Many states have had great early success in cutting their carbon emissions since enacting ambitious net-zero targets at the start of the 2020s. The declines occurred thanks mostly to the switch from coal to natural gas, though heavy investments in solar, driven by Biden-era tax credits, also played a role.
Today, those states are now grappling with rising demand, rising prices, and the Trump administration’s hostility to renewable development. This is necessitating a fresh look at the climate goals set in a much different economic and political time.
Passed and signed into law at the end of 2023, Michigan’s Clean Energy Future Plan mandates 100% clean energy by 2040. This aggressive timeline in the face of increasing load demand and rising costs now risks energy reliability and economic repercussions in a state whose energy-intensive automotive manufacturing industry makes up two-fifths of the state’s GDP.
By switching from coal to gas generation, Michigan has cut carbon emissions by two-thirds since 2005. This rate was faster (1.6% per year) than across the country as a whole (1.2% per year). Cool summers increase residential efficiency, lowering the state’s per capita energy consumption to 9% below the national average. Michigan’s total per capita energy spending is 11% below the national average.
Michigan is the country’s eleventh-largest electricity generator and exports surplus power to neighboring states. Fossil fuels accounted for 67% of in-state generation in 2023, and the proportion had decreased only slightly from 70% in 2005. Coal-fired generation has been cut by two-thirds, mostly replaced by gas, which has increased fourfold. Non-fossil generation comes mostly from nuclear, but the share from wind and solar has grown fast. Nuclear generation has fallen in recent years following the shutdown of the Palisades nuclear power plant for decommissioning in 2022. But plans to re-open Palisades are at an advanced stage. The facility has received new fuel assemblies, and the main turbine generator and cooling systems are being refurbished. Reopening the Palisades nuclear power plant, targeted for 2026, promises 800MW of new, carbon-free firm generation.
Despite these positive developments, Michigan faces a looming supply-demand collision. As demand grows through data center development and policy-driven electrification efforts for EVs and heat pumps, firm supply must keep pace with the growth. Advocates of closing firm and efficient natural gas generation in the face of rising demand are ignoring the looming economic and climate ramifications.
Policies that accelerate reductions in firm generation without replacements make energy more expensive, threatening the core manufacturing base of the state. This is neither economically nor politically wise. Driving jobs from the state to areas with more affordable energy is a recipe for disaster for the climate and for the economy.
Fortunately, there is an off-ramp. The Clean Energy Plan offers a mechanism to delay closures of needed generation if it is required to meet demand. Michigan can take this offramp while continuing to reduce carbon emissions through coal-to-gas switching and accelerating renewable development. To ignore this opportunity risks political blowback that only worsens the likelihood of reducing emissions.
