It’s not JUST the rich economic opportunity in New Energy that matters. And it’s not JUST that the New Energies are a rich source of jobs. It’s also that the New Energies offer a remarkable opportunity to renew the nation’s manufacturing base, JUST when that opportunity is needed the most.
A lot of people find it difficult to understand how so many jobs can be promised by such new industries. That, however, is the point: The New Energy industries are still building their infrastructure and will be building it for decades. It is an infrastructure that will grow from providing 2% of U.S. power to providing probably a third of U.S. power by 2030 and perhaps all of it by the end of this century. Highly capital intensive, 70-to-75% of the cost of a wind project goes to the manufacturing sector, 68% of the total cost of solar power plants goes to equipment and 60-to-64% of the cost of solar photovoltaics is the cost of the modules and inverter. Somebody’s got to build all that.
The jobs numbers will boost national labor statistics but the real benefits will go to states and localities. Knowing this, state and local governments are looking to innovate policies especially effective at attracting New Energy manufacturing facility investment. State Clean Energy Policies Analysis (SCEPA): State Policy and the Pursuit of Renewable Energy Manufacturing, from researchers at the U.S. Department of Energy (DOE) National Renewable Energy Laboratory (NREL), takes a close look at the potential for new manufacturing in the U.S. through 2030 in the solar and wind energy industries and how to best design policies that attract manufacturers.
The researchers estimate the U.S. will invest $14-to-$20 billion per year through 2030 in New Energy hardware. This is based on 2008 DOE projections of what will be involved in the building of enough wind to supply 20% of U.S. power by 2030 as well as 4 domestic New Energy deployment scenarios. The study looks at potential needs for New Energy hardware that would result from pending Renewable Electricity Standards (RESs). It did not assume any specific mandates and it did not assume any price mechanism for greenhouse gas emissions (GhGs). It identified 2 specific uncertainties, (1) how much hardware prices will fall with increasing economies of scale, and (2) how much demand for U.S. New Energy hardware will come from export markets. ::continue::
The NREL study looks at the factors that determine how locations for new manufacturing facilities are selected and concludes that the essence of a successful strategy to attract new manufacturing facilities is a sustained and broad-based economic development program that (1) builds and promotes “durable assets” (trained workers, a diverse economic base, good infrastructure) and (2) removes the barriers to development (low facility start-up costs, low tax burdens for property and infrastructure).
The paper narrows in on New Energy manufacturing as part of NREL’s State Clean Energy Policies Analysis (SCEPA) project designed to accomplish the larger purpose of working with state officials to help them achieve their overall environmental, economic, and security goals.
The best thing about the long-term, broad-based economic development strategy recommended by NREL is that it is the best thing any state or community can do for itself. Building up strengths and emphasizing human resources are the fundamentals of expanding economic opportunities. Such action is likely to produce some effective kind of economic growth, whether in a New Energy industry or some other industry. Encapsulated in NREL’s sophisticated critical and econometric analysis is a very simple essential message: If you build it, they will come.
This post is based on State Clean Energy Policies Analysis (SCEPA): State Policy and the Pursuit of Renewable Energy Manufacturing by Eric Lantz, Frank Oteri, Suzanne Tegen, and Elizabeth Doris (February 2010, National Renewable Energy Laboratory)