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DTE Energy outlines plan to retire coal-fired generation, invest in wind power

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Essential Energy Insights - January 2021


DTE Energy outlines plan to retire coal-fired generation, invest in wind power

DTE Energy Co. executives on April 24 outlined the company's plan to cut CO2 emissions by 32% by 2023 through coal-fired generation retirements and a $2 billion investment in renewables, mainly wind.

During DTE's first-quarter earnings call, Chairman and CEO Gerry Anderson said that in 2017, the utility holding company aimed for an 80% CO2 reduction by 2050. An integrated resource plan filed March 29, however, calls for accelerating by 10 years, with new targets of a 50% reduction of CO2 by 2030 and an 80% cut by 2040.

DTE said that at the end of 2018, coal represented 66% of its generation mix. Management now expects coal-fired generation to represent 45% of its generation mix in 2023 and 30% by 2030. "DTE will retire coal plants earlier and remove all coal from its generation fleet by 2040," Anderson said.

The plan calls for the retirement of more than 6,000 MW of coal-fired generation. DTE said its River Rouge, St Clair and Trenton Channel facilities will be retired by 2022, its Belle River facility by 2030 and the 3,086-MW Monroe facility on the bank of Lake Erie by 2040.

Quadrupling renewables by 2040

DTE plans to invest $2 billion in renewables by 2024, "doubling the company's renewable energy production over the next five years," Anderson said. In 2018, renewables made up 10% of DTE's generation mix. According to the integrated resource plan, the company targets renewables at 17% of the generation mix by 2023 and between 25% and 30% by 2030. DTE said it is hoping to see "a quadrupling of renewables by 2040," enabling it to reach its 80% CO2 reduction goal.

A key part of the plan is increasing what it calls "voluntary renewables" by 1,400 MW by 2030. DTE wants to build and sell renewable contracts at terms of five years or less to individual customers such as corporate and industrial entities. The supply contracts can be renewed after five years, but if they are not, the power will revert into rate base, with returns negotiated, Anderson said.

DTE has already announced it is partnering with Ford Motor Co., General Motors Co. and the University of Michigan in voluntary renewable programs.

In February, GM announced an agreement with DTE for 300,000 MWh of wind energy. GM said the deal will help it meet 100% of the power needs of its global technical center in Warren, Mich., and its operations at the Renaissance Center in Detroit.

Earlier in April, the University of Michigan committed to buying 200,000 MW of renewable energy, estimated at half of its total purchased energy for the university's Ann Arbor campus, from DTE starting in 2021.

New wind farm

DTE brought online its 161.3-MW Pine River Wind Park in Gratiot and Isabelle counties in central Michigan on March 8, which the company describes as the largest operating wind project in Michigan. The project was developed, built and transferred to DTE by Invenergy Renewables LLC, which has developed two other wind projects for DTE.

With the Pine River facility, there are now 14 wind parks in DTE's Michigan service territory, of which it owns eight and third parties own six.

DTE executives said April 24 that they believe that, at least in the near term, the relatively low cost of wind generation is attracting customers and that wind generation's "life cycle" is now on par with natural gas generation. Nevertheless, DTE also owns 31 solar projects in Michigan. Anderson said that while wind is the most cost-effective renewable today, he anticipates a shift toward more solar generation in the 2020-to-2023 time frame.

Jeffrey Ryser is a reporter for S&P Global Platts. S&P Global Platts and S&P Global Market Intelligence are owned by S&P Global Inc.