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
0
100
200
300
400
500
600
1980 1985 1990 1995 2000 2005 2010
(Quad
rill
ion B
tu)
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
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
Cen
ts p
er
Kill
ow
att-
ho
ur
Source: (USDOE/EIA, 2014) The Current and Historical Monthly Retail Sales, Revenues and Average Revenue per Kilowatthour by State and by Sector
Residential Sector Commercial Sector Industrial Sector
Transportation Sector Other All Sectors
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
6%
24%
9%
22%24%
12%
3%
0%
5%
10%
15%
20%
25%
30%
10 orfewer
11-20 21 - 30 31 - 40 41 - 50 51 - 60 Morethan 60
Age in Years
Percentage of Total Generation Capacity in Ohio
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 Generation
e.g. Large Scale Renewable Energy
Job Creation
e.g. Shale Energy Development
Job Retention
e.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
Renewable Portfolio Standard Policieswww.dsireusa.org / March 2015
WA: 15% x 2020*
OR: 25%x 2025* (large utilities)
CA: 33%
x 2020
MT: 15% x 2015
NV: 25% x
2025* UT: 20% x
2025*†
AZ: 15% x
2025*
ND: 10% x 2015
NM: 20%x 2020
(IOUs)
HI: 40% x 2030
CO: 30% by 2020 (IOUs) *†
OK: 15% x
2015
MN:26.5%
x 2025 (IOUs)31.5% x 2020 (Xcel)
MI: 10% x
2015*†WI: 10%
2015
MO:15% x
2021
IA: 105 MWIN:
10% x
2025†IL: 25%
x 2026
OH: 12.5%
x 2026
NC: 12.5% x 2021 (IOUs)
VA: 15%
x 2025†KS: 20% x 2020
ME: 40% x 2017
29 States + Washington
DC + 2 territories have a
Renewable Portfolio
Standard (8 states and 2 territories have
renewable portfolio goals)Renewable portfolio standard
Renewable portfolio goal Includes non-renewable alternative resources* Extra credit for solar or customer-sited renewables
†
U.S. Territories
DC
TX: 5,880 MW x 2015*
SD: 10% x 2015
SC: 2% 2021
NMI: 20% x 2016
PR: 20% x 2035
Guam: 25% x 2035
USVI: 30% x 2025
NH: 24.8 x 2025
VT: 20% x 2017
MA: 15% x 2020(new resources)
6.03% x 2016 (existing resources)
RI: 14.5% x 2019
CT: 27% x 2020
NY: 29% x 2015
PA: 18% x 2021†
NJ: 20.38% RE x 2020 + 4.1% solar by 2027
DE: 25% x 2026*
MD: 20% x 2022
DC: 20% x 2020
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OHIO STATE UNIVERSITY EXTENSION
0
100
200
300
400
500
0
100
200
300
400
500
2009 2010 2011 2012 2013 2014 2015 Cap
acit
y -
Meg
aw
att
s (
MW
)
# o
f C
ert
ifie
d F
acilit
ies
Ohio Renewable Energy Development ( All Technology)
# of Facilities Total MW
304 MW
49 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 Waste
4%
Waste Energy
Recovery4%
Wind45%
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OHIO STATE UNIVERSITY EXTENSION
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OHIO STATE UNIVERSITY EXTENSION
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OHIO STATE UNIVERSITY EXTENSION
Support for Wind Turbines Based on Residents’ Zip Code of Renewable Energy
73%
48%
16%
30%
11%
21%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Other zipcode 43359
Support/strongly support
Neutral
Opposed/stronglyopposed
General support or
opposition for wind
turbines 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)
-
100,000,000
200,000,000
300,000,000
400,000,000
500,000,000
600,000,000
Mill
ion C
ubic
Feet
(Mcf)
Total Production Shale Production
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OHIO STATE UNIVERSITY EXTENSION
Ohio Oil Production (2000 - 2014)
Source: PUCO (March, 2015)
-
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
Barr
els
Total Production Shale Production
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
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
-
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
2013 2014 2015
Fra
ctionation
–bbl/day
Natu
ral G
as P
rocessin
g M
mcf/
day
Fractionation Natural Gas Processing
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 MarketsDownstream 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
Net Metering
State-developed mandatory rules for certain utilities
No uniform or statewide mandatory rules, but some utilities allow net metering
www.dsireusa.org / March 2015
* State policy applies to certain utility types only (e.g., investor-owned utilities)
Note: Numbers indicate individual system capacity limit in kW. Percentages refer to customer demand. Some limits vary by customer type, technology and/or application. Other
limits might also apply. This map generally does not address statutory changes until administrative rules have been adopted to implement such changes.
Note: Net Metering rules are being actively discussed in over a dozen state public service & utility commissions across the country.
WA: 100
OR: 25/2,000*
CA: 1,000*
MT: 50*
NV: 1,000*UT: 25/2,000*
AZ: 125%
ND: 100*
NM: 80,000*
WY: 25*
HI: 100*
CO: 120%*
OK: 100*
MN: 40
AR: 25/300
MI: 150*WI: 20*
MO: 100
IA: 500*
IN: 1,000*IL: 40*
FL: 2,000*
KY: 30*
OH: no limit*
GA: 10/100
NC: 1,000*
VA: 20/1,000*
NE: 25
KS: 15/100/150*
ME: 660*
AK: 25*
State: kW limit residential/ kW limit nonresidential
U.S. Territories:American Samoa: 30
Guam: 25/100
Puerto Rico: 25/1,000/5,000
Virgin Islands: 20/100/500
LA: 25/300
44 States + DC,AS, Guam, USVI, & PR
have mandatory net
metering rules
DC
WV: 25/50/500/2,000
VT: 20/250/2,200
NH: 1,000
MA: 60/1,000/2,000/10,000*
RI: 5,000*
CT: 2,000/3,000*
NY: 10/25/500/1,000/2,000*
PA: 50/3,000/5,000*
NJ: no limit*
DE: 25/100/2,000*
MD: 2,000
DC: 1,000/5,000/120%
SC: 20/1,000*
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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 KentOne 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
energizeohio.osu.edu
David Civittolo
OSU Extension Field Specialist, Community Economics
comdev.osu.edu/programs/economic-development/business-retention-expansion