By David Gaines, Managing Director of Goldstone Consulting Group, LLC
Energy security is a topic that has been on the minds of those in government for some time now. When the topic is discussed, it is often quickly turns to oil and the supply of it to keep the engines of an economy bubbling along. However, it is electricity that really drives a community. Without it, the gas pumps do not operate, the cash register will not ring up sales and the internet can not process a credit card transaction.
Electricity and its stability and reliable supply has been an ever increasingly critical concern to industry and a community’s ability to grow economically. The issue is that the current system is aging and is in need of a significant investment nationally to upgrade the total system. Renewable energy has an ever growing potential to be that solution to upgrading the electric generation system in the United States.
According to information available from the United States Energy Information Administration in 2022, 10.9 gigawatts of new utility-scale solar powered electricity production was installed and came into service in the United States. This was the second-best year of new production coming on-line. In 2021, 13.5 gigawatts of production were added to the national power grid.
Each year the number of solar panels shipped to be installed for production has increased. Fifty million megawatts of new peak panel production were shipped for installation in 2022. This is more than a six-fold increase than what was shipped by manufactures just a decade ago.
Additionally, over the past decade, the average cost of a solar panel has continued to decline when compared on the amount of power produced by the panel. In 2010, the cost was close to $2.00 per peak watt produced by solar panel. Thanks to improved productivity of the more modern panel, the cost in 2022 is less the $0.50 per peak watt produced.
The improved cost structure associated with the panels of today compared to those from a decade ago is making the production of electricity by solar power more attractive.
In a December 2021 report from the Energy Information Administration, more than a quarter of all currently operating coal fired electric generation plants plan to cease operations in the next dozen years. This is accelerating the pace of the development of renewable energy power generation projects.
Increasing costs associated with operating generations old coal fired electric powerplants are leading utility companies to reconsider their options to supply power to millions of service customers. With an average age nearing 50 years old, many electric power generation facilities are reaching the end of their operating life expectancy.
The expense with mining coal, and transporting that coal to where it is consumed to generate power has been increasing. Renewable energy projects offer the option of creating electrical power locally and consuming it locally from sources such as the sun and the wind.
Communities situated in rural areas are well-positioned to reap substantial benefits from renewable energy projects. The advantages extend beyond environmental considerations to encompass economic, social, and infrastructural dimensions.
Renewable energy projects, such as wind or solar farms, often require large tracts of land. Rural areas typically offer the necessary space for such developments. Projects constructed on some times marginal farm ground often provide a very positive impact to the land owner. Frequently development companies or utilities lease land from landowners at a higher financial return than more traditional farming operations produce.
Companies like Azmiuth Renewables, a Midwest based utility scale developer deliver a significant positive financial impact to communities without the typical community support of other economic development projects. Many times, there is no need for a community to make an investment in infrastructure such as new roads, water lines or wastewater treatment that a manufacturing company may require.
These projects contribute to the local economy by generating a tax base that provides new revenue to taxed supported entities that support a community with essential services. School Districts, Fire Districts, county and city governments, and even the local Health Department, among others are examples of benefactors from tax revenue created by renewable energy projects.
There is another beneficial effect created by renewable energy projects in rural communities. Job creation.
The construction industry experiences an increase in employment due to these types of economic development projects in a rural community. Suppliers to the construction industry also benefit. Electrical contractors, excavation companies, trucking firms, fuel suppliers and geotechnical engineers, are all positioned to benefit when a renewable energy project selects their community as a site for development.
Data obtained from the United States Energy & Employment Report of 2023 produced by the United States Department of Energy, indicates that employment increased by 3.8 percent in the energy industry and by 3.9 percent in the clean energy sector. The growth of jobs in this sector of the economy outpaced job growth in other areas from 2021 to 2022.
It is anticipated that employment opportunities in energy related sectors will continue to grow. Major projects such as the national electric grid modernization, new electric power generation projects and the various manufacturing operations of suppliers of components to such projects expand to meet future demand.
As in any sector of industry, having a steady supply of trained and qualified individuals to perform certain tasks is critical to the success of renewable energy concerns. This is where partnerships between industry and education are providing solutions to insure there is a source of training for future employees.
An exemplary case is the wind energy project in northern Missouri, where a local community college, Moberly Area Community College, became a key training partner. Previously having collaborated other industries in its service region, the college developed a curriculum integrating mechanical operations and electronics knowledge to equip potential employees with the skills necessary for modern production facilities. This program was swiftly tailored to meet the specific needs of the wind industry, resulting in the establishment of a certified program of study. The Kirksville, Missouri campus of Moberly Area Community College is now actively producing the skilled workforce essential to support the region’s new wind energy generation industry.
Additionally, skills from the construction and metal fabrication industries are often transferable to the renewable energy sector. The assembly skills possessed by various construction trades play a crucial role in the development and installation of new projects before they come online, showcasing the adaptability and interconnection of skills across different industries.
Adaptation is key. Just like colleges adapting new training programs to support a growing sector of industry, communities that are willing to consider a change in power generation can create a winning environment. An environment that can create new opportunity in a community and meet a national goal of energy security and independence at the same time.
Bio: David Gaines is the Managing Director of Goldstone Consulting Group, LLC an international site selection and economic development firm partnering with growing companies to develop expansion and location solutions. Goldstone Consulting Group also works with communities in discovering economic opportunities. Mr. Gaines is a frequent panelist on topics relating to economic development and community vitality. In addition, he has authored a variety of articles on economic and business development topics. He can be reached at david@goldstoneconsultnggroup.com.
