HOLLAND — Holland and Zeeland’s electric utilities are shifting their energy portfolios toward more solar energy with 20-year contracts to buy power from two large solar projects.
The Holland Board of Public Works and Zeeland Board of Public Works are joining about a dozen other members of the Michigan Public Power Agency to purchase 50 megawatts of a 100-megawatt solar project in Hart and 25 megawatts of a 125-megawatt solar project in Calhoun County.
Once the two solar facilities are operating, they will supply 4-5 percent of Holland and Zeeland’s electric power, according to projections.
The Hart project is being built by CMS Enterprises, a subsidiary of Consumers Energy, and is expected to begin supplying power in 2023.
Holland’s share of the Hart project will be 11.7 megawatts of installed capacity, and Zeeland’s will be 5.6 megawatts.
Of Savion’s 125-megawatt array in Calhoun County’s Sheridan Township set to begin commercial operations in 2022, Holland will buy 6 megawatts and Zeeland 2.9.
The two projects represent a shift toward solar in both renewable energy portfolios, as the price of solar energy has become competitive and more utility-scale projects are being built in Michigan.
The two utilities started receiving their first electricity from solar contracts in December when the first phase of Assembly Solar, the largest solar farm in the state, started operations.
Phase II of Assembly Solar and the Invenergy solar project are also expected to begin commercial operation soon, supplying HBPW with a total of 12 megawatts between the three solar agreements.
Adding the Hart and Calhoun County facilities, Holland will have a total of 30 megawatts of solar capacity by 2024, estimated to supply about 5.5 percent of retail electricity sales for HBPW.
Holland and Zeeland’s solar purchases are being negotiated through the Michigan Public Power Agency, a joint action agency that allows publicly owned utilities to combine their buying power to achieve economies of scale in deals with power producers.
is “layering in” more renewable energy into its portfolio, according to Joel Davenport, operations manager for HBPW.
A decade ago, when HBPW was first entering the renewable market, landfill gas was the most competitively priced renewable resource.HBPW invested in several contracts for landfill gas thatsupply about 5 percent of its electric retail sales.
Today, those contracts are no longer competitive, while solar prices have become more attractive. Purchasing 20-year fixed-price contracts with the two solar farms allows the utility to offer stable, predictable rates, Davenport said.
But the city is also cautious not to invest too much into one resource as technology continues to develop and prices will change.
“Our energy risk management policy is focused on rate stability: how can we assure low, competitive rates that are also stable for our customers,” Davenport said. “Layering in these longer-term agreements helps with the stability.”
Why doesn’t the city purchase more solar?
Davenport said the city has to look at its load curve — in other words, the pattern of how demand for power changes over the course of the days and months — and find sources that will provide enough power to “fit” the curve.
The right amount of solar will help meet peak hours for demand.
“Anything coming from a solar facility is going to tend to come in during the summer, daylight hours, which, during the day, that’s going to be when we have the highest demand, and that’s true of most utilities,” Davenport said.
But if the utility buys too much solar, it might end up with extra power and be forced to sell power back to the grid, where it will be dependent on fluctuating prices and possibly lose money.
Wind is the largest source (10 percent) of renewable power for HBPW.
One of the HBPW’s wind contracts, for 15 megawatts of capacity at Wildcat Wind Farm in Tipton County, Ind., expires at the end of 2022.
If the contract is renewed, once the Hart and Oceana County solar facilities start supplying power, HBPW will reach 20 percent renewable sourcing for its electricity. If the contract with Wildcat is not renewed, HBPW will be at 15 percent, with the solar deal.
Michigan law required utilities to source at least 15 percent of their power from renewable sources by the year 2021.
By 2023, with the new solar projects, ZBPW expects to be sourcing more than 25 percent of its electric power from renewables, according to electric power supply and market operations manager Bob Mulder.
Solar energy will make up 11.2 percent of ZBPW’s energy portfolio in 2023 and 13.5 percent in 2024, when both solar projects come online.
Another renewable source for ZBPW is the Autumn Hills landfill in Zeeland Township. Energy generated from methane gas produced by the landfill is expected to supply about 7 percent of ZBPW’s electricity in 2023 and 3.4 percent in 2024.
Zeeland’s own windmill pilot project was ended in 2019, however, contracts for wind power generated elsewhere make up just under 10 percent of the utility’s energy.
Mulder said Zeeland doesn’t have a specific renewables goal, other than complying with the state-mandated minimums for renewable energy, however, it is pursuing solar projects.
“The numbers speak for themselves,” Mulder said. “We’re constantly looking for opportunities that are a good fit for us, being mindful of the renewable attributes but also ensuring price affordability.”
HBPW’s elective renewable energy program, where customers can opt to pay for more of their energy to come from renewables, has seen “massive growth.”
HBPW and Holland have joined the program themselves — meaning city facilities are powered by electricity from renewables — and the total number of customers participating in the program increased from 44 last year to 384.
Davenport said demand for the elective renewable energy isn’t reaching a point where it would eclipse HBPW’s available renewable energy credits, but customer demand is something the utility continues to watch.