE) technologies. However, Michigan still derives approximately half of its power production from large centralized coal plants, despite the availability of much lower cost RE DG technologies. To understand this conundrum, this study reviews how Michigan investor owned utilities utilize their political power to perpetuate utility structures that work toward the financial interests of the utilities rather than the best interests of the state’s electricity consumers, including other firms and residents. Background is provided covering the concept of DG, the cost savings associated with DG, and utility regulatory regimes at the national, regional, state, and local levels. Recent case studies from specific utility strategies are provided in order to illustrate how Michigan utilities manipulate regulatory regimes via policy misinterpretation to deter or hinder the proliferation of DG in favor of maintaining the existing interests in centralized, fossil fuel-based electrical energy production. The results of this study demonstrate how DG proliferation is hindered by Michigan regulated utilities via the exercise of political power within existing legal and regulatory regimes. This highlights the need to think about how utilities may interpret and implement rules when designing energy legislation and policy to maximize the benefits for consumers and society. Policy recommendations and alternate strategies are provided to help enhance the role of energy policy to improve rather than limit the utilization of RE DG.

Suggested Citation

  • Emily Prehoda & Joshua M. Pearce & Chelsea Schelly, 2019. "Policies to Overcome Barriers for Renewable Energy Distributed Generation: A Case Study of Utility Structure and Regulatory Regimes in Michigan," Energies, MDPI, vol. 12(4), pages 1-23, February.
  • Handle: RePEc:gam:jeners:v:12:y:2019:i:4:p:674-:d:207415
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/12/4/674/pdf
    Download Restriction: no

    File URL: https://www.mdpi.com/1996-1073/12/4/674/
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Gulli, Francesco, 2006. "Small distributed generation versus centralised supply: a social cost-benefit analysis in the residential and service sectors," Energy Policy, Elsevier, vol. 34(7), pages 804-832, May.
    2. Pearce, Joshua M. & Harris, Paul J., 2007. "Reducing greenhouse gas emissions by inducing energy conservation and distributed generation from elimination of electric utility customer charges," Energy Policy, Elsevier, vol. 35(12), pages 6514-6525, December.
    3. Kantamneni, Abhilash & Winkler, Richelle & Gauchia, Lucia & Pearce, Joshua M., 2016. "Emerging economic viability of grid defection in a northern climate using solar hybrid systems," Energy Policy, Elsevier, vol. 95(C), pages 378-389.
    4. Lai, Chun Sing & McCulloch, Malcolm D., 2017. "Levelized cost of electricity for solar photovoltaic and electrical energy storage," Applied Energy, Elsevier, vol. 190(C), pages 191-203.
    5. Pepermans, G. & Driesen, J. & Haeseldonckx, D. & Belmans, R. & D'haeseleer, W., 2005. "Distributed generation: definition, benefits and issues," Energy Policy, Elsevier, vol. 33(6), pages 787-798, April.
    6. Laws, Nicholas D. & Epps, Brenden P. & Peterson, Steven O. & Laser, Mark S. & Wanjiru, G. Kamau, 2017. "On the utility death spiral and the impact of utility rate structures on the adoption of residential solar photovoltaics and energy storage," Applied Energy, Elsevier, vol. 185(P1), pages 627-641.
    7. Lucas W Davis, 2017. "Evidence of a decline in electricity use by U.S. households," Economics Bulletin, AccessEcon, vol. 37(2), pages 1098-1105.
    8. Ellabban, Omar & Abu-Rub, Haitham & Blaabjerg, Frede, 2014. "Renewable energy resources: Current status, future prospects and their enabling technology," Renewable and Sustainable Energy Reviews, Elsevier, vol. 39(C), pages 748-764.
    9. Prehoda, Emily W. & Pearce, Joshua M., 2017. "Potential lives saved by replacing coal with solar photovoltaic electricity production in the U.S," Renewable and Sustainable Energy Reviews, Elsevier, vol. 80(C), pages 710-715.
    10. Prehoda, Emily W. & Schelly, Chelsea & Pearce, Joshua M., 2017. "U.S. strategic solar photovoltaic-powered microgrid deployment for enhanced national security," Renewable and Sustainable Energy Reviews, Elsevier, vol. 78(C), pages 167-175.
    11. Yael Parag & Benjamin K. Sovacool, 2016. "Electricity market design for the prosumer era," Nature Energy, Nature, vol. 1(4), pages 1-6, April.
    12. Panwar, N.L. & Kaushik, S.C. & Kothari, Surendra, 2011. "Role of renewable energy sources in environmental protection: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(3), pages 1513-1524, April.
    13. Pearce, J.M., 2009. "Expanding photovoltaic penetration with residential distributed generation from hybrid solar photovoltaic and combined heat and power systems," Energy, Elsevier, vol. 34(11), pages 1947-1954.
    14. Branker, K. & Pathak, M.J.M. & Pearce, J.M., 2011. "A review of solar photovoltaic levelized cost of electricity," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(9), pages 4470-4482.
    15. Olsaretti,Serena, 2004. "Liberty, Desert and the Market," Cambridge Books, Cambridge University Press, number 9780521836357, October.
    16. Adelaja, Soji & Shaw, Judy & Beyea, Wayne & Charles McKeown, J.D., 2010. "Renewable energy potential on brownfield sites: A case study of Michigan," Energy Policy, Elsevier, vol. 38(11), pages 7021-7030, November.
    17. Bajpai, Prabodh & Dash, Vaishalee, 2012. "Hybrid renewable energy systems for power generation in stand-alone applications: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(5), pages 2926-2939.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Muna Hindiyeh & Aiman Albatayneh & Rashed Altarawneh & Mustafa Jaradat & Murad Al-Omary & Qasem Abdelal & Tarek Tayara & Osama Khalil & Adel Juaidi & Ramez Abdallah & Partick Dutournié & Mejdi Jeguiri, 2021. "Sea Level Rise Mitigation by Global Sea Water Desalination Using Renewable-Energy-Powered Plants," Sustainability, MDPI, vol. 13(17), pages 1-21, August.
    2. Joshua M. Pearce & Nelson Sommerfeldt, 2021. "Economics of Grid-Tied Solar Photovoltaic Systems Coupled to Heat Pumps: The Case of Northern Climates of the U.S. and Canada," Energies, MDPI, vol. 14(4), pages 1-17, February.
    3. Martin Libra & Milan Daneček & Jan Lešetický & Vladislav Poulek & Jan Sedláček & Václav Beránek, 2019. "Monitoring of Defects of a Photovoltaic Power Plant Using a Drone," Energies, MDPI, vol. 12(5), pages 1-9, February.
    4. Peffley, Trevor B. & Pearce, Joshua M., 2020. "The potential for grid defection of small and medium sized enterprises using solar photovoltaic, battery and generator hybrid systems," Renewable Energy, Elsevier, vol. 148(C), pages 193-204.
    5. Rittick Maity & Kumarasamy Sudhakar & Amir Abdul Razak & Alagar Karthick & Dan Barbulescu, 2023. "Agrivoltaic: A Strategic Assessment Using SWOT and TOWS Matrix," Energies, MDPI, vol. 16(8), pages 1-18, April.
    6. Amrutha Raju Battula & Sandeep Vuddanti & Surender Reddy Salkuti, 2021. "Review of Energy Management System Approaches in Microgrids," Energies, MDPI, vol. 14(17), pages 1-32, September.
    7. Gorjian, Shiva & Bousi, Erion & Özdemir, Özal Emre & Trommsdorff, Max & Kumar, Nallapaneni Manoj & Anand, Abhishek & Kant, Karunesh & Chopra, Shauhrat S., 2022. "Progress and challenges of crop production and electricity generation in agrivoltaic systems using semi-transparent photovoltaic technology," Renewable and Sustainable Energy Reviews, Elsevier, vol. 158(C).
    8. Hayibo, Koami Soulemane & Pearce, Joshua M., 2021. "A review of the value of solar methodology with a case study of the U.S. VOS," Renewable and Sustainable Energy Reviews, Elsevier, vol. 137(C).
    9. Amro M Elshurafa & Abdel Rahman Muhsen, 2019. "The Upper Limit of Distributed Solar PV Capacity in Riyadh: A GIS-Assisted Study," Sustainability, MDPI, vol. 11(16), pages 1-20, August.
    10. Adewale A. Adesanya, 2021. "Can Michigan’s Upper Peninsula Achieve Justice in Transitioning to 100% Renewable Electricity? Survey of Public Perceptions in Sociotechnical Change," Sustainability, MDPI, vol. 13(1), pages 1-25, January.
    11. Pascaris1, Alexis S. & Schelly, Chelsea & Rouleau, Mark & Pearce, Joshua M., 2021. "Do Agrivoltaics Improve Public Support for Solar Photovoltaic Development? Survey Says: Yes!," SocArXiv efasx, Center for Open Science.
    12. Chelsea Schelly & Don Lee & Elise Matz & Joshua M. Pearce, 2021. "Applying a Relationally and Socially Embedded Decision Framework to Solar Photovoltaic Adoption: A Conceptual Exploration," Sustainability, MDPI, vol. 13(2), pages 1-18, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Botelho, D.F. & de Oliveira, L.W. & Dias, B.H. & Soares, T.A. & Moraes, C.A., 2022. "Prosumer integration into the Brazilian energy sector: An overview of innovative business models and regulatory challenges," Energy Policy, Elsevier, vol. 161(C).
    2. Kamel, Salah & El-Sattar, Hoda Abd & Vera, David & Jurado, Francisco, 2018. "Bioenergy potential from agriculture residues for energy generation in Egypt," Renewable and Sustainable Energy Reviews, Elsevier, vol. 94(C), pages 28-37.
    3. Inês, Campos & Guilherme, Pontes Luz & Esther, Marín-González & Swantje, Gährs & Stephen, Hall & Lars, Holstenkamp, 2020. "Regulatory challenges and opportunities for collective renewable energy prosumers in the EU," Energy Policy, Elsevier, vol. 138(C).
    4. Sommerfeldt, Nelson & Pearce, Joshua M., 2023. "Can grid-tied solar photovoltaics lead to residential heating electrification? A techno-economic case study in the midwestern U.S," Applied Energy, Elsevier, vol. 336(C).
    5. Pablo Benalcazar & Adam Suski & Jacek Kamiński, 2020. "Optimal Sizing and Scheduling of Hybrid Energy Systems: The Cases of Morona Santiago and the Galapagos Islands," Energies, MDPI, vol. 13(15), pages 1-20, August.
    6. Chelsea Schelly & Don Lee & Elise Matz & Joshua M. Pearce, 2021. "Applying a Relationally and Socially Embedded Decision Framework to Solar Photovoltaic Adoption: A Conceptual Exploration," Sustainability, MDPI, vol. 13(2), pages 1-18, January.
    7. Joshua M. Pearce & Emily Prehoda, 2019. "Could 79 People Solarize the U.S. Electric Grid?," Societies, MDPI, vol. 9(1), pages 1-27, March.
    8. Hayibo, Koami Soulemane & Pearce, Joshua M., 2021. "A review of the value of solar methodology with a case study of the U.S. VOS," Renewable and Sustainable Energy Reviews, Elsevier, vol. 137(C).
    9. Peffley, Trevor B. & Pearce, Joshua M., 2020. "The potential for grid defection of small and medium sized enterprises using solar photovoltaic, battery and generator hybrid systems," Renewable Energy, Elsevier, vol. 148(C), pages 193-204.
    10. Fuquan Zhao & Feiqi Liu & Han Hao & Zongwei Liu, 2020. "Carbon Emission Reduction Strategy for Energy Users in China," Sustainability, MDPI, vol. 12(16), pages 1-19, August.
    11. Zhang, Yijie & Ma, Tao & Elia Campana, Pietro & Yamaguchi, Yohei & Dai, Yanjun, 2020. "A techno-economic sizing method for grid-connected household photovoltaic battery systems," Applied Energy, Elsevier, vol. 269(C).
    12. Ahsan, Syed M. & Khan, Hassan A. & Hassan, Naveed-ul & Arif, Syed M. & Lie, Tek-Tjing, 2020. "Optimized power dispatch for solar photovoltaic-storage system with multiple buildings in bilateral contracts," Applied Energy, Elsevier, vol. 273(C).
    13. Rawat, Rahul & Kaushik, S.C. & Lamba, Ravita, 2016. "A review on modeling, design methodology and size optimization of photovoltaic based water pumping, standalone and grid connected system," Renewable and Sustainable Energy Reviews, Elsevier, vol. 57(C), pages 1506-1519.
    14. Prehoda, Emily W. & Pearce, Joshua M., 2017. "Potential lives saved by replacing coal with solar photovoltaic electricity production in the U.S," Renewable and Sustainable Energy Reviews, Elsevier, vol. 80(C), pages 710-715.
    15. Branker, K. & Pathak, M.J.M. & Pearce, J.M., 2011. "A review of solar photovoltaic levelized cost of electricity," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(9), pages 4470-4482.
    16. Avri Eitan, 2021. "Promoting Renewable Energy to Cope with Climate Change—Policy Discourse in Israel," Sustainability, MDPI, vol. 13(6), pages 1-17, March.
    17. Tan, Wen-Shan & Hassan, Mohammad Yusri & Majid, Md Shah & Abdul Rahman, Hasimah, 2013. "Optimal distributed renewable generation planning: A review of different approaches," Renewable and Sustainable Energy Reviews, Elsevier, vol. 18(C), pages 626-645.
    18. Kantamneni, Abhilash & Winkler, Richelle & Gauchia, Lucia & Pearce, Joshua M., 2016. "Emerging economic viability of grid defection in a northern climate using solar hybrid systems," Energy Policy, Elsevier, vol. 95(C), pages 378-389.
    19. Chen, Hao & Chen, Jiachuan & Han, Guoyi & Cui, Qi, 2022. "Winding down the wind power curtailment in China: What made the difference?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 167(C).
    20. Joshua M. Pearce & Nelson Sommerfeldt, 2021. "Economics of Grid-Tied Solar Photovoltaic Systems Coupled to Heat Pumps: The Case of Northern Climates of the U.S. and Canada," Energies, MDPI, vol. 14(4), pages 1-17, February.

    More about this item

    Keywords

    distributed generation; energy policy; renewable energy; electric utilities; utility regulation;
    All these keywords.

    JEL classification:

    • Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics
    • Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q47 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy Forecasting
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q49 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Other

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jeners:v:12:y:2019:i:4:p:674-:d:207415. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.