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OHIO STATE UNIVERSITY EXTENSION
Energy as an Economic
Development Strategy
Aiding Public Officials in the Decision Making Process
June, 2015
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OHIO STATE UNIVERSITY EXTENSION
Learning Objectives
• Energy Trends
• Energy and Economic Development
• Large Scale Renewable Energy Development
• Shale Energy Development & Trends
• Distributed Energy Development
• Next Steps - Energy as a BR&E Strategy
OHIO STATE UNIVERSITY EXTENSION
Ohio Energy Trends
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OHIO STATE UNIVERSITY EXTENSION
Total Global Energy Consumption
SourceSource: U.S. Energy Information Administration, Independent Statistics & Analysis. www.eia.gov
1980
1983
1986
1989
1992
1995
1998
2001
2004
2007
2010
0
100
200
300
400
500
600
(Qua
dril
lion
Btu
)
The 2011
International Energy
Outlook Report
estimates the world
energy consumption
of 770 quadrillion Btu
in 2035.
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OHIO STATE UNIVERSITY EXTENSION
Average Retail Price of Electricity in Ohio
19901992
19941996
19982000
20022004
20062008
20102012
20140.00
2.00
4.00
6.00
8.00
10.00
12.00
Residential Sector Commercial Sector Industrial Sector Transportation SectorOther All Sectors
Source: (USDOE/EIA, 2014) The Current and Historical Monthly Retail Sales, Revenues and Average Revenue per Kilowatthour by State and by Sector
Cent
s per
Kill
owatt
-hou
r
OHIO STATE UNIVERSITY EXTENSION
“There has been a fivefold increase in investment
in new electricity transmission capacity since
1997, as well as large increases in spending for
distribution capacity. Since 1997, roughly $107
billion has been spent on new transmission
infrastructure and $318 billion on new distribution
infrastructure.”
Energy Information Administration, ANNUAL ENERGY OUTLOOK
2015. (2015).
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OHIO STATE UNIVERSITY EXTENSION
Age of Ohio Electric Power Generators
10 or fewer
11-20 21 - 30 31 - 40 41 - 50 51 - 60 More than 60
0%5%
10%15%20%25%30%
6%
24%
9%
22% 24%
12%
3%
Percentage of Total Generation Capacity in Ohio
Age in Years
Source: 2012 Form EIA-860 Data - Schedule 3, 'Generator Data' (Operable Units Only)
OHIO STATE UNIVERSITY EXTENSION
Energy and Economic Development
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OHIO STATE UNIVERSITY EXTENSION
JobsOhio Classifies Energy as a Primary Industry
Ohio’s Utica shale presents substantial opportunities for investments at all levels. The state also is experiencing growth in the wind and solar supply chain, as well as advanced technologies for energy efficiencies and a diverse supply of power generation.
Quick facts• Employment - 40,835 people • Gross state production - $17.5 billion • Average wages - $72,705 • Number of firms - 1,213
OHIO STATE UNIVERSITY EXTENSION
“The main goal of economic development is
improving the economic well being of a
community through efforts that entail job
creation, job retention, tax base enhancements
and quality of life.”
The International Economic Development Council
Economic Development Reference Guide
What is Economic Development ?
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OHIO STATE UNIVERSITY EXTENSION
Tax Generatione.g. Large Scale
Renewable Energy
Job Creatione.g. Shale Energy
Development
Job Retentione.g. Distributed
Energy Generation
Energy and Economic Development
OHIO STATE UNIVERSITY EXTENSION
Large Scale Renewable Energy Development
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OHIO STATE UNIVERSITY EXTENSION
Walmart’s Approach to Renewable Energy
• Text
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OHIO STATE UNIVERSITY EXTENSION
2009 2010 2011 2012 2013 2014 20150
100
200
300
400
500
0
100
200
300
400
500
Ohio Renewable Energy Development ( All Technology)
# of Facilities Total MW
# o
f C
ert
ifie
d F
ac
ilit
ies
Ca
pa
cit
y -
Me
ga
wa
tts
(M
W)
304 MW49 MW
71 MW
99 MW
100 MW
10 MW37 MW
49 MW
49 MW
177 MW25 MW
12 MW
10 MW
Source: PUCO (March, 2015)
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OHIO STATE UNIVERSITY EXTENSION
Ohio Renewable Energy Generation By Technology
Source: PUCO (March, 2015)
Abandoned Coal Mine Methane
4%
Biomass27%
FuelCell0%
Hydroelectric6%
Solar PV10%
Solid Waste4%
Waste Energy Recovery5%
Wind45%
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OHIO STATE UNIVERSITY EXTENSION
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OHIO STATE UNIVERSITY EXTENSION
Full slide picture
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OHIO STATE UNIVERSITY EXTENSION
Support for Wind Turbines Based on Residents’ Zip Code of Renewable Energy
Other zipcode 433590%
10%
20%
30%
40%
50%
60%
70%
80%73%
48%
16%
30%
11%
21%
Support/strongly support
Neutral
Opposed/strongly opposed
General support or op-position for wind tur-bines in their county:
Local Support or Opposition of Development?
OHIO STATE UNIVERSITY EXTENSION
Shale Energy Development
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OHIO STATE UNIVERSITY EXTENSION
Ohio Natural Gas Production (2000 - 2014)
Source: PUCO (March, 2015)
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
-
100,000,000
200,000,000
300,000,000
400,000,000
500,000,000
600,000,000
Total Production Shale Production
Mill
ion
Cub
ic F
eet
(Mcf
)
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OHIO STATE UNIVERSITY EXTENSION
Ohio Oil Production (2000 - 2014)
Source: PUCO (March, 2015)
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
-
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
Total Production Shale Production
Bar
rels
OHIO STATE UNIVERSITY EXTENSION
“But Global Data also flagged the competitive advantage that
U.S. companies will receive from the lower cost provided
by shale gas. And this opportunity is attracting investment
from some of the industry’s bigger names. Just last week the
International Energy Agency said some 30 million European
jobs are at risk as manufacturers of petrochemicals, plastics
and fertilizers are relocating to the U.S.”
Source: Shale Reshapes Petrochemicals Business. The Wall Street Journal. Ben Winkley (July, 2014)
OHIO STATE UNIVERSITY EXTENSION
Natural Gas Processing Plant - Natural gas processing removes impurities and separates higher- valued products known as natural gas liquids. Processing prepares a dry gas stream that meets industry standards for transportation in high-pressure pipelines.
Fractionation Plant - Fractionation is the process that involves the separation of the natural gas liquids into discrete natural gas liquid purity products (i.e., ethane, propane, normal butane, isobutane, and natural gasoline).
Steam cracker Plant - A steam cracker is a petrochemical plant that uses feedstocks (i.e., ethane, propane) to create ethylene, propylene, and other petrochemicals.
Ohio Midstream Processing Terms
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OHIO STATE UNIVERSITY EXTENSION
Ohio Midstream Processing Infrastructure
2013 2014 2015 -
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
Fractionation Natural Gas Processing
Nat
ural
Gas
Pro
cess
ing
Mm
cf/d
ay
Fra
ctio
natio
n –
bbl/d
ay
OHIO STATE UNIVERSITY EXTENSION
Ohio Getting Ethane Cracker Plant? “Appalachian Resins Inc., a Houston company, has leased 50 acres of land in
Monroe County. When built, the Ohio plant would process about 18,000 barrels a
day of ethane.”
Source: the Columbus Business First (August, 2014)
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OHIO STATE UNIVERSITY EXTENSION
Downstream Value Chain Markets
OHIO STATE UNIVERSITY EXTENSION
Distributed Energy Development
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OHIO STATE UNIVERSITY EXTENSION
Walmart’s Approach to Renewable Energy
• Text
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OHIO STATE UNIVERSITY EXTENSION
“This is a financial investment, it just happens to
be green. We will never tell you, go spend six or
seven million dollars to be green. We will tell you,
spend six or seven million dollars to be profitable,
and if you can be green while doing this, great”
– Jereme Kent One Energy LLC.
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OHIO STATE UNIVERSITY EXTENSION
G&S Titanium Solar Project• 65 kW PV Solar fixed/tracking System installed by Carbon Vision LLC
• “With the financial incentives we have already received, the elimination of our monthly electric bill, and the avoidance of future rate increases, we foresee a total R.O.I. of roughly 8.5 years.” - Roger N. Geiser, Owner, October 5, 2012
$323,700 - Cost
$93,081 – Federal Government Check
$75,000 – AEP Credits Check
$68,049 – IRS Asset Dep.
$76,500 – 8.5 Years of Electric Bills (9K)
$11,000 – 8.5 Years Future Rate Increases (5%)
$323,000
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OHIO STATE UNIVERSITY EXTENSION
Example: Swine Facility
29.25 kW system / Generating 29,250 kWh per year
117 panels (250 watt)
Average usage = 54,000 kWh per Yr.
Offset 70% of electric needs
Rooftop system south facing at 35 degree tilt.
OHIO STATE UNIVERSITY EXTENSION
Energy as a BR&E Strategy
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OHIO STATE UNIVERSITY EXTENSION
What Can You do Locally?
• Identify businesses that have an interest in energy efficiency and distributed energy investments.
• Research net metering rules for your county/township.
• Identify funding and support programs.
• Include rules for siting renewable energy projects in local zoning ordinances.
• Include space for energy development into future planning of business parks.
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OHIO STATE UNIVERSITY EXTENSION
NFIB National Small Business (less than 250) Poll
• The energy costs of individual small businesses vary greatly. Ten (10) percent of small employers claim that energy costs are the largest single cost they have while 8 percent claim that they have no direct energy expenses.
• Small-business energy costs (closely related to
consumption) are primarily linked to vehicles (38%), heating and cooling of occupied space (33%), operating equipment or processes (21%) and lighting (6%).
So, How Can We Help You?
• OSU has developed a Business Retention and Expansion Program.
• Program was created in 1986 and has been used in nearly all Ohio Counties.
• Originally created to focus on the manufacturing sector but has since expanded in the retail sector and specific sectors ie health care, downtowns
BRE Energy Development Program
• The primary objective of this program is to increase the knowledge, awareness of business owners and leaders concerning distributed energy generation, net metering, and renewable energy development.
• This program will provide participants the tools and knowledge to enhance decision-making capacity on energy investments, allowing Ohio businesses to prosper, grow, and provide stabilized employment opportunities
Components of the BR&E
• A customized business retention and expansion survey to be distributed to businesses in your community. This electronic survey will serve as a needs assessment, market the program to businesses, and collect critical data to assess overall compatibility with distributed energy projects.
• Presentation from OSU Extension providing renewable energy policy overview and foundation level information on distributed energy generation, net metering, and renewable energy projects.
• Expert Q&A panel session with utility, industry, and financial experts, to provide detailed information on net metering, rules, cost, construction, permitting, timing, and financing options.
Components of the BR&E
• Case study sessions presented by business leaders who have successfully implemented distributed energy generation projects in Ohio and can highlight both opportunities and challenges with their respective projects.
• Meetings with panel representatives to advance project discussions to a more detailed level. Companies (participants) will bring electric consumption data with them to take advantage of this initial consultation with facility visits to follow at a later date, if the company chooses.
• A Comprehensive Economic Development Energy Strategy
OHIO STATE UNIVERSITY EXTENSION
Questions ?
Eric Romich
OSU Extension Field Specialist, Energy Development
romich.2@osu.edu
energizeohio.osu.edu
David Civittolo
OSU Extension Field Specialist, Community Economics
Civittolo.1@osu.edu
comdev.osu.edu/programs/economic-development/business-retention-expansion