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Analysis of Holland Energy Plan Favors Gas over Coal

Rollout draws praise, criticism, calls for more attention to efficiency

Power to Change | August 31, 2012 | By Jim Dulzo

MLUI's Holland Coverage


MLUI has been closely following developments in Holland, Mich., over the past year as city leaders and residents worked through a regional energy plan. Here is a list of our stories, written by Senior Energy Policy Specialist Jim Dulzo. 

 

 Holland Set to Choose from Bold Efficiency 'Scenarios'

Old World method would trim coal power, cut energy costs, aid prosperity

 

 Consultant, Holland Staff Pick a Bold Energy Strategy
Citizens committee meets Monday as officials, residents eye big report

 

 Holland Council Weighs Pioneering Energy Strategy
But, probing beyond report's scope, members offer few opinions

 

 Holland OKs Energy Work Groups, but Not Full Plan
Wednesday study session to compare coal, gas plant costs amid calls for more efficiency

 

 Analysis of Holland Energy Plan Favors Gas over Coal

Rollout draws praise, criticism, calls for more attention to efficiency

 

 Holland OKs Gas Plant, Turns To Efficiency Projects
Citizen task forces eye energy-saving pilots as coal plant proposal fades

 

Jim DulzoJim Dulzo is the Michigan Land Use Institute’s senior energy policy specialist. Reach him at jimdulzo@mlui.org.
 

 

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A slide from the recently released Sustainable Return on Investment analysis.
A slide from the recently released Sustainable Return on Investment analysis. The complete presentation is available here

HOLLAND, Mich.—The Holland Board of Public Works released its long-anticipated report comparing the economic, environmental, and social effects of a new coal-fired plant with those of a new natural gas-fired plant, and the news is not good for coal.

The study—the Sustainable Return on Investment Analysis Results (SROI)—finds that using natural gas to meet Holland’s future base-load needs would be cheaper, produce fewer toxic emissions, and release about half the climate-changing greenhouse gases than the coal plant HBPW had proposed.

Now the utility wants to hear what residents think about the study and their town’s energy future, and will host public hearings September 4 and 5 from 5 to 7 p.m. at the DoubleTree Hotel on 24th Street in Holland.

But the SROI study, and the way the municipal utility is gathering comments, worry some clean-energy advocates.

The utility commissioned the SROI to check the economics of Holland’s Community Energy Plan, a 40-year economic development strategy released last fall by the city-appointed Holland Community Sustainability Committee. That committee considered four scenarios for sharply cutting Holland’s greenhouse gas emissions—a broad measure of energy efficiency. Each aimed to slow energy cost increases, make Holland more competitive, increase local employment, and combat climate change.

Consultant Garforth International LLC, which wrote the CEP, and city staff both endorsed “Scenario B,” which calls for cutting single-family home energy use by 53 to 66 percent, all other buildings’ energy use by 30 to 50 percent, and using natural gas and renewables to make electricity.

Some environmental groups and local citizens, however, believe that while the CEP is a good first step, its lack of a clearly stated financing plan for its ambitious efficiency goals makes the SROI analysis premature.

“The math is simple," said Dr. Martin Kushler, of the American Council for an Energy Efficient Economy, in a Clean Energy Now coalition press release just after the Aug. 8 SROI rollout. “Energy efficiency saves energy at one-third the cost of [producing it with] a new power plant. Holland’s plan should include maximum energy efficiency programs first, before calculating how much new power generation is needed.”

CEN members also dislike the dates the city utility chose for its hearings—the day after Labor Day and the first day of school. They say the dates allow little time for residents to study the highly technical report, and they fear the utility is trying to hurry a decision to build the large gas-fired plant that SROI analyzed in its own, additional “Scenario G”—a scenario coalition members dislike.

But people involved in the CEP or the SROI say that next week’s hearings are just an initial step. They argue that the city council’s recent, unanimous approval of six CEP-based “action teams”—most of them efficiency-related projects—will provide many other opportunities for citizens to participate in translating an imprecise strategy into precise plans. One team, they pointed out, will look closely at a new power plant.

At the Aug. 8 SROI rollout, Holland Board of Public Works’ Dave Koster said the study merely bookmarked the three scenarios—two from the CEP and its own—that are the most sustainable, and that tweaking them was likely and could happen at a charrette the utility will hold this fall.

Mr. Koster doesn’t think the renewables-free Scenario G, which got SROI’s highest economic marks, will steer the CEP away from clean energy; in fact, his company is now seriously considering wind power.

“There are two very good proposals that we are looking at that would carry power from other wind developments, rather than developing that ourselves,” he said. “It could actually move the [renewables] time frame up.”

Meanwhile, the co-chair of the sustainability committee predicts the city council will endorse the overall CEP strategy soon—something some citizen groups, several city council members, and the sustainability committee have repeatedly urged them to do.

More Efficiency, Less Hurry?

HDR Inc., a global engineering, architectural, and consulting company specializing in large-scale infrastructure projects, produced the SROI study. But unlike most return-on-investment studies, HDR also considered the health effects, environmental costs, and economic and social consequences of the four CEP scenarios, plus several of their own.

The report’s charts and graphs indicate that CEP Scenarios A, which avoids wind and solar power, and B, which includes them, as well as the new, all-gas Scenario G, provided the best returns on those measures.

But Holland native and Hope College graduate Monica Hallacy, who closely follows the city’s energy issues, dislikes how the utility is managing the SROI process, what she says was the utility’s poor promotion of the Aug. 8 rollout, the exclusion of citizen comments that evening, the report’s highly technical language, and scheduling of the upcoming public hearings.

“The public is getting less than two weeks’ notice for an event that is happening right after Labor Day,” she said, “Even the Aug. 8 session had just two weeks’ notice, when everyone’s on vacation.

Referring to Scenario G—a large gas plant with no renewables, which got SROI’s highest economic ratings—she added, “Why put all of our eggs in that one [gas] basket?”

She also said SROI’s energy demand projections are outdated.

A utility spokeswoman said it used demand projections by Black & Veatch, a company specializing in utility market projections, and those numbers “took into account [previous industry research about the] reasonable energy efficiency savings that a community with our load makeup can expect.”

The 2008 industry research, however, does not encompass the sharp, 30- to 66-percent cuts in energy use the CEP envisions.

“I don’t want us to build a big plant that we only need for 10 years,” Ms. Hallacy explained. “Once it’s built, we are struck with it.”

Eyeing an Endorsement

Several residents and officials involved in Holland’s big, double-barreled look at its energy future support Ms. Hallacy’s criticism of HBPW’s outreach efforts and the difficulty of understanding SROI without a narrative attached.

But they also said HBPW’s ongoing public education program about its generation choices—a collection of almost a dozen meetings, known as P21 sessions, that began last September, and its SROI presentation—were conducted in good faith. They agreed that with SROI-crunched numbers for the various scenarios, the city council will likely endorse the overall strategy.

“I think the process is going pretty well,” said City Councilman Wayne Klomparens. “Last fall I was saying we really got to get going on this. But since then, our usage has gone down, the battery plant we anticipated hasn’t developed yet, and [the SROI report indicates that] we can buy power off the grid and save money.

“So there’s no real super need to have this all done in the next year,” he said. “I would caution: Let’s spend some time, do it right, but don’t let it die on the shelf.”

Don Treizenberg, who co-chairs the sustainability committee, echoed Mr. Klomparens’ optimism and said he’s encouraged by “thousands” of conversations he’s had over the past four years with other Holland residents as a member of a community outreach group dedicated to sparking community interest and support for a cleaner, more efficient energy future.

“We make it our business to talk to people on porches, at meetings, all kinds of places,” he said. “No one has offered any objection to the energy plan, except for a note of caution about a financial, due-diligence analysis. We now have that, and there is no disagreement.

“It’s clear from SROI that a full portfolio of renewables does not have a significant impact on rates,” he said, noting that the analysis pegged the electric rate for the renewables-friendly Scenario B at about a half-cent higher per kilowatt-hour than Scenario G’s all-gas option.

He also said that, given polling data that shows strong support for the state’s 25 x 25 renewable energy initiative, “we don’t need to debate whether renewable energy needs to play a major role. I believe BPW is on board.”

Mr. Treizenberg said that four of the five elements of Scenario B are now in play: natural gas-fired generation, renewables, waste-heat-driven district heating for some homes and businesses, and gas generation providing heat and power to the city’s industrial park.

He also said there was one thing SROI did not consider, and which some say the CEP is not specific enough about: how best to finance an aggressive efficiency retrofit program for Holland’s homes and commercial businesses.

“I would certainly encourage council to do a return on investment study on that,” he said. “It would turn out extremely positively. Every study ever done shows energy efficiency is the cheapest energy there is.”

Jim Dulzo is the Michigan Land Use Institute’s senior energy policy specialist. Reach him at jimdulzo@mlui.org. MLUI is a member of the Clean Energy Now coalition.

 

1 Comment

1552 days ago, 5:39pm | by Kathie spitzley | Report Comment

Thanks for this report. My husband and I will attend the session tomorrow night and plan to speak. We had an energy audit done after the very first meeting and have a more comfortable and less costly living space. We hope things will continue to improve for our city. We have such potential!

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