Vicinity Energy receives Michigan grant for electric boiler | Crain's Grand Rapids Business

Nov 06, 2024

A $2 million state grant to support the production of “e-steam” from electric-powered boilers at downtown Grand Rapids’ steam utility will help offset potential increases to customer rates, utility officials say.

The Michigan Public Service Commission earlier this month awarded the funding to Vicinity Energy, which is in the process of replacing natural gas-powered boilers with electric models at its downtown Grand Rapids facility as part of the company’s broader sustainability plan.

The utility also is in talks with the city of Grand Rapids to at least partially power the electric boilers with electricity generated from a solar project proposed at the former Butterworth landfill site.

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The $2 million in clean energy funding represents significant support for Vicinity’s ongoing project, and could reduce the amount that downtown steam customers pay under the electrification plan, said Jesse Douglas, Vicinity’s vice president and general manager who oversees the downtown steam plant.

“This grant is substantially going to pay for the installation of that electric boiler” that’s currently being installed downtown, Douglas said, adding that the funding represents roughly half or more of the installation costs. “What that ultimately means is we’re going to be able to deliver a first-in-the-nation kind of project with very limited impact to the actual cost of operations for our customers.”

Outside of grant funding, Vicinity aims to offset the cost of the electric boilers through a voluntary program in which customers could choose to pay a premium for clean energy. The process works similarly to the way Michigan electric utilities offer voluntary programs for customers to buy green energy.

Vicinity’s dozens of steam customers in Grand Rapids include hospitals, government buildings, entertainment venues and large commercial and residential buildings. The facility provides heat to roughly 120 downtown buildings spanning 10 million square feet of space.

Douglas said the ability to provide “e-steam” at a cheaper cost to customers who may have their own sustainability targets is a “huge win for the local community,” adding that it also gives commercial real estate a “competitive advantage”

Douglas said the goal is to have the new 22-foot electric boiler online before the end of next year.

The $2 million grant was part of the Michigan Renewable Energy and Electrification Infrastructure Enhancement and Development program created under a new state renewable energy law from 2023. The competitive grant program is open to businesses, nonprofits and local and tribal governments pursuing renewable energy and electrification infrastructure projects.

Total grants amounted to $20.8 million following requests of more than $147 million across Michigan.

Other West Michigan recipients include nearly $1.3 million to the Grand Rapids Boys and Girls Clubs for an electrification and microgrid project, $1.3 million for the Kalamazoo Nature Center’s sustainable mobility hub, and $600,000 for a solar project at Pioneer Resources in Muskegon.

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