Michigan's DTE Energy Hikes Capital Spending as it Moves from Coal

Researched by Industrial Info Resources (Sugar Land, Texas)--DTE Energy Company (NYSE:DTE) (Detroit, Michigan) is accelerating its move away from coal-fired power generation with an increasingly ambitious schedule of renewable and gas-fired generation. DTE is offering a more detailed map of its long-term plans, such as a series of windfarms across Michigan. Industrial Info is tracking more than $2.4 billion in active DTE projects, more than $1 billion of which is attributed to natural gas-fired generation projects.

Click on the image at right for a graph detailing DTE's active projects by Michigan county.

DTE reported $397 million in net income for first-quarter 2021, a 16.7% increase from the same period last year. The company now expects to spend between $4.13 billion and $4.33 billion in 2021 on capital projects, including $2.38 billion on infrastructure projects for its electric and gas subsidiaries, and $950 million on new electric-generation projects. The company also is planning to spin off its midstream business toward the middle of the year.

DTE's highest-valued project under construction is the estimated $989 million Blue Water Energy Center in East China, Michigan, a natural gas-fired, combined-cycle (NGCC) power station fueled by a pair of combustion turbines and a steam turbine from General Electric (NYSE:GE), with a total output of 1,100 megawatts (MW). If you subscribe to Industrial Info's Power Generation database, click here for project details.

The Blue Water plant will replace three coal-fired power plants surrounding the Detroit area that are set to close by the end of 2022. DTE will begin the years-long process of dismantling and demolishing the plants and removing and decontaminating related ash ponds, which might not fully wrap up until 2031. If you subscribe to Industrial Info's Power Generation database, you can click below for detailed reports on the:

• demolition and ash pond closure at the Saint Clair Power Station in East China, Michigan
• demolition and ash pond closure at the River Rouge Power Station in River Rouge, Michigan
• demolition and ash pond closure at the Trenton Channel Power Station in Trenton, Michigan

DTE already has broadened its renewables footprint substantially this year, with the completion and startup of the 385-MW, two-phase Isabella Windfarm in Weidman, Michigan, and the 72-MW Fairbanks Windfarm expansion in Garden, Michigan, in the state's Upper Peninsula. DTE also is making significant strides on its estimated $350 million Meridian Windfarm in Midland, Michigan, which is designed to generate 225 MW from 70 Vestas turbines. The Meridian projects is projected to wrap up by the end of 2024. Industrial Info's subscription database offers more details on the Isabella, Fairbanks and Meridian projects.

In 2005, coal accounted for 77% of DTE's power generation, while renewable and natural gas sources accounted for only 3%. By the end of 2023, coal's share of the mix is expected to dip to 45%, while natural gas will stand at 18% and renewables at 17%; by the end of 2030, when all but one of its coal-fired plants is expected to close, DTE's output is estimated to be 30% coal, 20-25% natural gas and 25-30% renewables. Nuclear and other sources stay at 20% across all three timeframes.

The most recent wave of COVID-19 infections is hitting Michigan especially hard, with more younger people with a wider variety of strains being admitted to hospitals than at any other time in the pandemic, according to The New York Times. Nonetheless, the prospect of a rebound in retail electricity sales and a spike in demand from the recent winter storms have bolstered DTE.

"So our residential load in the first quarter [of 2021], versus what we would have thought it would have been pre-COVID, was up about 5% to 7%," said Dave Ruud, the chief financial officer of DTE, in a recent earnings-related conference call. "Our commercial and industrial [loads] were back to where we would have expected pre-COVID--maybe between 95% and 100%. So, our residential usage continues to come in marginally better than expected, with more people continuing to work-from-home, and we are seeing that trend continue a little longer than we thought until people go back to work [away from home]."

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.