By Courtney Arnett, climate and clean energy intern at David Gardiner and Associates
One of Michigan’s largest utilities, Consumers Energy, recently announced the creation of a new green tariff aimed at providing corporate customers with 100 percent renewable energy options. This action reflects Consumer Energy’s response to the rising tide of demand for renewable energy from Fortune 500 companies, including those in the manufacturing sector. It is a major step to seizing the economic development opportunity of providing renewable energy to corporate customers.
In particular, Michigan had significant work to do to improve its renewable energy access to corporate customers. In a report from the Retail Industry Leaders Association and the Information Technology Council ranking all 50 states on the ease with which they provide easy access to renewables for corporate customers, it ranked 29th.
Moreover, Michigan is a large manufacturing state, with manufacturers accounting for 25.7 percent of all energy demand in Michigan (711.3 trillion Btu in 2015), according to the Energy Information Administration. A recent DGA report found considerable interest from manufacturers in stepping up their renewable energy purchases. 83 percent of the U.S.’s largest manufacturing companies established greenhouse gas reduction targets and 25 percent established renewable energy targets. For example, General Motors (GM), who has a significant presence throughout 10 municipalities in Michigan, has a long-term goal of powering 100 percent of their global facilities with renewables by 2050. To meet the demand of companies like GM, Michigan needed to focus on new renewable energy offerings.
Consumers Energy collaborated with Switch, an IT company with a 100 percent renewable energy target, in the design of a green tariff, a utility offering for large renewable energy customers looking to access utility-scale renewable energy projects. Together the companies created a mutually favorable offering allowing qualified customers to source up to 100 percent of their renewable energy from renewable energy sources on the grid. This deal speaks to the value of matching the demands of large corporate renewable energy buyers to favorable renewable energy offerings.
Both companies shared an aligned vision to get the data center up and running quickly. “They worked with our design team around the clock to get everything up to speed,” noted Switch’s executive vice president of strategy Adam Kramer in a Site Selection case study, “The moment we said ‘Go,’ they said ‘Go.’” He adds further, additionality, a claim allowing companies to demonstrate their support for renewables, was “key in developing the tariff with Consumers Energy and to help support the construction of new renewable energy projects.”
Access to renewable energy was a key deciding factor for Switch to choose Michigan as the location for their new data center in 2015. Describing Switch’s decision to come to Michigan, Kramer stated, “Our first question was: Can you get us our power needs? The second question was: Can you get us 100% renewable? If the answer was no, Michigan wasn’t going to be part of the site selection.”
Twenty to 30 other large-scale companies have expressed interest in becoming involved in Consumers’ green tariff because it offers large businesses the chance to meet their 100 percent renewable energy goals. Brian Rich, senior vice president of customer experience and technology supports this statement saying, “Large businesses increasingly are making commitments to a future powered by clean energy, and we are pleased to give them the tools to do that.”
Enabling access to renewable energy sources is a critical factor for a state’s attractiveness to manufacturers and other large buyers of renewable energy. Consumers Energy’s green tariff sends a strong message of its interest in seizing the opportunity to power businesses with clean renewable energy and will help attract and retain businesses in their service territory.