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2010 Rural Partners Forum

Clean Energy: the context

Clean energy offers job and business opportunities with the potential to grow into an important sector of North Carolina’s economy. Driven by concerns about global warming, dependence on foreign oil and the environmental costs of mining and extraction, public policies at the federal and state level are accelerating the growth of clean energy, which encompasses both energy efficiency and development of renewable energy supplies. The emerging clean energy economy involves businesses that design and deliver products and parts for generating renewable energy, and those that install energy-efficiency measures in homes and businesses.

 

With energy efficiency, businesses and families are motivated to consume less energy and cut energy costs. It encompasses a wide range of business activities -- from low-tech home weatherization to developing new construction materials, from manufacturing and installing Energy Star home appliances to retrofitting industries with more efficient technologies, from designing a new generation of batteries for electric cars to designing new forms of storage for solar farms. Every business and family can benefit, and these consumer demands will stimulate business opportunities and jobs for those trained in energy-saving techniques.

 

On the supply side, clean energy generally refers to sources other than fossil fuels, especially those that are renewable in nature. In North Carolina, clean energy sources include wind, solar and biomass, which uses forest- and farm-raised products and waste materials to produce biofuels or to generate electricity. For example, researchers are investigating the use of switchgrass and other plant material that could be grown in North Carolina as feedstock for ethanol and biodiesel. And several communities are perfecting techniques to capture and use methane gas that otherwise would escape into the atmosphere from landfills and livestock operations.

 

The potential for business and job creation exists along the entire continuum on both sides of the clean energy equation. One business may install energy-efficient windows; another may make them. One company may produce electricity from wind or solar panels; others may manufacture the wind turbines or solar panels while still others make the blades, storage devices or other components.

 

Trends


Up to now, high start-up costs have limited widespread adoption of solar, wind and geothermal systems, but the balance sheet is shifting toward renewables. Several government programs encourage both efficiency and clean energy generation. More than two dozen states, including North Carolina, now require power utilities to generate a percentage of electricity from renewable sources. Federal and state tax credits and renewable energy portfolio requirements have helped make renewable energy ventures more profitable and attractive to investors. In addition, the American Recovery and Reinvestment Act has temporarily injected millions of dollars into weatherization and efficiency programs. As these measures increase demand, American manufacturers of renewable energy equipment are playing catch-up to their Chinese and German counterparts. North Carolina, however, has some geographic advantages that could help accelerate growth of the new energy economy, especially wind and biomass.

 

Although the ARRA portion of energy efficiency programs will run out in 2012, consumer demand for clean, renewable energy solutions is building. Concerns over global warming and dependence on foreign energy sources are now reinforced by the BP catastrophe in the Gulf of Mexico. As increased production lowers unit costs, clean energy and energy-efficiency solutions – already cost-effective over the long term in many instances – will become all the more affordable with shorter payback periods.

 

Current impact


Clean energy already makes a sizeable contribution to the state's economy. The N.C. Sustainable Energy Association’s 2009 Renewable Energy and Energy Efficiency Census attributes $3.5 billion in annual economic activity to clean energy industries. The recently released 2010 NCSEA Census reported that the sustainable energy industry employs more than 12,500 people. This represents an increase from the 10,250 employees reported in 2009. Well worth noting, the sustainable energy sector expanded during a year of contraction for much of the rest of the economy.

 

Using a broader measure of economic potential, Keith Debbage of the University of North Carolina at Greensboro found 1,300 companies in the extended supply chain poised to serve the clean energy sector in 2008. Those companies currently employ 61,000 people, but it should be noted that these companies supply parts and equipment for sectors other than energy. Nonetheless, they have the potential to expand and add jobs in the clean energy sector as it grows.

 

Potential impact in rural areas


Although the current and potential economic impact of clean energy is substantial statewide, it is concentrated heavily along the highly populated I-85 corridor, with some significant outposts found in Asheville, Hickory and Wilmington. Firms participating in the supply side of the clean energy economy are located primarily in urban counties. Among rural counties, the strongest clean energy presence is in the west, where AdvantageWest and Land of Sky Regional Council have organized efforts to promote green business clusters. Also noteworthy is activity in Iredell, Chatham and Randolph, counties on the edges of urban areas.

 

Wind. Among all renewable energy sources, wind power seems to show the greatest promise for creating jobs and business opportunities in rural areas. The U.S. Energy Information Administration ranks North Carolina among the top 10 states in wind power capacity. It cites the potential to create 5 to 10 gigawatts of electricity from off-shore wind, a production level could lead to 10,000 to 20,000 new manufacturing jobs for the state.  

 

Currently, the University of North Carolina and Progress Energy Carolinas are engaged in a three-year study to further map and model the state's off-shore wind energy potential. Coastal counties have sites, both onshore and in the sounds, with good wind exposure, relatively flat land and easy access to the power grid that should appeal to large-scale wind generators. Coastal areas also have proximity to ports, which is advantageous for manufacturing and shipping large wind-power turbines and blades.

 

Apex Wind Energy has applied for a federal exploratory lease for 216 square miles of ocean. If developed, phase one of the project is expected to cost $3 billion and produce 600 megawatts of electricity.

 

Biomass. Biomass offers substantial potential for farm income and rural business growth. Farm and forest resources are widely distributed across the state. Research by Alex Hobbs for the North Carolina Solar Center shows more than 35 counties  with large amounts of wood and agricultural waste that could be used for biofuels and other power generation. Most of these counties are located in rural areas, especially eastern counties with strong agricultural economies. Animal waste set-asides in the 2007 renewable energy portfolio standards give farms and biomass businesses additional opportunities to participate in the growth of the clean energy economy.  While several proposals for large-scale, animal waste-to-energy operations have been proposed in rural counties, one may need amendments to the 2007 legislation to secure approval from the Utilities Commission and another encountered local opposition.   

 

Solar. North Carolina has a few businesses that have found a workable model for tapping solar power with individual installations and solar farms, but their profitability currently relies largely on sale of renewable energy credits to investor-owned utilities and other tax credits. Over the past two years, the N.C. Green Business Fund, administered by the N.C. Board of Science and Technology, has invested in several projects that will improve and demonstrate solar techniques. A small but growing number of small contractors install solar panels for hot water and photovoltaic electricity for residential and institutional use. Western states and China have a substantial head start in solar technologies, making it less likely for North Carolina to be a leader in manufacturing solar panels and related equipment. The exception to this generality, however, may rest at N.C. State University, where researchers are investigating advanced energy storage devices. 

 

Energy efficiency. Energy efficiency has the most widespread potential for creating jobs and business opportunities in rural areas. Every rural county has homes that represent a large market for rehabilitation and energy-efficiency firms to upgrade. Public weatherization programs operate in all rural areas. While temporary, the American Reinvestment and Recovery Act is injecting $138 million into energy efficiency programs and broadening income standards for families to qualify for federal weatherization assistance.  For all homeowners, rural and urban, federal tax credits offer incentives to add insulation and to replace older heating and air conditioning systems. Many electric utilities actively promote energy audits and in-home improvements. Heating/air conditioning contractors have the opportunity to expand in nearly all areas of energy efficiency in every part of the state.  

 

Most community colleges are expanding training programs for people and small businesses eager to participate in the energy efficiency sector. Many of these jobs are well suited to entry-level job-seekers and to dislocated workers shifting careers.

 

Initiatives

 

The N.C. State Energy Office in the state Commerce Department administers programs and provides technical expertise focused on advancing energy efficiency in the public sector, encouraging the growth and development of the state’s energy economy and making North Carolina a leader in the creation of green jobs. The office also serves as a source of information on renewable energy, alternative fuels and energy efficiency.

 

The N.C. Green Business Fund, also part of the state Commerce Department, provides grants to help small North Carolina businesses develop commercial innovations and applications in the biofuels and green building industries, as well as attract and leverage private sector investments and entrepreneurial growth in renewable energy products and businesses.

 

The N.C. Solar Center at North Carolina State University researches and demonstrates the benefits of renewable energy sources, including solar, wind and biomass. The center manages the DSIRE project, the national “go-to” resource for renewable energy and energy efficiency policy and incentives. It also has teams dedicated to high-performance buildings, clean transportation and economic development.

 

Also at NCSU, a National Science Foundation-funded FREEDM Systems Center and the Advanced Transportation Energy Center are investigating high-efficiency energy storage devices and transmission technologies.

 

The N.C. Sustainable Energy Association works to ensure a sustainable future by promoting renewable energy and energy efficiency in North Carolina through education, public policy and economic development. The association works with government officials, business leaders, communities, partner organizations and the general public to remove policy barriers to market development and advocate for policies that will lead to a sustainable energy future.

 

The Energy Center at Appalachian State University facilitates the work of faculty and students engaged in teaching, research and outreach activities associated with energy technologies, conservation and policy. It also conducts energy research and applied program activities related to energy efficiency, renewable energy technology, biofuels and economic development.

 

The American Council for an Energy-Efficient Economy is dedicated to advancing energy efficiency as a means of promoting economic prosperity, energy security and environmental protection. The council conducts in-depth technical and policy analyses, advises policymakers and program managers, convenes conferences and workshops, and educates businesses and consumers on energy efficiency.

 

The Green Power Partnership is a program of the U.S. Environmental Protection Agency that supports the organizational procurement of green power by offering expert advice, technical support, tools and resources.

 

Several publications are devoted to helping North Carolinians understand green energy and use it as a tool to boost local economies.

  • The N.C. Green Economy Resource Directory, released by the state commerce department, highlights local, state and national organizations that provide support, guidance, funding, incentives and education for North Carolina’s green economy.

Sources


American Council for an Energy-Efficient Economy, “Energy Efficiency in the South.” Appendix G, State Profiles of Energy Efficiency Opportunities in the South: North Carolina. April 13, 2010.

 

American Council for an Energy-Efficient Economy, “North Carolina’s Energy Future: Electricity, Water and Transportation Efficiency.” March 2010.

 

Dianne Cherry and Shubhayu Saha, “Renewable Energy in North Carolina.” Popular Government. Spring/Summer 2008.

 

Keith G. Debbage, “Renewable Energy in North Carolina: The Potential Supply Chain.” Prepared for the N.C. State University Institute for Emerging Issues. August 2008.

 

National Wildlife Federation, “Offshore Wind in the Atlantic: Growing Momentum for Jobs, Energy Independence, Clean Air, and Wildlife Protection.” December 2010.

 

Nicholas C. Regas, “Offshore Wind Energy and North Carolina.” Presentation to the 6th annual N.C. Sustainable Energy Conference. April 14, 2009.

 

Paul Quinlan and Richard Crowley, N.C. Sustainable Energy Association, “North Carolina Renewable Energy & Energy Efficiency Industries Census 2009.”

 

Tomas Carbonell, Yale Law School, “Getting Ahead: New Opportunities in Clean Energy.” Prepared for the N.C. State University Institute for Emerging Issues. August 2008.

 

U.S. Department of Energy, “20% Wind Energy by 2030: Increasing Wind Energy’s Contribution to U.S. Electricity Supply.” July 2008.