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A new contract between Kalamazoo, Michigan, and utility Consumers Energy signals a change in direction for the city’s clean energy strategy as it seeks to become carbon neutral by 2040.
Solar was seen as a pillar of the city’s plans when it declared a climate emergency in 2019 and set a goal of zeroing out carbon emissions by 2040. After spending years exploring its options, though, the Michigan city is tempering a vision for rooftop solar in favor of large, more distant solar projects built and owned by the utility. It’s not alone either, with Grand Rapids, Milwaukee, Muskegon and other cities taking a similar approach.
“Folks want to see solar panels on parking lots and buildings, but there’s no way as a city we can accomplish our net-zero buildings just putting solar panels on a roof,” said Justin Gish, Kalamazoo’s sustainability planner. “Working with the utility seemed to make the most sense.”
Initially there was skepticism, Gish said — “environmentalists tend to not trust utilities and large corporate entities” — but the math just didn’t work out for going it alone with rooftop solar.
The city’s largest power user, the wastewater treatment pumping station, has a roof of only 225 square feet. Kalamazoo’s largest city-owned roof, at the public service station, is 26,000 square feet. Spending an estimated $750,000 to cover that with solar would only provide 14% of the power the city uses annually — a financial “non-starter,” he said.
So the city decided to partner with Consumers Energy, joining a solar subscription program wherein Kalamazoo will tell Consumers how much solar energy it wants, starting in 2028, and the utility will use funds from its subscription fee to construct new solar farms, like a 250 MW project Consumers is building in Muskegon.
Under the 20-year contract, Kalamazoo will pay a set rate of 15.8 cents per kWh — 6.4 cents more than what it currently pays — for 43 million kWh of solar power per year. If electricity market rates rise, the city will save money, and Kalamazoo receives Renewable Energy Credits (RECs) to help meet its energy goals.
The subscription is expected to eliminate about 80% of Kalamazoo’s emissions from electricity, Gish said. The electricity used to power streetlights and traffic signals couldn’t be covered since it is not metered. As the city acquires more electric vehicles — it currently has two — electricity demand may increase, but city leaders hope to offset any increases by improving energy efficiency of city buildings.
Consumers Energy spokesperson Matt Johnson said the company relies “in part” on funds from customers specifically to build solar, and considers it a better deal for cities than building it themselves, “which would be more costly for them, and they have to do their own maintenance.”
“We can do it in a more cost-effective way, we maintain it, they’re helping us fund it and do it in the right way, and those benefits get passed on to arguably everybody,” Johnson said.
Grand Rapids, Michigan, joined the subscription program at the same time as Kalamazoo. Corporate customers including 7-Eleven, Walmart and General Motors are part of the same Consumers Energy solar subscription program, as is the state of Michigan.
“There’s a growing movement of cities trying to figure out solar — ‘Yes we want to do this, it could save us money over time, but the cost is prohibitive,’” said John Farrell, co-director of the Institute for Local Self-Reliance.
Until the Inflation Reduction Act, cities couldn’t directly access federal tax credits. The direct-pay incentives under the IRA have simplified financing, Farrell said, but cities still face other financial and logistical barriers, such as whether they have sufficient rooftop space.
Advocates acknowledge deals with utilities may be the most practical way for budget-strapped cities to move the needle on clean energy, but they emphasize that cities should also strive to develop their own solar, and question whether utilities should charge more for clean power that is increasingly a cheaper option than fossil fuels.
“Our position is rooftop and distributed generation is best — it’s best for the customers, in this case the cities; it’s best for the grid, because you’re putting those resources directly on the grid where it’s needed most; and it’s best for the planet because it can deploy a lot faster,” said John Delurey, Midwest deputy director of the advocacy group Vote Solar. “I believe customers in general and perhaps cities in particular should exhaust all resources and opportunities for distributed generation before they start to explore utility-scale resources. It’s the lowest hanging fruit and very likely to provide the most bang for their buck.”
Utility-scale solar is more cost-effective per kilowatt, but Delurey notes that when a public building is large enough for solar, “you are putting that generation directly on load, you’re consuming onsite. Anything that is concurrent consumption or paired with a battery, you are getting the full retail value of that energy. That is a feature you can’t really beat no matter how good the contract is with some utility-scale projects that are farther away.”
Delurey also noted that Michigan law mandates all energy be from clean sources by 2040; and 50% by 2030. That means Consumers needs to be building or buying renewable power, whether or not customers pay extra for it.
“So there are diminishing returns [to a subscription deal] at that point,” Delurey said. “You better be getting a price benefit, because the power on their grid would be clean anyways.”
“Some folks are asking ‘Why do anything now? Just wait until Consumers cleans up the grid,’” Gish acknowledged. “But our purchase shows we have skin in the game.”
In 2009, Milwaukee adopted a goal of powering 25% of city operations — excluding waterworks — with solar by 2025. The city’s Climate and Equity Plan adopted in 2023 also enshrined that goal.
For a decade, the city has been battling We Energies over Milwaukee’s plan to install rooftop solar on City Hall and other buildings through a third-party owner, Eagle Point Solar. The city sought the arrangement — common in many states — to tap federal tax incentives that a nonprofit public entity couldn’t reap. But We Energies argued that third party ownership would mean Eagle Point would be acting as a utility and infringing on We Energies’ territory. A lawsuit over Milwaukee’s plans with Eagle Point is still pending.
In 2018, We Energies launched a pilot solar program in Milwaukee known by critics as “rent a roof,” in which the utility leased rooftop space for its own solar arrays. Advocates and Milwaukee officials opposed the program, arguing that it encouraged the utility to suppress the private market or publicly-owned solar. In 2023, the state Public Service Commission denied the utility’s request to expand the program.
Wisconsin Citizens Utility Board opposed the rent-a-roof arrangement since it passed costs they viewed as unfair on to ratepayers. But Wisconsin CUB executive director Tom Content said the city’s current partnership with We Energies is different, since it is just the city, not ratepayers, footing the cost for solar that helps the city meet its goals.
Milwaukee is paying about $84,000 extra per year for We Energies to build solar farms on a city landfill near the airport and outside the city limits in the town of Caledonia. The deal includes a requirement that We Energies hire underemployed or unemployed Milwaukee residents.
The Caledonia project is nearly complete, and will provide over 11 million kWh of energy annually, “enough to make 57 municipal police stations, fire stations, and health clinics 100% renewable electricity,” said Milwaukee Environmental Collaboration Office director Erick Shambarger.
The landfill project is slated to break ground in 2025. The two arrays will total 11 MW and provide enough power for 83 city buildings, including City Hall – where Milwaukee had hoped to do the rooftop array with Eagle Point.
Meanwhile Milwaukee is building its own rooftop solar on the Martin Luther King Jr. library and later other public buildings, and Shambarger said they will apply for direct pay tax credits made possible by the Inflation Reduction Act — basically eliminating the need for a third-party agreement.
“Utility-scale is the complement to rooftop,” said Shambarger. “They own it and maintain it, we get the RECs. It worked out pretty well. If you think about it from a big picture standpoint, to now have the utility offer a big customer like the city an option to source their power from renewable energy — that didn’t exist five years ago. If you were a big customer in Wisconsin five years ago, you really had no option except for buying RECs from who knows where. We worked hard with them to make sure we could see our renewable energy being built.”
We Energies already owns a smaller 2.25 MW solar farm on the same landfill, under a similar arrangement. Building solar on the landfill is less efficient than other types of land, since special mounting is needed to avoid puncturing the landfill’s clay cap, and the panels can’t turn to follow the sun. But Shambarger said the sacrifice is worth it to have solar within the city limits, on land useful for little else.
“We do think it’s important to have some of this where people can see it and understand it,” he said. “We also have the workforce requirements, it’s nice to have it close to home for our local workers.”
Madison is also pursuing a mix of city-owned distributed solar and utility-scale partnerships.
On Earth Day 2024, Madison announced it has installed 2 MW of solar on 38 city rooftops. But a utility-scale solar partnership with utility MGE is also crucial to the goal of 100% clean energy for city operations by 2030. Through MGE’s Renewable Energy Rider program, Madison helped pay for the 8 MW Hermsdorf Solar Fields on a city landfill, with 5 MW devoted to city operations and 3 MW devoted to the school district. The 53-acre project went online in 2022.
Farrell said such “all of the above” approaches are ideal.
“The lesson we’ve seen generally is the more any entity can directly own the solar project, the more financial benefit you’ll get,” he said. “Ownership comes with privileges, and with risks.
“Energy is in addition to a lot of other challenging issues that cities have to work on. The gold standard is solar on a couple public buildings with battery storage, so these are resiliency places if the grid goes down.”
A solar-powered microgrid project backed with funding from the Biden administration aims to reduce energy burdens and provide backup power to a tiny northern Minnesota tribal community.
The Pine Point Resilience Hub would serve an elementary school and community center in Pine Point, an Anishinaabe village of about 330 people on the White Earth Reservation.
In June, the project was selected to receive $1.75 million from the U.S. Department of Energy’s Energy Storage for Social Equity (ES4SE) Program, which helps underserved and frontline communities leverage energy storage to make electricity more affordable and reliable. It’s part of a slew of Biden administration funding related to grid resilience and energy equity that has spurred several tribal microgrid projects across the country.
The developers, locally owned 8th Fire Solar and San Francisco-based 10Power, hope to finish the project next year, and have also secured funding from Minnesota’s Solar for Schools program and foundation grants but said they still need to raise about $1 million. They’re also counting on receiving about $1.5 million in federal tax credits, which face an uncertain future with the incoming Trump administration.
“The idea of the microgrid is to help with infrastructure,” said Gwe Gasco, a member of the White Earth Nation and the program coordinator with 8th Fire Solar, a thermal solar company based on the reservation.
Tribal communities were largely bypassed during the massive, federally funded push under the Rural Electrification Act of 1936 to bring electricity to remote rural areas of the country. As a result, grid infrastructure on many reservations remains insufficient to this day, with an estimated 1 in 7 Native American households on reservations lacking electricity connections, and many more contending with unreliable service.
On top of higher-than-average electric reliability issues, tribal communities also generally pay higher rates for electricity and face higher energy burdens due to poverty and substandard housing.
On the White Earth Reservation, these challenges are most pronounced in Pine Point, where one-third of residents live in poverty. Gasco said the area is among the first to suffer from outages, with eleven occurring over the last five years, according to the Itasca-Mantrap Electric Cooperative that serves the area.
The Pine Point Resilience Hub project will build on an existing 21-kilowatt solar array, adding another 500 kilowatts of solar capacity along with a 2.76 megawatt-hour battery storage system, enough to provide about 12 hours worth of backup power for residents to be able to charge cell phones, power medical equipment, or stay warm in the event of a power outage.
Gasco said the microgrid could be especially important in the winter, given the area’s “brutally cold” weather and reliance on electric heat. They also hope it will reduce utility costs, though they are still negotiating with the local electric co-op on rates for power the system sends and receives from the utility’s grid. Itasca-Mantrap President and CEO Christine Fox said it doesn’t set net metering rates, which are determined by its electricity supplier.
The project developers hope to qualify for additional federal tax credits by using equipment largely produced in the U.S., including Minnesota-built Heliene solar panels, inverters made in Massachusetts, and Ohio-produced solar racks.
The developers have partnered with the Pine Point School District, which plans to incorporate the microgrid into an Ojibwe-language curriculum on renewable energy. A monitoring interface will allow students to see real-time data in the classroom.
“It’s powerful to me that this (project) is at a school where we’re hoping to inspire the next generation of kids,” said Sandra Kwak, CEO and founder of 10Power, a for-profit company that specializes in developing renewable energy projects in tribal communities.
Corey Orehek, senior business developer for Ziegler Energy Solutions, which has been hired to do the installation, said they plan to work with a local community college to train students for solar jobs.
“One of the things that we want to drive in this is workforce development,” Orehek said. “We want to leave something that’s not only a project that’ll last 30 years but provide the training and experience for community members to either start their own energy companies or become contractors in the clean energy workforce.”
The resilience hub is the second such project announced by a Minnesota tribe in just recent months. The Red Lake Nation received $3.15 million from the U.S. Department of Energy’s Local Government Energy Program in late September for a behind-the-meter microgrid project at a secondary school.
The Shakopee Mdewakanton Sioux Community is also working with Minnesota Valley Electric Cooperative to build a $9 million microgrid with U.S. Department of Energy funding. The electric cooperative will install a 4 megawatt-hour energy storage system and add a 1 megawatt solar system at the reservation in suburban Minneapolis.
It’s unclear whether federal funding for such projects will continue in President-elect Trump’s second term, but for now tribal energy advocates see microgrids as a good solution to both lower energy burdens and improve reliability.
“This is a great opportunity to create a success story in terms of leveraging cutting-edge technology, being able to help frontline communities, and for tribes and co-ops to work together,” Kwak said.
OFFSHORE WIND: A coalition of trade unions urges Connecticut, Massachusetts, and Rhode Island to triple their offshore wind procurement targets to help meet climate goals and create jobs. (Inside Climate News)
ALSO: Officials on Nantucket object to the terms of a mitigation agreement proposed by a planned offshore wind farm, saying the offer fails to address the harms the project will cause to the island. (Nantucket Current)
CRYPTO: A New York judge allows a cryptocurrency mining operation to keep running its fossil fuel-fired power plant, saying state regulators failed to justify their decision not to renew the facility’s permit. (WSKG)
HEAT PUMPS: Maine’s decision to incentivize whole home heat pump systems rather than individual rooms has driven a surge in homeowners taking advantage of the rebates. (Portland Press-Herald, subscription)
MICROGRIDS: A renewables-powered community microgrid in the country’s easternmost city is already proving to be a model for other towns along the Maine coast to reduce outages. (Inside Climate News)
SOLAR: Maryland communities attempt to stem the tide of solar development on open land, with Carroll County looking to strengthen its prohibition on solar projects on farmland and Harford County moving to place 1,100 acres of land into agricultural preservation. (Baltimore Sun, subscription)
BATTERIES: A Canadian company plans to open a lithium-ion battery manufacturing facility in New York, creating some 250 jobs. (The Post-Journal)
ELECTRIFICATION: Maine launches a $1 million study to determine the cost and logistics of electrifying four ports to cut diesel emissions from visiting ships. (Portland Press Herald, subscription)
NUCLEAR: New York’s energy authority begins to assess the possibilities for and interest in developing advanced nuclear facilities in the state. (RTO insider, subscription)
INDUSTRY: Decarbonizing the steel industry in states such as Pennsylvania will require enormous amounts of clean energy and deployment of new technologies. (Canary Media)
CLEAN ENERGY: In Vermont, experts and state leaders worry federal funding for clean energy and other environmental priorities could be withdrawn when Donald Trump takes office. (VTDigger)
COMMENTARY:
Correction: The Georgia Environmental Finance Authority recently launched two federally funded energy efficiency programs. An item in Thursday’s digest misstated the organization sponsoring the program.
STORAGE: Kentucky Gov. Andy Beshear announces a subsidiary of Canadian Solar will build a $712 million, 3 GW lithium ion cell battery manufacturing plant — the latest in a wave of battery factories and electric vehicle expansions that together account for more than 16,000 new jobs. (Lexington Herald-Leader)
ELECTRIC VEHICLES: Donald Trump’s plans to repeal a $7,500 electric vehicle tax credit could be a major blow to auto manufacturers who have invested billions in EV and battery factories in Georgia and other Republican-led Southeast states. (Atlanta Journal-Constitution)
OIL & GAS: Entergy proposes a 1,500 MW gas-fired power plant in Louisiana to power a proposed $5 billion-plus data center, as critics question secrecy around the project and its likely effect on rates and carbon emissions. (Floodlight)
WIND: Oklahoma’s wind generation capacity has grown tenfold since 2010 as renewables now generate about 44% of the state’s power, but experts expect the industry’s rapid growth to slow. (Tulsa World)
SOLAR:
UTILITIES:
COAL:
HYDROGEN: West Virginia residents rally against a proposed “blue hydrogen” hub proposed for Appalachia. (Charleston Gazette-Mail)
OVERSIGHT: West Virginia officials anticipate Donald Trump’s selection to lead the U.S. EPA will reverse course on proposed rules to restrict emissions from coal-fired and new gas-fired power plants. (WV News)
CLIMATE:
POLITICS: A Virginia lobbyist wrote the energy chapter of the Heritage Foundation’s Project 2025 playbook, which proposes overhauling the U.S. Department of Energy, repealing clean energy funding sources, boosting oil and gas and streamlining the nuclear approval process. (Virginia Mercury)
WIND: With three coal-fired power plants in Arkansas expected to close by 2030, renewable energy advocates tout the state’s emerging wind industry as a potential replacement. (Arkansas Advocate)
ALSO: Dominion Energy crews begin installing ductwork along Virginia roadways for power lines to the utility’s offshore wind farm. (WVEC)
SOLAR:
OIL & GAS:
STORAGE: Two companies move to assemble a 1 GW virtual power plant in Texas by linking hundreds of thousands of smart thermostats, with plans to eventually add in other customer-owned assets like solar panels, batteries, and electric vehicles. (Canary Media)
ELECTRIC VEHICLES: Austin, Texas’ transit agency shelves 46 electric buses for at least a year because the company that makes them went bankrupt and there aren’t yet enough chargers to keep them running all day. (Austin Monitor)
NUCLEAR:
COAL ASH: U.S. EPA officials say they’re working to address the discovery of nearly 300 tons of coal ash near a North Carolina elementary school. (WCNC)
CARBON CAPTURE: The U.S. Energy Department awards $26 million to a proposed offshore carbon capture and storage facility near Louisiana that’s expected to take emissions from a liquified natural gas export terminal. (The Advocate)
GRID:
POLITICS:
COMMENTARY:
WIND: President-elect Trump’s ambitions to shut down the offshore wind industry would push New York’s climate goals further out of reach, but it remains unclear whether his administration will be able to pull it off. (New York Focus)
ALSO:
CLEAN ENERGY: A Cornell University researcher says New York will need 40 GW of dispatchable power to meet its climate goals, exceeding a NYISO forecast that some groups dismissed as “alarmist.” (Syracuse.com, subscription)
UTILITIES: Facing conditions more familiar to the West Coast, utilities in New Jersey are taking precautions to avoid sparking wildfires amid a persistent drought. (WPVI)
TRANSPORTATION: New York City’s Metropolitan Transportation Authority approves a revamped congestion pricing plan, which still needs federal approval and faces challenges from New Jersey officials. (Bloomberg)
GRID:
TRANSMISSION: A study from Cornell University researchers says making beneficiaries pay for new power lines is consistent with decades of legal precedent. (news release)
HYDROPOWER:
CLIMATE: Portland, Maine’s city council votes to establish a dedicated climate fund for projects to reduce the city’s emissions. (Portland Press Herald)
COMMENTARY: Two scientists say Maryland has an opportunity to become a national leader on reducing emissions during the Trump administration. (Baltimore Sun)
SOLAR: Minnesota officials announce the completion of the first phase of a massive solar project that’s set to replace the retiring Sherco coal plant. (WCCO)
ALSO:
RENEWABLES: Ann Arbor, Michigan, will launch its voter-approved “sustainable energy utility” by assembling an initial 20 MW of demand and financing various renewable energy, storage and efficiency projects. (Canary Media)
PIPELINES: Summit Carbon Solutions reapplies for a carbon pipeline permit in South Dakota with significant reroutes after its initial application was rejected last year. (South Dakota Searchlight)
BATTERIES: A company announces plans for a $547 million battery components plant near St. Louis that would serve energy storage and electric vehicle markets. (FOX 2)
GRID: Ratepayer advocates file a complaint with federal regulators seeking changes to PJM’s capacity market design that they say is causing spiking capacity prices. (Utility Dive)
UTILITIES:
CLIMATE: A firm that helps real estate, insurance and financial companies predict how climate models could result in local impacts develops a tool to measure how resilient and at-risk U.S. cities are to climate change. (Washington Post)
EFFICIENCY: Wisconsin energy efficiency contractors have been promoting an Inflation Reduction Act-funded program that has deployed nearly $75 million to serve the state’s residents. (WUWM)
SOLAR: New Hampshire regulators reject a stakeholder agreement to extend net metering to 2044, a decision that will likely slow solar development in the state and be fatal for larger projects now in the planning stages, advocates say. (Concord Monitor)
ALSO:
CLIMATE: The new version of Maine’s climate plan prioritizes renewable energy, energy efficiency measures, climate adaptation, and environmental justice, but scales back previous goals for electric vehicle adoption. (Portland Press Herald, subscription)
OFFSHORE WIND:
TRANSMISSION:
RENEWABLES: Harvard, MIT, and Massachusetts General Brigham hospital partner to buy up to 1.3 million megawatt-hours of power annually from a Texas solar installation and North Dakota wind facility. (Harvard Magazine)
GEOTHERMAL: A networked geothermal system in Massachusetts is one of a handful of projects nationwide demonstrating the potential of thermal systems to replace traditional gas utility service. (Utility Dive)
FOSSIL FUELS: A former coal plant in Connecticut will soon be demolished as the state moves away from fossil fuel power generation. (Connecticut Public Radio)
COMMENTARY: Energy storage is the “cornerstone of a clean energy grid” and offers important environmental and economic benefits, despite critics’ inflated concerns about upfront costs, say two Northeast clean energy advocates. (CommonWealth Beacon)
HYDROGEN: Federal officials announce the first $22 million for a Midwest hydrogen production hub that could receive up to $1 billion, though it’s unclear whether the incoming Trump administration will support the technology. (E&E News)
NUCLEAR:
ELECTRIC VEHICLES:
DISTRICT ENERGY: Duluth, Minnesota, is studying the potential for a wastewater effluent-powered district energy system to heat downtown buildings. (Smart Cities Dive)
PIPELINES: Federal appeals court judges hear oral arguments in a case brought by a carbon pipeline developer over whether two Iowa counties could set restrictions on the company’s project. (Iowa Capital Dispatch)
CLIMATE: Data centers and AI are threatening U.S. climate goals as more than 200 gas plants are in various stages of development across the country to serve the industry. (Washington Post)
GRID:
SOLAR: Progress continues on a $2.3 million solar installation on the administration building in Iowa’s most populous county. (KCCI)
CLEAN ENERGY: A Michigan Congress member, whose district is the site of a Chinese company’s proposed battery manufacturing plant, cosponsors legislation to prevent Chinese companies from accessing Inflation Reduction Act tax credits. (Solar Power World)
BIOFUELS: A South Dakota board approves $12.6 million in funding support for a $500 million processing plant that’s expected to help meet demand for soy-based biofuels. (South Dakota Searchlight)
Dearborn, Michigan, was at the heart of auto industry innovation during the days of the Model T Ford.
Now clean energy and environmental justice advocates are proposing that the city play a lead role in greening the auto industry, through a transformation of the Dearborn Works steel mill to “green steel” — a steelmaking process powered by hydrogen and renewable energy with drastically lower emissions than a traditional blast furnace.
The blast furnace at Dearborn Works is due for relining in 2027, at an estimated cost of $470 million. Advocates argue that instead of prolonging the blast furnace’s life, its owner, Cleveland Cliffs, should invest another $2 billion dollars and convert the mill to Direct Reduced Iron (DRI) technology powered by green hydrogen (hydrogen produced with renewable energy).
An October report by Dr. Elizabeth Boatman of the firm 5 Lakes Energy examines the economics and logistics of such a conversion, and argues that demand for cleaner steel is likely to grow as auto companies and other global industries seek to lower their greenhouse gas footprints. Starting in 2026, steel importers to the European Union will need to make payments to offset emissions associated with steel production.
Worldwide, the auto industry is the second largest consumer of steel after construction, and “being able to pass on the price of a ‘green steel premium’ to its end consumers, the automotive industry is uniquely positioned to create demand for green steel without having to rely on public subsidies,” the European Union think tank CEPS said in a recent publication.
“This is a great chance for the state to step in now and ensure this conversion happens, instead of waiting another 20 years,” said Boatman. “All the economic indicators suggest clean steel is the steel product of the future, and the best way to future-proof jobs especially in the steel sector and especially for unions.”
Cleveland Cliffs is planning to convert its Middletown, Ohio, steel mill to DRI, tapping a $500 million federal grant for industrial decarbonization under the Bipartisan Infrastructure Law and Inflation Reduction Act.
A DRI furnace does not need to use coke or heat iron ore to 3,000 degrees Fahrenheit to produce pure “pig iron”; the same result is achieved with a different chemical process at much lower temperatures. DRI furnaces can be powered by natural gas or clean hydrogen. Initially, Cleveland Cliffs says, its Middletown mill will run on natural gas, releasing about half the carbon emissions of its current blast furnace. Eventually, the company announced, it could switch to hydrogen.
Along with slashing greenhouse gas emissions, a similar green steel conversion at Dearborn Works would greatly reduce the local air pollution burden facing local residents in the heavily industrial area, which is also home to a Marathon oil refinery, a major rail yard and other polluters.
But it wouldn’t be cheap. Boatman’s report estimated the cost of converting a blast furnace to a DRI furnace and associated electric arc furnaces at $1.57 billion, plus $2.6 billion to build a green hydrogen plant. Utility DTE Energy would need to work with grid operator MISO to add about 2 GW of solar and 2 GW of wind power, plus battery storage, to the grid to power the green hydrogen production.
The conversion would mean closure of the EES Coke plant, which turns coal into coke for the steel mill, on heavily polluted Zug Island in the River Rouge just outside Detroit, five miles from Dearborn. In 2022, the EPA sued the coke plant, a subsidiary of DTE Energy, over Clean Air Act violations.
A recent study by the nonprofit Industrious Labs found that the EES Coke plant could be responsible for up to 57 premature deaths and more than 15,000 asthma attacks. The report also found that more than half the people living within a three-mile radius of both the steel mill and coke plant are low-income, and three-quarters of those living around the coke plant are people of color, as are half those living around the steel mill.
“The total health costs are quite significant,” said Nick Leonard, executive director of the Great Lakes Environmental Law Center, which is representing local residents as intervenors in the EPA lawsuit against the coke plant. “We allow companies to externalize those costs and not account for them. If they were required by some sort of change in policy or regulation to be responsible for those costs, it would certainly make the case they could make this expensive switch” to green steel.
The law center also represented residents in legal proceedings around Dearborn Works’ Clean Air Act violations, including a 2015 consent decree and a 2023 mandate to install a new electrostatic precipitator at a cost of $100 million.
Leonard said local residents “know Cleveland Cliffs poses a risk to their health, and they want solutions. They know there’s a problem, they are frustrated by the lack of will or attention from state and local government.”
Cleveland Cliffs did not respond to a request for comment.
The country’s active steel mills are concentrated in Pennsylvania, Indiana, Ohio and Michigan. Advocates and residents are asking Nippon Steel to consider a green steel conversion at the Gary Works mill in Northwest Indiana, if the global corporation succeeds in acquiring Gary Works owner U.S. Steel. Advocates have also proposed green steel conversions for Pennsylvania mills.
There are factors that make a green steel conversion both more promising and more challenging at Dearborn Works, compared to other locations, Boatman explained.
Dearborn Works has only one blast furnace in operation, meaning a potentially smaller investment than at mills with more furnaces. Michigan has also set aggressive renewable energy goals, which could be furthered by the ambitious renewable energy buildout that would be required to produce enough green hydrogen for the steel mill.
“That’s why we’re asking the state of Michigan and the governor to get all the interested parties to the table to actually talk about this, hopefully commit to it, and do the detailed planning that needs to be done to figure out how much wind, how much solar, how much battery storage does there need to be to get this off the ground,” said Boatman.
Michigan has legal limits on behind-the-meter generation that could make it more difficult to build renewables specifically to power green hydrogen production for a steel mill. Utilities would instead need to produce or procure the renewable energy, and sell it to the steel mill, Boatman explained.
A green steel conversion at Dearborn Works could create a total of about 500 new jobs, Boatman estimates, considering that about 500 jobs would be lost at the closing coke plant but 410 jobs would be created at the hydrogen plant, 550 in new renewables and 170 at the mill itself. The DRI conversion at the Middletown steel mill is expected to create 170 new permanent jobs and 1,200 construction jobs, according to Cleveland Cliffs.
A 2023 analysis by the Ohio River Valley Institute found that at the Mon Valley Works steel mill in Pennsylvania, a DRI conversion would likely preserve more iron- and steel-making jobs than “business as usual,” with 87% of the current jobs expected to exist in 2031, compared to 69% without a change — as U.S. steel production continues to shrink and automate.
“We are seeing a general trend for both iron and [secondary] steel production to move toward the South, to states that aren’t friendly to unions and can produce products at cheaper prices by bypassing unions,” said Boatman. “Michigan obviously has a proud history of being a strong union state, it matters to keep those good union jobs there.”
Labor unions have largely been silent on the concept of green steel conversion. The United Auto Workers union — which represents Dearborn Works employees — and the United Steelworkers did not respond to requests for comment.
The U.S. Department of Energy plans to spend $8 billion on hydrogen hubs, and a potentially lucrative tax credit known as 45V is being finalized for clean hydrogen. Experts and advocates agree that energy-intensive, hard-to-decarbonize industries like steel are where hydrogen could have the most impact. But large-scale production of pure hydrogen for industrial use is still in nascent stages, and little infrastructure has been built or tested for transporting and storing hydrogen.
That is among the reasons, Boatman said, that there’s been reluctance among residents and union leaders to embrace the concept of green steel. Boatman’s report emphasizes that community benefits agreements and community engagement processes are crucial to make sure residents are informed about, benefit from, and have a meaningful voice in any green steel plans.
“Union workers and fence-line community members all want better air quality, lower emissions, who wouldn’t want to go to work knowing you’re safer being there?” she said. “There’s a lot of interest in cleaning up the air. It’s more a question over how that happens. When hydrogen becomes part of the equation, there’s always some concern.”
She noted that hydrogen could potentially be stored in salt caverns in the Detroit area, though extensive study on the feasibility and environmental impacts would be needed. In Mississippi, a startup company Hy Stor Energy is planning to store green hydrogen in salt caverns, ready to generate electricity during times of high demand.
Tax incentives for clean hydrogen could provide major incentives for steel mills. But clean hydrogen proposed projects have been in flux nationwide as the rules for qualifying for 45V tax credits are being hashed out in a lengthy, controversial process; and the change in presidential administration adds even more uncertainty.
“These industries have to be incentivized,” said Roxana Bekemohammadi, founder and executive director of the U.S. Hydrogen Alliance, which advocates for pro-hydrogen policies on the state level. “Europe is creating a mandate — that’s one incentive. We’d love to support any incentives that would allow hydrogen to be leveraged in the steel industry. With state legislation we certainly can incentivize it. It’s a question of how competitive we want to be.”
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