Utilities on the hunt for thousands of acres for solar development

DTE Energy Co. is in the market for 20,000 to 35,000 acres of southern-facing flat land in Michigan to erect solar arrays over the next 10 to 15 years.

Consumers Energy Co., which generates 40 megawatts of electricity from solar today, has plans to be at 8,000 megawatts of energy from the sun by 2040, requiring anywhere between 40,000 and 56,000 acres of land for solar arrays.

With the cost of solar power more economical than ever, they still require lots and lots of space.

Michigan’s utilities are moving quickly to scoop up the real estate needed to rapidly expand their solar energy generation capabilities amid consumer demand for accelerating a transition away from carbon-emitting coal power plants linked to global climate change.

“We’re securing as much land as we can at this time to help enable that to develop,” DTE Energy CEO Jerry Norcia said in an interview with Crain’s.

The shift away from centralized electricity generation to one that requires vastly more acres to cover with panels facing the sun — and covering what’s below them — is causing the utility companies and solar developers to search for real estate that meets customer demand while balancing the best use of land. It’s an issue policymakers in Lansing have not yet tackled, but energy industry leaders expect they will face it soon as some communities may resist solar panels lining farm fields.

“My expectation is at some point — we haven’t hit it yet here in Michigan — land use is going to be an issue,” Norcia said. “In areas where you have highly productive agricultural land, when you put solar panels over that land, you’ve essentially changed that land use for a long, long time. I think that’s going to be an emerging challenge over time.”

DTE Energy (NYSE: DTE) is currently generating 144 megawatts of electricity from solar and plans to add 1,000 megawatts by the end of 2024 and 4,000 more megawatts within the next decade to 15 years, Norcia said.

Norcia, who is adding the chairman title at DTE next month following the retirement of Executive Chairman Gerry Anderson, said the Detroit-based utility company will detail its solar development plan after 2024 in a new integrated resource plan to be filed by October with the Michigan Public Service Commission.

Jackson-based Consumers Energy is awaiting approval by the commission for its latest integrated resource plan in June, which calls for adding 8,000 megawatts of solar by 2040, company spokeswoman Katie Carey said.

“Pending that gets approved, we’re going to be really out there looking for land, promoting the benefits of solar to people interested in having solar arrays in their community,” Carey said. “If you’re a farmer that wants to get out of the farm business, we’re looking at (farmland).”

‘They can coexist’

Solar power generation requires 5 to 7 acres for every megawatt of electricity.

“We’re trying to target land that isn’t as productive agriculturally,” Norcia told Crain’s. “But eventually you run out of those types of options and you start to take agricultural land out of service. And that’s a policy issue that I think we need to think about as a state.”

Environmental groups that support a rapid expansion of renewable energy use are less worried about land use.

Nick Dodge, communications director for the Michigan League of Conservation Voters, noted there are 10 million acres of agricultural land spread across Michigan’s two peninsulas. “If we’re talking about tens of thousands of acres for solar development, it’s really a drop in the bucket,” he said. “We have plenty of land — they can coexist for sure.”

Brad Neumann, senior extension educator at the Michigan State University Extension, said the coming tide of solar development will put pressures on townships, villages and cities to craft zoning regulations for where panels can be placed. He points to MSU’s development in 2018 of 5,000 parking lot carports with solar panels on top as one creative way to site solar in an urban or suburban setting without taking farmland out of production.

There also may be ways to maintain agricultural use of land with solar panels, much in the way wind turbines dot farm fields along U.S. 127 in Gratiot County, Neumann said. “You could still incorporate livestock into these things where that animal is doing a job for a solar developer and could be eventually sent to market,” Neumann said.

One of the keys to making the economics of solar work is getting arrays close to existing high-voltage power lines and in places where there’s capacity on the electric grid for more power. The challenge, Norcia said, is finding suitable sites in or near urban and suburban areas that aren’t obstructed by trees, other structures and have southern exposure to capture sunlight and convert it to electricity.

DTE is exploring vacant land sites in Detroit to build new solar parks after constructing a two-megawatt solar array at O’Shea Park on city’s west side. In 2019, DTE erected 7,400 solar panels on half of the abandoned 20-acre park near I-96, generating power for about 450 homes.

“We’ve got a few more like that that we want to do,” Norcia said. “But the city obviously always weighs their uses for land, too — they want to see redevelopment, either housing, or commercial or industrial.”

Using fallow land

The increasing use of solar has caused the Michigan Department of Natural Resources to start assessing under-utilized state-owned land for solar arrays.

The state agency has thousands of acres of fallow land within its 4.6 million-acre portfolio that’s not being used for parks, recreation or hunting, said Scott Whitcomb, director of the Office of Public Lands at DNR.

Some of that land includes former mines and brownfield sites once used for industrial purposes that DNR obtained after the previous owners stopped paying taxes and abandoned the land.

In 2020, DNR signed a deal with Troy-based solar developer Circle Power Renewables for a land option to build solar arrays on a former mine tailing site in the Upper Peninsula’s Dickinson County and a former gravel pit south of Grayling in Crawford County. A mine tailing site is land where rock and byproduct waste from mining for iron ore has been deposited.

“The nice thing about these industrial sites is because they were intensely used … there’s a substation right there where you can put the power back on the grid,” Whitcomb said.

Circle Power Renewables is still studying the two Up North sites to see if it’s feasible to get connections to the electric grid before it enters into a long-term lease agreement with the state, said Jordan Roberts, CEO and founder of the company.

Roberts, an Oakland County resident, said he and his partners have years of experience building solar and wind parks in other states.

Circle Power, whose capital investors include El Paso, Texas-based Hunt Cos., is developing a 12-turbine, 60-megawatt wind farm near Houghton in the western U.P. for Marquette-based Upper Peninsula Power Co. (UPPCO).

The solar projects in Dickinson and Crawford counties have engineering obstacles to overcome, but Circle Power is interested in finding a way to put land that would otherwise sit fallow back to productive use, Roberts said.

“Building on former mine tailings, mine ponds or on a gravel pit is more challenging” than building on farmland, Roberts said. “The long pole in the tent is connecting to the grid.”

Posted By: Crain’s Detroit Business on January 1, 2022. For more information, please click here to read the source article.

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