consumersenergylakewindsenergyfarm1jpg-c3a122f47c14265a.jpg

Consumers Energy's Lake Winds Energy Park on the west side of the state, shown here, now is operational. On the east side of the state, the Cross Winds Energy Park of Tuscola County is under construction and expected to be operational by the end of the year. (Courtesy | Consumers Energy)

(Courtesy | Consumers Energy)

KALAMAZOO, MI -- Over the next five years, expect to buy less electricity generated by coal and more from natural gas.

And renewable energy such as wind power? That will surge in popularity.

Recent upheavals in the U.S. energy markets has created some clear losers (coal and oil) and winners (natural gas and renewables).

Coal is the dominant fuel used to produce electricity in Michigan, but its use is on the decline, while use of natural gas is increasing. (Source: U.S. Department of Energy)

"Renewables and natural gas are definitely trending up," said Amanda Levin, a senior writer for The Deal, a business news website. "Renewables are here to stay. I think their growth will be exponential."

The jury is still very much out on how nuclear power fits into the picture, which leaves the long-term viability of Palisades Nuclear Plant near South Haven in question.

It is entirely possible the new federal clean-energy standards proposed in June will breathe new life into the nuclear industry. The standards would require utilities to cut carbon emissions by 30 percent. Unlike power plants generated by fossil fuels, nuclear plants do not emit greenhouse gases.

"Nuclear needs to be part of the energy mix going forward," Levin said. "I think it would be wonderful" if the new clean-energy standards gives the nuclear industry a boost.

"I think nuclear gets a bad rap," Levin added. "It's very clean," and while the capital costs of the plants are extremely high, the cost of production is much lower than coal or natural gas.

But it's also very possible the supply glut of natural gas and the increasing focus on renewables means those sectors will edge out nuclear as the go-to options for new power production.

Mark Cooper, an analyst for the Institute for Energy and the Environment at the Vermont Law School, maintains the proposed federal clean-energy standards won't help the financial viability of the U.S. nuclear industry, which last opened a plant in 1989.

Michigan's three nuclear facilities --Palisades near South Haven, Cook in Bridgman and Fermi near Monroe -- produce about a quarter of the state's electrical energy. (Source: U.S. Department of Energy.)

"Old nuclear reactors suffer from the fact that they're not particularly efficient," he said. "The day after the (clean-energy) announcement, those old plants were just as inefficient as the day before.

"In the dynamic state of the energy markets, if you're not growing, you're dying," Cooper said. "And nuclear is not growing. ... It's going extinct."

By contrast, natural gas has become the darling of the utility industry, thanks to new techniques in fracking, which is a method of extracting natural gas from underground rock formations.

Fracking has greatly increased the supply of natural gas in recent years, and the supply glut has led to a substantial drop in prices, making natural gas highly attractive for fueling power plants. In 2009, natural gas produced 8 percent of Michigan's electrical power; by 2012, it was 20 percent.

Meanwhile, renewable energy in Michigan is getting a boost from a 2008 state law that requires Michigan-based utilities to have renewables as 10 percent of their power production by the end of 2015.

"The cost of renewables will drop like a rock once they reach economies of scale," Cooper said.

This chart is based on an analysis released by the U.S. Department of Energy in April projecting the total "levelized" cost of producing electricity based on the type of power generation.The analysis is for new power facilities going online in 2019. The analysis takes into account the estimated average cost of building and operating the plant, well as the cost of fuel and transmission expenses. The complete analysis can be found at http://www.eia.gov/forecasts/aeo/electricity_generation.cfm

In fact, the U.S. Department of Energy is projecting that wind-generated power will be more cost-efficient than coal and nuclear and even some types of natural gas plants by 2019.

In an analysis released in April, the DOE estimated the total "levelized" cost of producing electricity for different types of power facilities scheduled to go online in 2019.

The analysis takes into account the estimated average cost of building and operating a power plant, as well the cost of fuel and transmission expenses.

The analysis found that geothermal will be the least expensive, followed by certain types of natural-gas plants. While solar power remains on the high end, wind is more economical than coal and nuclear, and some types of natural-gas plants.

Wind provided 2.4 percent of Michigan's electricity in 2013, according to the American Wind Energy Association. That's up from 1 percent in 2012, and is enough electricity to power 300,000 Michigan households, the AWEA says.

The AWEA estimates Michigan has the potential to produce about 59,000 megawatt hours of electricity through wind power. That's more than half of the state's current consumption of electricity.

Shift at Consumers Energy

Consumers Energy, the dominant provider of electrical power in Southwest Michigan, seems to be casting its lot with natural gas and renewables.

This chart shows the mix of Consumers Energy's electrical production capabilities. In terms of the source of the power they actually sold in 2013, about 48 percent came from coal and 21 percent from nuclear. (Source: CMS Energy 2013 annual report.)

Company spokesman Dan Bishop said the company is "moving to a cleaner energy supply portfolio."

"We are retiring by April 2016 our seven oldest coal plants in Michigan," Bishop said in an email to the Kalamazoo Gazette. "In partial replacement, we are purchasing a 540 megawatt clean-burning natural gas plant in Jackson."

Bishop also notes that Consumers is "Michigan's leading supplier of renewable energy."

"By the end of 2014, our second wind farm — the 110-megawatt Cross Winds Energy Park in Tuscola County — will begin serving customers," he said. "We will beat the state's requirement for 10 percent Michigan-based renewable supply by one year."

Bishop said future growth of renewable energy "will depend largely on future state legislation."

In 2013, about 48 percent of Consumer's electrical supply came from coal-fired plants and 21 percent came from Palisades.

Although Consumers sold Palisades in 2007 to Entergy Corp., part of the deal was a contract in which Consumers agreed to purchase all the power produced by Palisades for 15 years.

That contract expires in 2022. Bishop declined to speculate whether it would be renewed. Palisades is licensed to operate until 2031.

Annual generation of electrical power by Consumers Energy, including the power purchased from Palisades Nuclear Plant. (Source: CMS Energy 2013 annual report.)

In addition to changes in clear-air standards and the drop in cost for power generated by natural gas and renewables, Consumers and other utilities also have had to deal with a drop in demand, largely linked to increased energy conservation.

"There are more and more energy-saving devices, more efficiency in the infrastructure," said David Lochbaum, director of the Nuclear Safety Project for the Union of Concerned Scientists.

In 2013, Consumers' electrical sales were down 14.5 percent compared to 2007.

"It is true that more customers are using energy efficiency programs which is saving them money and moderating electric sales," Bishop said.

However, he said, for the first half of 2014, Cosumers' electrical sales were up 2 percent compared to the first half of 2013.

That's primarily due to the harsh winter and a 10 percent rise in sales to industrial customers, he said.

Energy diversity

Several of the experts interviewed for this story underscored the need for diversity in energy production.

This chart compares the average cost of generating a million Btus of electricity at power plants fueled by oil, natural gas, coal and nuclear. It is does not include capital costs, which vary significantly between the different types of plants. (Source: U.S. Department of Energy.)

"If Michigan had all their power coming from nuclear plants or natural gas," customers get hurt when there's an issue with supply or costs go up, said David Lochbaum, director of the Nuclear Safety Project for the Union of Concerned Scientists.

"Diversity smooths out the highs and lows, and it ensures stability," he said. "We think it's key to our economy."

Coal has long been the dominant energy source for electrical production in Michigan, and coal-generated plants still produce almost half of the state's electricity.

The advantages of coal: It's cheap and abundant, and it's not hard to to turn coal into electricity.

But the environmental downsides of coal have become increasingly obvious: Coal mining can devastate the landscape, and coal plants produce a variety of problematic emissions -- from greenhouse gases associated with climate change, to sulfur dioxide linked to acid rain, to coal ash that can cause asthma and respiratory problems.

For decades, nuclear has ranked No. 2 as the source of Michigan's electricity, generating about a quarter of the state's electrical power.

The advantages of nuclear include the low cost of production once the plant is up and running, and the fact that, unlike fossil-fuel plants, it doesn't produce greenhouse gases.

This chart shows the types of fuel used to generate Michigan's electrical power inn 2012. (Source: U.S. Department of Energy)

But the cost of building and maintaining a nuclear plant are extremely high, and it's much more regulated than other types of plants, adding to the costs.

And in addition to the fear of a nuclear accident, perhaps the biggest issue with nuclear is the unresolved problem of disposing of nuclear waste. Right now, the spent fuel rods for Palisades are stored on-site in concrete casks, but nobody sees that as a permanent solution. Congress has been debating the matter since the 1980s and is nowhere close to a solution.

For a time, oil was another viable option to fuel power plants: The price was lower than natural gas and, compared to coal-fired plants, it was easier to adjust production up or down.

Now oil has fallen out of favor as prices have become too high and too volatile.

A decade ago, the cost for Consumers to generate electric power using natural gas was twice that of using oil, according to figures in Consumer Energy's annual reports. Since then, the cost of natural gas has plummeted and the price of oil has skyrocketed. In 2013, electrical power produced by natural gas cost $4.68 per million BTUs; for oil, it was $19.47, according to Consumers.

Natural gas also is much cleaner than coal and the plants are far cheaper to build than nuclear facilities.

Wind-generated power provided only 1 percent of Michigan's electricity in 2012, but it is showing exponential growth that is expected to continue. (Source: U.S. Department of Education.)

Yet natural gas also has its own considerable downsides. Major concerns have been raised about the environmental impact of fracking, and natural gas explosions can be as problematic as oil spills or coal-mining accidents.

In addition, natural gas requires an extensive pipeline network, which means it tends to be a regional product. And while natural gas plants emit less carbon than coal, they are do produce some greenhouse gases.

Power generated by wind or solar have the huge benefits of minimal environmental impact -- and the fuel source is free.

But they also require considerable capital expenditures and are intermittent power sources. Storing the energy remains expensive, driving up costs, and makes it important to have a backup power source. Transmission also can be an issue, since the best places for wind farms or solar panels aren't necessarily close to where the electricity is most needed.

Lochbaum said all the ways to produce energy have limitations, something that can lost over debating the merits of a particular energy sources such as nuclear.

"Advocates or opponents tend to pick the parts that support their case," he said.

"In fact, none of the sources are are all evil or all good," Lochbaum said. "All of them have some thorns on the rose."

MORE:

• Palisades: Is it safe?

Julie Mack covers K-12 education and writes a column for Kalamazoo Gazette. Email her at jmack1@mlive.com, call her at 269-350-0277 or follow her on Twitter @kzjuliemack.