Winning the Alternative Energy Future
The U.S. alternative energy industry has seen enormous growth over the past few years. Although the U.S. has a lot of catching up to do to match to global leaders, states across the country are in the process of aggressively investing in the development of renewable energy resources, spurring economic growth and creating jobs.
The global energy industry and our economy are vastly different today than they were even just a few years ago. We are witnessing a sea change in the way we look at, approach and handle energy.
Climate change, rising oil and gas costs, an ever-growing global demand for fossil fuels and other world events have caused the U.S. to make a decided shift towards investment in domestically available resources and alternative energy.
This is a good sign for a fractured U.S. economy that currently has as many as 30 million people looking for work. While other industries shrink and lose jobs, clean energy grows. According to a November 2010 study by Scotts Contracting, “2011 Outlook for Clean Energy Jobs in the U.S.—Beating the Trend,” more than 2.5 million people will be working for the clean energy industry by 2025. This means that 8 percent of the 30 million unemployed in America would have employment. Yet, this sector has the potential to grow even more.
President Obama is calling for the U.S. to get 80 percent of its power from cleaner sources by 2035 and has passed two federal laws to help spur growth. Under the American Reinvestment and Recovery Act (ARRA) passed in February 2009, the U.S. Treasury Department implemented a program to issue cash grants in lieu of investment tax credits for renewable energy projects. Congress also has extended the 30 percent federal investment tax credit (ITC) to both residential and commercial solar installations until December 31, 2016.
A major growth area for the U.S. alternative industry is solar. Driven by taxpayer subsidies, state renewable energy standards (RES) and federal investment tax credits and cash grants, the U.S. market for utility-scale solar energy farms is expected to double each year between 2010 and 2015, to $8 billion, according to a study released in November 2010 by GreenTech Media, a Cambridge-MA-based research group. In 2010, 274 megawatts (MW) of utility-scale solar plants were expected to be connected to the grid—a 370-percent increase from 2009. Projects are expected to double in 2011 and reach 5,600 MW by 2015.
“You’d be hard pressed to find another industry with a 26 percent job growth rate for 2011,” said Rhone Resch, president of the Solar Energy Industries Association (SEIA) on the industry trade website renewableenergyworld.com
The Solar Foundation released its National Solar Jobs Census 2010 at Solar Power International last October, showing that the solar industry is creating jobs at a much faster rate than the overall U.S. economy, which is expected to grow at around 2 percent this year. The report documents, through 2,500 interviews with employers throughout the country, that over the next 12 months more than half of U.S. solar firms expect to add jobs, while only 2 percent expect to cut workers. Firms are adding employees in all 50 states and the fastest-growing jobs are installers and electricians.
Jobs for installers are growing because installations are growing at very high rates as well. SEIA along with GTM Research recently released a report that shows solar installations in 2010 were up more than 100 percent over 2009. The U.S. Solar Market Insight report compiled data for the first half of 2010 and shows significant growth in the U.S. solar industry.
According to Resch, if the industry meets its goal to install 10 gigawatts (GW) annually by 2015, it would create as many as 220,000 jobs.
The bio-energy sector also holds enormous potential. A report released from the World Economic Forum suggests that the U.S. will be a leader in bio-energy and bio-based products. According to the Biotechnology Industry Organization (BIO), the biorefinery industry currently accounts for 40,000 jobs. Commercialization of second- and third-generation biofuel energy is expected to generate 800,000 new jobs—610,000 indirect and 190,000 direct—by 2011 in the U.S. In addition, the biorefining industry is likely to generate tens of thousands of jobs in the upcoming five years.
President Obama and the U.S Department of Agriculture (USDA) are working together to promote alternative energy development— especially biofuels—in rural areas. In January 2011, the USDA announced support to help private companies create hundreds of jobs building three new refineries producing advanced biofuels. In 2010 alone, the USDA invested more than $1 billion in improving the entire supply chain of biofuels and bio-energy, from research and development, to production and commercialization.
To help states and utilities meet the growing demand for energy in a way that is eco-friendly and reliable, the U.S. is in the process of developing next-generation electric power grids (the “Smart Grid”) using intelligent communications and IT systems.
The Smart Grid introduces and fosters new types of energy efficiency by allowing the operation of the entire electricity system to be dynamically optimized at all times. By using smart-grid technologies and smart- grid practices like demand response, the electricity system can accept and manage the amount of renewable energy that policymakers and the renewable energy industry desire and expect to be developed.
Smart grids are absolutely essential for clean power, but they also are key components to economic growth. According to Lux Research, there will be a $20-billion spending surge in smart technologies in the next 10 years, led by electric utilities and global grid giants. Nearly 75 percent of that money will come from utilities updating their grids to make way for the coming smart grid revolution.
Already the impact of alternative energy growth is visible across the nation. From several large-scale renewable projects, including 150 MW of new solar plants being built across Arizona and the nation’s first renewable energy market hub being established in New Mexico to five new bio-energy projects announced in Kentucky and a $50-million wind turbine production plant in Indiana, Business Facilities has searched across the country to uncover the latest in alternative energy developments. What you will discover in this article is that states across the U.S. are implementing alternative-energy focused policies and programs that are helping to create high-paying (and sustainable) jobs and putting Americans back to work.
INDIANA IS AN ALTERNATIVE ENERGY CROSSROADS
With more than 100 years of advanced manufacturing success and innovation, and a central U.S. location, Indiana has become a national manufacturing hub for solar, wind, electric vehicles and battery technologies. The state’s clean energy strategy so far has been focused on maximizing its potential, including going after a diverse range of clean-energy industries.
“Indiana has not been focused on one sector, we’ve gone after everything,” said Cathy Tripodi, director of energy, Indiana Economic Development Corporation (IEDC). “Indiana has been recognized as one of the most successful states in pursuing various industries. Companies that are past the incubation stage tend to locate here because they can be on both sides of the country in one day. We’ve had tremendous success in the green electric vehicle space and solar and we are a big player in wind.”
Although coal still makes up 95 percent of the state’s electricity supply, Indiana is blessed like many of its Midwestern neighbors with plentiful wind and biomass resources. Even though it lacks a statewide RES, Indiana has been able to attract a substantial amount of investment capital and renewable energy jobs. Indiana has numerous large-scale wind farms in operation and is ranked 6th in the nation in ethanol production.
According to the American Wind Energy Association, Indiana is a leading state in new wind capacity—ranking second in the U.S. in 2009 and first in 2008. Its four wind farms represent some of the largest in the country and amount to an estimated $2.1 billion in capital investment. Big industry players such as Horizon Wind, BP Wind Energy, Duke Energy, EnXco, and Orion Energy have completed their projects in Indiana.
In May 2010, Brevini Wind USA, which produces wind gearboxes for wind turbines, announced it began production at its Yorktown, IN operation in the fourth quarter of 2010 representing an addition 450 jobs at the plant.
Brevini Wind, which is part of the Brevini Group, is investing more than $50 million for the new production plant in Yorktown, enabling the manufacture of a complete range of reliable and innovative main gearboxes for wind turbines ranging from 0.9 MW to 3.5 MW.
The Brevini Group, headquartered in Italy with production facilities in Italy, Germany, China and now the U.S., is not new to the wind power sector. It is an international player with more than 10 years of experience in the industry. Its gearboxes have become a standard for wind turbines worldwide due to their state-of-the-art technology and cost effectiveness. In 2009, Brevini had consolidated revenue of about $420 million and employed 1,700 worldwide doing business in 21 countries with its 11 product lines.
Brevini’s decision to locate in Indiana is a clear symbol of the opportunities Indiana and the U.S. have to offer.
“We are preparing ourselves for a robust market around the corner,” said Renato Brevini, president and founder of Brevini Group. “We have the wind, we have the technology, and, thanks to the support of the State of Indiana, the local authorities and the U.S. Department of Energy, we have the opportunity. That is why I am absolutely confident that the U.S. wind market will be the biggest in the world, and Brevini Wind will be a major player.”
According to IEDC, the state is also home to the largest U.S. solar manufacturing plant in the country. In July 2010, Colorado-based Abound Solar announced it is investing $500 million to take over the empty Getrag plant near Kokomo, IN, creating as many as 850 jobs over the next three years.
Abound Solar received a $400- million federal loan guarantee to open the Tipton County facility and expand an existing plant in Colorado. The company also is eligible for a total of more than $12 million in performance-based tax credits and other training grants from IEDC. In May 2010, Tipton County leaders approved another $13 million in incentives to help lure the company to Indiana.
“State and local representatives from Indiana were particularly instrumental in our efforts to finalize plans for this state-of-the-art facility and create high-paying jobs for Hoosier workers,” said Steve Abely, Abound executive. “We are excited about the opportunity to make America a global driver of renewable, affordable and abundant solar energy.”
In December 2010, Indiana became the first state in the nation to have electric cars in a government fleet. Its ThinkCity cars, which have zero local emissions and an energy efficiency three times that of a traditional combustion- engine car, is essentially a home-grown vehicle. The cars are manufactured in Elkhart, IN and also have Indiana-made EnerDel batteries in them.
Ener1, which makes the EnerDel battery, has three manufacturing facilities statewide. The company manufactures cells, packs, and energy storage systems, serving the automotive electric-drive market, including Toyota Prius. The company also is conceiving and developing energy storage with battery management systems to support and advance the next generation of power grids (smart grids) for their use of digital technology to route and regulate power.
Several business incentives are helping to support clean energy growth in the state. The Net Metering and Interconnection program requires the state’s investor-owned utilities (IOUs) to offer net metering to residential customers and K-12 schools. The Green Power Purchasing program requires all state buildings within Marion County to purchase 10 percent of their electricity by 2010 through Indiana Power and Light’s (IPL) Green Power Option program. The program allows its customers to purchase electricity generated from wind, solar, geothermal, and/or biomass systems. In addition, the state offers tax incentives including a property tax exemption for the entire cost of a renewable energy system and the affiliated equipment that is unique to the system, including equipment for storage and distribution. The exemption is allowed every year that an eligible system is generating energy.
Overall, Indiana has had great success as a clean energy manufacturing state, but according to IEDC’s Cathy Tripodi its power lies in its philosophy. “We have an interesting philosophy here in Indiana where we identify, produce, deploy and embrace our own products,” said Ms. Tripodi. “We have world-renowned colleges, universities and training programs. This all has a multiplying effect on the industry. We don’t have one solution for it, so that’s why we are going after it all. We can’t pick the winners or losers, but we are having success so it’s been worth the effort.”
ARIZONA: STILL THE SOLAR KING
Arizona, a state with more sunshine to harvest than anywhere in North America, is considered a bright spot in the U.S. solar economy.
The state has built huge solar manufacturing plants for some of the biggest names in the industry (First Solar, Inc. and Suntech Power, to name two). Gov. Jan Brewer hopes to continue this expansion into 2011 through tax incentives that have already proven successful.
Through its Bill SB1402, Arizona has clearly indicated intentions to become a hub for solar energy companies. The bill, which took effect on January 1, 2010, has been credited for the creation of approximately 900 jobs and an influx of about $119.2 million in investment.
The federal government also is playing a role in advancing solar. In January, the U.S. Department of Energy (DOE) announced a $967- million loan guarantee for the Agua Caliente Solar Project in Yuma County, Central Arizona.
The Agua Caliente Solar Project consists of a massive 290 MW capacity PV solar-generating facility that is expected to create 400 construction jobs. The project’s sponsor, NRG Solar, estimates that, upon completion, this project will constitute the largest solar electricity facility in the world.
“The DOE Loan Programs Office plays an important role in enabling the deployment of utility-scale renewable energy resources such as Agua Caliente, supporting financing terms commensurate with the long-lived nature of a photovoltaic solar power plant,” said Frank De Rosa, First Solar’s senior vice president of Project Development, North America, in a statement. The project was initiated by First Solar—which will be supplying thin-film solar panels for the project—before it was obtained by NRG Solar.
The company anticipates the project will negate approximately 237,000 metric tons of greenhouse gas emissions per year, equivalent to taking over 40,000 cars off the road annually. In addition, at full capacity, NRG estimates the project will have the potential to provide electricity for approximately 100,000 homes.
Greater Phoenix’s renewable energy industry has grown dramatically since the Renewable Energy Tax Incentive Program was signed into law in 2009. Since then, the program has drawn more than eight companies, 1,350 jobs, and $153.2 million in capital investment.
In January, Power-One Inc., a manufacturer of power inverters for the renewable energy industry, opened its first North American manufacturing facility in Phoenix. The factory eventually will employ 350 people and produce PV and wind-energy inverters.
The facility will reach a capacity of 1 GW of production by the end of the year, with available site capacity reaching 4 GW, the company says. The inverters manufactured at the site will be installed in residential, commercial and utility settings.
Power-One says it decided to move to Phoenix because of the region’s skilled workforce, access to intellectual resources at Arizona State University, and strong support from Gov. Brewer, the Arizona Commerce Authority, the City of Phoenix and the Greater Phoenix Economic Council.
Innovation is the key for a successful clean energy industry. Tucson-based Global Solar is playing a crucial role in helping to advance a high-tech BIPV industry in Arizona. In September 2010, the company rolled out its new flexible solar module, the PowerFLEX BIPV, at its 100,000 square foot facility.
BIPV (building-integrated photovoltaics) are systems that are applied directly to a building, without glass-clad frames or mounting frames, which can be costly. This technology, which is expected to be a leading sector of solar growth in the next few years, is helping Global to remain competitive in a quickly shifting and growing solar industry. NanoMarkets, a VA-based market research firm, projects that worldwide shipments of BPIV products will grow from about $1.9 billion in 2010 to nearly $6 billion in 2014 and more than $16 billion by 2017.
Utilities Are Pitching In
Arizona’s RES, which requires regulated utilities to produce 15 percent of their power from renewable resources by 2025, is prompting utilities to help propel Arizona’s solar industry. In 2011, the RES was increased—calling upon the Tucson Electric Power Corp (TEP) to secure 3 percent of its power from renewables, including solar energy, wind, biogas and other resources.
TEP already is involved in some 150 MW of renewable energy projects, including more than 130 MW of new solar plants by 2013. Six of those projects are expected to go online by the end of 2011.
In January, TEP unveiled a large PV array to provide power for a new program that offers customers a unique opportunity to buy solar energy directly from TEP. The new 1.6 MW tracking array was developed for TEP by Tucson-based SOLON Corp. in the Solar Zone at the University of Arizona’s (UA) Science and Technology Park in southeast Tucson.
“This system is the first of more than a dozen local solar projects that will be built over the next few years to help us take full advantage of southern Arizona’s most abundant renewable energy resource,” said Paul Bonavia, chairman, president and CEO of TEP and its parent company, UniSource Energy.
There are five other solar-power systems planned for development in the Solar Zone, where solar industries and R&D projects are coming together on a single 200-acre site.
One of the planned systems includes a 5 MW solar concentrating thermal plant. The system, being built by Bell Independent Power Corp, with expected completion in 2013, will store heat to keep generators running hours after sundown.
“The UA and Tucson Electric Power have a common interest in leveraging solar technology and innovation for the benefit of the region,” said UA President Robert N. Shelton. “We realize there is a great long-term economic potential for job creation in southern Arizona if we can be at the forefront of creating new, advanced technology for use in the solar sector.”
Maricopa County has been experiencing regionally significant bio-energy industry growth. In August 2010, Pinal Power, LLC, announced its plans to construct a facility that will generate 30 MW of electric power fueled entirely by landscape and agricultural waste.
The project represents $92 million in capital investment; 120 construction jobs during 2011 and 2012; 20-25 workers on site at full build-out; and the creation of up to 100 or more induced jobs due to the need for fuels delivery, maintenance and other spinoff activities. The project is expected to be fully operational in 2013.
According to Bob Buckingham, leader of the project’s development team, Western Bio-Energy Inc., the facility will be located to the west of the existing Pinal Energy’s ethanol plant, Arizona’s first ethanol plant creating a ‘Renewable Energy Zone’.
“Maricopa’s central location is perfect for transportation logistics, there was ample land available for our needs and co-locating with Pinal Energy’s ethanol plant made it a home run,” said Mr. Buckingham.
Pinal Energy’s ethanol plant, which began production in August 2007, produces 50 million gallons from roughly 18 million bushels of corn or milo annually. The fuel-grade ethanol is used in blending with gasoline components to produce E10, a 10-percent ethanol blend. The ethanol also is used for E85, a clean-burning blend of 85 percent ethanol and 15 percent gasoline for use in flex-fuel vehicles. It currently provides 45 jobs for the Maricopa area.
Bio-Energy Inc. has worked on more than 20 similar projects since the early 1980s. The fuel source for the facility is truly green and will consist of landscape waste that currently is delivered to local landfills and farm crop agricultural waste high in BTU’s (British Thermal Units) from surrounding Pinal County areas. Local residents also will be able to visit the facility, dropping off green waste for free instead of paying a fee to dispose of material at area landfills.
“This type of development can lead the way for other industries to consider Maricopa for their operations,” said Danielle Casey, economic development director, City of Maricopa. “The location of this site is ideal for additional industrial developments.”
FLORIDA SHINES ON BIOFUEL AND SOLAR ENERGY
These days everyone is talking about going green. In Florida, state and local leaders are making it happen. According to the Pew Charitable Trusts, Florida is a leader in establishing a green-energy economy. A recent report shows the state added more than 31,000 clean-energy jobs from 1998 to 2007, ranking it among the top 10 states. Florida clean-energy jobs grew at a rate of 7.9 percent, while nationally jobs only grew by 3.7 percent.
Although its solar industry certainly can’t compare to Arizona’s and the state has yet to pass an aggressive RPS (Renewable Portfolio Standard)—some incentives are helping the industry tap into the state’s vast economic potential.
In 2010, Florida launched the Clean Energy Investment Program, which will help the state increase investment opportunities in renewable energy and energy-efficiency technologies. The $36-million program provides funding for companies to upgrade their energy systems.
The Clean Energy Investment Program is a direct investment initiative that will provide qualifying Florida businesses with funding primarily for three uses:
• Facility and equipment improvement with energy efficient products and materials
• Acquisition or demonstration of renewable energy products for use in their operations
• Improvement of existing production, manufacturing, assembly or distribution processes to increase energy efficiency.
“The state program will fund projects and companies that, in turn, will provide returns that can fuel additional clean-energy investments in Florida businesses,” said Jennifer Dunham of Florida First Partners, manager of the Florida Opportunity Fund. The state is currently working to identify companies and projects that would be eligible to participate.
Utilities also are playing their part in Florida’s renewable energy transformation. In January 2011, Florida Power and Light Company (FPL) announced its commissioning of its Martin Next Generation Solar Energy Center, the world’s first solar hybrid power plant. Over the past two years, construction of the Martin County plant employed 1,000 people, and the plant’s reduction in fossil fuel consumption will save FPL customers $178 million in fuel costs over the life of the project.
According to FPL’s Senior Director of Project Development, Buck Martinez, Florida’s renewable energy industry shows tremendous potential.
“Due to Florida’s climate and geographic location, it could position itself as a global leader in renewable energy and as an exporter of intellectual property and energy products to islands in the Caribbean and other countries,” Martinez said.
However, according to Martinez, the state legislature must pass enabling legislation which would allow utilities to choose to invest in more renewable energy, on behalf of their customers, at a low cost. This would further help the state tap into the vast potential of the solar market. In Florida alone, 700 MW of solar energy would create 40,000 jobs and $8.1 billion in economic impact, according to a recent study by the Washington Economics Group.
Federal incentives also are helping to grow Florida’s renewable energy industry, particularly biofuel.
In January 2011, INEOS Bio and its joint venture partner, New Planet Energy, announced they have received a conditional commitment for a $75-million loan guarantee from the USDA 9003 Biorefinery Assistance Program. Funds will be used for construction of the world’s first INEOS BioEnergy Center to be located near Vero Beach. The BioEnergy Center will produce eight million gallons of advanced biofuel per year together with six megawatts (gross) of renewable power from biomass including yard, vegetative and wood wastes and municipal solid waste. Financing from the USDA program is provided to advance the next-generation bio-energy technologies into the commercial sector.
“We are encouraged by the continued confidence and commitment the federal government has shown in assisting with the commercial development of this new bio-energy technology,” said Peter Williams, CEO of INEOS Bio and chairman of INEOS New Planet BioEnergy. “These programs are providing the funds needed to enable the U.S. to achieve a leading position in the bio-energy sector through projects such as ours. As well as directly assisting construction of the INEOS New Planet BioEnergy commercial plant, the loan guarantee also represents an important step along the road to replication of this exciting new technology through INEOS Bio’s licensing program.”
The BioEnergy Center will process waste from local citrus and agricultural operations, yard wastes, wood waste and municipal solid waste, turning them into energy. Site preparation and construction are underway at the BioEnergy Center, which has created 55 new jobs to date. The center, slated to begin operations in 2012, is anticipated to provide 175 jobs during construction and 50 full-time jobs once the facility is completed.
The heart of INEOS Bio’s technology is a patented anaerobic fermentation step, through which naturally occurring bacteria convert gases derived directly from biomass into ethanol. Unlike other technologies that rely on one primary source of feedstock, the INEOS Bio process can produce ethanol and renewable energy from numerous feedstocks, including construction waste, municipal solid waste and forestry and agricultural waste, while breaking the link between food crops and ethanol production. This flexibility allows facilities like the Florida BioEnergy Center to be built anywhere in the world wherever there is biomass waste, providing jobs and locally sourced renewable energy for urban and rural communities.
When it is completed, the plant is expected to produce 8 million gallons per year of cellulosic ethanol and 6 MW of electricity. That is enough to power more than 11,000 cars and 4,700 homes for a year.
NM PIONEERS A SMART GRID
Former Gov. Bill Richardson of New Mexico (he left office in January) pursued policies to attract green companies and earn New Mexico recognition as the West’s clean-energy manufacturing hub, with a particular emphasis to grow its thriving and cutting-edge solar industry and to develop a green smart grid.
In June 2010, Gov. Richardson announced that two new green energy projects, the CFV Solar Test Laboratory and the Fraunhofer R&D Facility will begin operations in the former Advent Solar site at Mesa del Sol in Albuquerque by the end of 2010. The two entities will create 30 to 40 new renewable energy jobs.
“As we build a thriving solar industry in New Mexico, it is important that we attract all aspects of the industry,” said Gov. Richardson. “That is why I am pleased to announce the establishment of the CFV Solar Test Laboratory and the Fraunhofer R&D facility. This shows that our renewable energy policies and pro-business attitude continue to draw international interest and investment.”
The test laboratory is a joint effort between the Fraunhofer Center for Solar Energy Systems of Freiberg, Germany; the Fraunhofer USA Center for Sustainable Energy Systems in Cambridge, MA; the Canadian Standards Association-International of Toronto (CSA International); and VDE Testing and Certification Institute of Offenbach, Germany.
After a thorough evaluation process, CSA International chose to locate its new facility, which will test products for certification to North American and international PV test standards, at the Mesa Del Sol development in Albuquerque. The Mesa Del Sol facilities are close to the airport, Sandia National Labs, the University of New Mexico and other major players in the PV supply chain.
“The decision to place this new solar testing facility in New Mexico puts us in the epicenter of the PV installation market in the U.S.” said Randall W. Luecke, president, CSA International. “The conditions, from a business and testing perspective, made choosing Albuquerque a strategically smart move that will allow for market growth and excellent outdoor test conditions.”
Mesa del Sol, a master-planned community, provides real-world physical domains for data collection and technology demonstrations to advance the state-of-the-art in renewable energy and sustainable communities. Its facilities also are helping to attract other high-tech companies.
In May 2009, Schott Solar opened its new 200,000 square foot solar factory at the development. The company invested more than $100 million in the facility, which will produce PV modules and receivers for concentrating solar thermal power plants. Schott is one of the largest solar equipment manufacturers in the world, with operations in 41 countries and 16,800 employees.
“This Schott Solar facility is one of our biggest successes,” said Gov. Richardson. “It is one of the most significant economic development projects in recent state history and is a tremendous boost to our fast-growing clean-energy sector.”
In July 2010, MSR-FSR, a local supplier of technical services, announced it will also occupy space at the former Advent Solar building at Mesa del Sol. The company provides support services to the semiconductor, solar and pharmaceutical industries, including material and equipment supply, cleaning, repair, removal, conversion and installation.
CFV Solar and Fraunhofer will take a combined 27,000 square feet, while MSR-FSR will occupy 46,000 square feet and use the existing clean room.
In addition, Sandia National Laboratories announced it is planning to open in its Aperture Center at Mesa del Sol to demonstrate new technologies and methodologies including: smart grid and microgrid; energy monitoring and storage; concentrating solar technologies; and energy control and security. Sandia is one of the nation’s leading energy research and development laboratories.
Overall, these projects add new dimensions to New Mexico’s emergent solar industry, helping to build an economic climate that will attract companies who want to take advantage of the state’s solar resources.
“Mesa del Sol has a vision,” said Jason Lott, director of leasing at Mesa del Sol development and building owner Forest City Covington. “Mesa del Sol just experienced success when it landed three tenants in one building. It’s a pretty big coup given this commercial real estate market.”
Planning the Economic Backbone of the Future
One key challenge facing New Mexico’s alternative energy industry continues to be increasing long distance electric transmission capacity that can adapt to the state’s changing electricity infrastructure. Projects that choose to locate in other states because of New Mexico’s inadequate transmission infrastructure represent billions of dollars of lost in-state capital investment. To address this problem, the state is in the process of establishing a green smart grid, which will integrate an increasing amount of renewable energy into the electric system in a seamless fashion.
In order to greatly expand its alternative energy generation options, New Mexico helped establish the nation’s first renewable energy market hub in 2009. The Tres Amigas SuperStation, which will be located in Clovis, will for the first time provide the capability to transfer thousands of MW of power between the three U.S. power grids.
“By enabling the exchange of wind, solar and geothermal power between all three grids, the Tres Amigas SuperStation will help break our nation’s transmission bottleneck,” said Phil Harris, CEO, Tres Amigas, LLC.
Two other big announcements to help enhance the grid came in 2010.
In June, Gov. Richardson announced that 19 Japanese companies, including Toshiba, Kyocera and Hitachi, selected two sites in New Mexico for testing smart grid technologies as part of a $30 million U.S.-Japan Smart Grid Collaborative Demonstration Project being conducted between 2010 and 2014.
The statewide project, which will break ground in late 2011 or early 2012, is being carried out by the New Energy and Industrial Technology Development Organization (NEDO) in collaboration with the state of New Mexico, Los Alamos County, PNM Resources, Mesa del Sol, and Sandia and Los Alamos national labs.
“This NEDO-New Mexico project can be a major resource for future introduction of wind, solar and other renewable forms of energy into our main grid,” said Thomas Bowles, Science Advisor to Gov. Bill Richardson.
NEDO picked the LEED silver certified Aperture Center in Mesa del Sol as a test site for a commercial microgrid, to aid in the introduction of renewable technologies into the power supply. Los Alamos County was selected for the residential component of the project. There, the project will implement and demonstrate three basic components: smart meters, utility scale PV and a smart feeder.
“The Aperture Center in Mesa del Sol has been selected after a thorough search for the right building for smart grid evaluation,” said Kazuyuki Takada, the NEDO representative, from Washington D.C.
“We are committed to energy solutions, and this project seeks to put Mesa del Sol at the forefront of creating a workable smart grid in the near future using renewable energy forms,” said Michael Daly, president of Mesa del Sol.
Also in June, Santa Fe Clean Line LLC, a subsidiary of Houston-based Clean Line Energy Partners, announced its acquirement of the Santa Fe transmission line project from Integrated Transmission Solutions LLC. The clean line will transmit up to 3,500 MW of energy from new, renewable generation projects via an approximately 750 mile long overhead high voltage, direct current (HVDC) transmission line. Potentially running from eastern New Mexico to Arizona and other western states, the project, when built, will facilitate the construction of billions of dollars of new clean energy generation.
“There is a tremendous untapped renewable energy resource in eastern New Mexico but infrastructure to move electricity from attractive wind resource areas to consumers in distant western markets is insufficient,” said Clean Line President Michael Skelly. “This transmission line will provide a solution to that problem and will enable the electric industry in the West to provide their customers with access to the most affordable clean energy available.”
The project, in the early stages of development, is expected to take five years to complete and cost approximately $2 billion. Clean Line expects to fund all development costs and does not plan to seek cost recovery through the electric rates paid by consumers. Once built, the project will enable an additional $7 billion in investments in new wind and solar projects which today cannot be built because of the lack of transmission. These projects could power more than a million American homes.
GREEN INNOVATION IN KY
As the third-largest coal-producing state with the highest per capita consumption of residential electricity, Kentucky has been responding to its energy challenges in a number of ways.
State legislation and a new roadmap developed by the Kentucky Department for Energy Development and Independence (DEDI) is helping the state establish mechanisms to promote renewable energy projects and energy efficiency technologies within the state and help to develop alternative transportation fuels from its coal and biomass resources. Currently, the state relies on renewable resources for less than 3 percent for its energy generation. The roadmap outlines a goal to triple this amount to provide the equivalent of 1,000 MW of clean energy by 2025.
Kentucky uses only 5 to 10 percent of its potential biomass resources for the production of biofuels such as ethanol and biodiesel. By 2025, DEDI’s goal is to derive 12 percent of its motor fuels demand from biofuels.
In 2010, the DEDI awarded $800,000 for five bio-energy related research projects, including combined heat and power and biomass-fired power plant projects, through the Energy Commercialization and Research grant. If enacted, the plan will provide 30,000-40,000 new jobs as a result of a booming diversified energy sector, according to DEDI.
One such project is using the power of algae and other non-food crops to produce biofuels. Algae are some of the fastest growing plants in nature and have the ability to convert large amounts of carbon dioxide into oxygen. In fact, they help produce as much as 80 percent of our planet’s oxygen.
The production of biofuels from algae does not reduce atmospheric carbon dioxide (CO2) because any CO2 taken out of the atmosphere by the algae is returned when the biofuels are burned. However, they do potentially reduce the introduction of new CO2 by displacing fossil hydrocarbon fuels.
In September 2010, Alltech Inc., a global leader in natural animal nutrition based in Nicholasville, KY, announced the acquisition of a state-of-the-art algae fermentation facility in Winchester, KY from Martek Bioscience Corporation for $14 million.
The 23-acre site, slated to open in mid-to late March 2011, will be renamed Alltech Winchester and will represent a further increase of more than 1 million liters of fermentation capacity for the company and become its 5th primary production site in North America and 10th globally. At full production, the plant is expected to have 50-plus technical jobs.
“For Alltech, algae fermentation presents our latest technological platform from which we expect incredible opportunities in the areas of food, feed and fuel to arise.” said Alltech Founder and President, Dr. Pearse Lyons. “We have worked in this area for several years and see it playing a major role in both human and animal health and nutrition as one of the world’s more renewable food and energy sources.
Its potential for biofuel has garnered the most attention due to algae’s ability to produce more fuel than corn. Alltech is conducting a pilot project at East Kentucky Power Cooperative to grow algae to sequester flue gas inside coal-burning power plants. The goal is to then grow these algae, which produces a product rich in oil, proteins and carbohydrates which could be used to power vehicles.
“Algae are one of the most diverse organisms in the world and their potential for product development is tremendously exciting for us,” said Becky Timmons, Alltech’s Director of Applications and Quality Assurance.
Alltech’s existing rural community biorefinery plant in Springfield, which currently employs around 93 people, is one of the first in the nation to utilize cellulose, such as switch grass, corn cobs and corn stover, at raw material levels of up to 30 percent. The cellulose is then converted to ethanol and other value-added products.
Argonne: U.S. Battery Center
Kentucky’s efforts to bring Argonne National Laboratory’s new battery manufacturing research center to the state are helping to attract high-tech companies.
In July 2010, Governor Steve Beshear announced nGimat LLC, a subsidiary of Atlanta-based nGimat Co., is establishing a new lab facility in Lexington to develop advanced lithium titanate energy storage nanomaterials for use in next-generation lithium-ion automotive batteries, as well as in energy storage components for the emerging electrical smart grid.
This announcement represents an initial investment of $740,000 and will create 18 new high-tech jobs over three years, followed by an additional 50 full-time jobs in production and administrative positions.
nGimat received a $250,000 forgivable loan from Kentucky’s Cabinet for Economic Development’s High-Tech Investment Pool, a program used to support technology-based and research-intensive companies and projects with tax incentive benefits up to $550,000 through the Kentucky Business Investment (KBI) program. In addition, the company received $60,000 through the Kentucky Enterprise Act (KEIA), a program that allows approved companies to recoup Kentucky sales and use tax on construction costs, building fixtures, equipment used in R&D and electronic processing equipment. The company is collaborating with the Argonne battery research center in Lexington. Governor Beshear announced formation of the Battery Manufacturing R&D Center in April 2009. Argonne is the federal government’s lead laboratory for applied advance battery R&D. The center is leveraging the expertise and research facilities at the University of Kentucky and the University of Louisville to develop and deploy a domestic supply of advanced-battery technologies for vehicle applications.
Together, nGimat and the center will help the U.S. develop advanced battery technologies, bridge the gap between research and commercialization and help ramp up domestic production capabilities.
Currently, the U.S. is far behind in developing electric vehicles and batteries for them, so there are certainly challenges ahead. Nearly all large-scale advanced battery production is in Asia, with the U.S. having only limited manufacturing capabilities. But according to Dr. Ralph Brood, who was selected in July 2010 to lead the center and has decades of experience in advanced battery technologies, the new center will help to remedy this situation.
“We are beginning to see the development of a battery but we have a long way to go,” said Dr. Brood. “The center is going to bring out the best of Kentucky’s efforts to further develop the Commonwealth’s manufacturing base and create jobs, and of Argonne and its broad-based and world-class energy storage R&D program.”
Dr. Liang Hu and his research team at 3H Company have developed a process to capture and absorb carbon dioxide (C02), a major contributing factor to climate change.
In 2010, the Bluegrass Business Development Partnership and Kentucky Science and Technology Corporation’s SBIR-STTR program recently announced a nearly quarter-of-a-million grant to 3H to help expand its groundbreaking and state-of-the-art work.
3H Company moved to the University of Kentucky campus in 2009 to develop a patented process to increase the rates of CO2 capture and reduce the capture cost which will improve energy efficiencies by saving as much as 80 percent of the current technology costs for doing so.
“CO2 is a by-product of combustion and when it is successfully captured from post combustion flue gas (coal fired power plant emissions), it can be utilized commercially,” said Dr. Hu. “Our CO2 capture process cannot only significantly lower the costs of captured CO2, but it will also reduce toxic emissions present in flue gas.”
The company’s groundbreaking work has attracted significant interest worldwide, with investors including E on US, SaskPower, EPRI (Electric Power Research Institute) and NExant. In addition, other funding has come from the Department of Energy, the National Science Foundation, and the EPRI.
“My team and I have been welcomed in Kentucky, one of the nation’s largest coal producing states, and we are most appreciate of the levels of funding we have received,” said Dr. Hu.
VALERO ENTERS BIOFUELS MARKET IN SAN ANTONIO
Darling International Inc., a food industry “rendering” company, which collects used cooking oil and processes it for new purposes like biodiesel, has teamed with Valero Energy Corporation of San Antonio to expand its energy products to include a renewable fuel.
The joint venture will be known as Diamond Green Diesel, LLC. Valero will use loan funds to design, build and operate a biodiesel facility near Norco, LA (near New Orleans). Darling will supply used oil (and other fats, oils and greases) to Valero at its St. Charles refinery.
The facility is projected to generate 137 million gallons of biodiesel per year, which would nearly triple the nation’s biodiesel production capacity. The plant would add 700 temporary (construction-phase) jobs and 60 permanent (operational phase) jobs helping to energize a local economy still feeling the affects of Hurricane Katrina not to mention the current recession.
As a company with six of its 13 refineries stationed in Texas, it leaves much to be desired in terms of bringing green jobs to Texas. The Diamond Green facility is one of many recent ventures into clean energy by Valero amongst wind, natural gas, and ethanol production. That is great news for the country as green jobs are added to the industry, a larger production level of native fuel is produced and a decrease in the percentage of imported fossil fuel is needed. However, of Valero’s 10 ethanol production plants, only one is in Texas adding green jobs to the state. As for San Antonio, it is likely that the only green jobs created for the area are less to do with the trade skills and more to do with the administrative tasks associated with sale of the energy (the corporate headquarters, which house administrative functions of the company, is in San Antonio).
All of the alternative energy business in Texas do not necessarily involve projects built in the Lone Star State. For example, a 50-megawatt solar thermal power plant will be built in India, but it’s also an Abilene project, with Lauren Engineers and Constructors taking the lead in designing and building the power plant, according to company officials.
In the last state legislative session in Texas, more than 60 bills related to solar energy were filed, according to a report by the House Research Organization for the Texas House of Representatives. Those efforts seek to take maximum advantage of the state’s wide-open skies, which may have more solar resource potential than any other state.
Another Abilene, TX-based company, Empower Energy Solutions, reportedly has found a market for its products in Belize. Executives from Empower traveled with members of the Houston Chamber of Commerce to the Central American country in 2008, giving leaders in Belize a demonstration of solar technology. The group found a receptive audience because rolling blackouts are the norm for the impoverished country. According to reports, the company is working on a solar installation that will be used to power a school and possibly a hospital as well.
Lauren Engineers, founded in the 1980s, has always been in the power industry. The company first undertook a solar project in 2005, taking over a role to design and construct a 64-megawatt plant in Boulder City, NV known as Nevada Solar One. Lauren had about 1,000 workers involved with the 16-month project, including about 150 in Abilene. Design work was done locally, as was some pipe fabrication needed for the project. The company also was involved in a solar project in Florida that is producing 75 megawatts of power.
The energy grid that powers most of Texas primarily uses coal and natural gas, which provide more than 75 percent of the state’s electricity. The share of energy produced by wind has increased to 7.8 percent from less than 5 percent in 2008; solar energy has provided less than 1.5 percent of the power load.
Compared with other states, Texas ranked 13th in solar energy production in 2009, according to the Texas House of Representatives research group, with only 8.3 megawatts of electricity-generating capacity. However, in the next two years the percentage of energy generated by solar installations is expected to increase dramatically.
A 27-megawatt concentrating solar plant called Western Ranch is scheduled to be online soon. Municipal utilities in San Antonio and Austin also reached agreements to purchase power from photovoltaic solar plants. Solar installations are being developed in San Angelo, with Terra-Gen planning to build a solar farm near the city.
Texas had 3,068 solar jobs in 2010, according to an estimate published by The Solar Foundation, a nonprofit group that promotes solar energy. Nationally, the group estimated that there were 135,458 solar jobs.
MICHIGAN: BUILDING A GREEN ENERGY FUTURE
In a state as impacted by the economic downturn as Michigan, green is gold. And the rush to cash in is on, as solar, wind and lithium-ion battery manufacturers and suppliers bring new, vital industry to the state.
Case in point is the triple announcement last year that came from Midland-based Dow Chemical Co., Michigan’s biggest corporate investor. Dow plans to develop wind, solar and alternative battery power projects totaling more than $1 billion and creating 2,500 direct jobs and 4,400 spinoff jobs. The Michigan Economic Development Corp. (MEDC) awarded Dow $61.3 million in tax credits over 15 years for the projects. On the solar end, Dow will build its first full-scale production facility for its Powerhouse® Solar Shingle in Midland. The company’s revolutionary roofing shingle was unveiled in October. Also, Dow will team with South Korean partner TK Advanced Battery, calling itself Dow Kokam, to construct a manufacturing facility for its lithium-polymer batteries for electric vehicles. The facility entails a $294 million investment from Dow Kokam over the next three years. For the wind energy component, Dow will partner with Oak Ridge National Laboratory in a separate venture to develop a facility focused on low-cost carbon fiber for wind turbine blades and other projects.
“Taken together, these investment decisions total more than $1 billion and constitute a huge stamp of approval by a global corporate leader that maintains facilities in 23 states and 51 countries worldwide,” Greg Main, president and CEO of the MEDC, tells Business Facilities.
Also of note is General Electric’s recent announcement that it will open an advanced manufacturing technology and software center in Van Buren, near Detroit, with a focus on wind energy technology and other renewable energies. The center will include a new $100 million, 100,000-square-foot research and development facility. The state is providing $60 million in incentives over the next 12 years to support the center.
Michigan also is home to United Solar Ovonic, which manufactures solar panels, and Evergreen Solar, as well as a host of manufacturers of lithium-ion batteries. Last year, four battery production projects, including Dow Kokam’s operation, were announced after winning a combined $860 million in federal grants to help launch production. A123 Systems Inc., which has operations in Ann Arbor and Novi, will invest more than $600 million in a new battery plant in Livonia. Korean-based LG Chem and Troy-based subsidiary Compact Power, in partnership with General Motors, will invest $244 million to jointly establish a 660,000-square-foot lithium-ion battery cell manufacturing facility. And Milwaukee-based Johnson Controls-Saft Advanced Power Solutions will invest $220 million in an advanced battery production plant.
“Our greatest successes have been luring significant investment in the solar and advanced battery industries by global best practice companies that would have never considered Michigan without our aggressive and strategic initiatives,” Main says.
A growing number of major wind turbine manufacturers and tier one suppliers also have or are planning operations in Michigan including Danotek Motion Technologies, Global Wind Systems, Great Lakes Towers, Cascade Engineering and Accio Energy. Michigan recently passed a renewable portfolio standard mandating that 10 percent of its electricity come from renewable sources by 2015 and 25 percent by 2025. A 10 percent by 2015 RPS would generate a demand for approximately 1,250 new wind turbines during the next seven years.
“Michigan is executing a very aggressive economic diversification strategy, and developing a robust renewable energy industry is a key component of that plan,” Main says. “We are working hard to leverage the state’s unique strengths such as our engineering and R&D expertise, manufacturing know-how, our universities, natural resources and competitive business climate to attract and grow companies in this competitive sector.”
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