Building Plants vs. Buying Power: United States Debate Renewable Energy Strategies

Getting a piece of the renewable energy pie has become a top priority for many states.  Desperately seeking exit strategies for the current economic dolldrums, many states want to actively participate in the post-fossil fuel energy marketplace. Solar, wind and geothermal projects made possible by state and/or federal tax credits, loan guarantees and feed-in-tariff legislation are being built throughout the United States (and in Canada which has a long history of exporting its natural resources to U.S. states).  From a national energy policy perspective, it is clear that some states have significantly more solar or wind energy available to be converted to power than others due largely to latitude and elevation.  Accordingly, a cost/benefit analysis done at the national level informing the decision of where to locate and support solar and wind farms would favor certain states over another. 

However, there are two reasons why renewable energy plant siting is all over the map.  First, many of the best sites for generating renewable power are far from energy-hungry densely populated cities and connecting the dots with lots of long distance tranmission lines won't come cheap (approximately $1M per mile).  Second, the states that make up the United States of America have their own thoughts on the extent to which they want to be suppliers, not just consumers, of  renewable energy. 

This debate reaches from coast to coast.  On the West Coast is California, a large sunny state with a long coastline where this question has caused a deep rift.  Rejecting legislation that would have required renewable energy quotas to be filled largely by in-state power plants, Governor Schwarzenegger issued an executive order giving out-of-state power plants equal footing with in-state plants to compete to supply clean energy to California's consumers to meet the quotas.  The governor, who continues to face an uphill battle to bring his state's fiscal crisis under control, recognizes that open competition is needed to ensure that the state and its citizens do not pay more than necessary for renewable energy.  In this example, cost effectiveneness of renewable energy trumps the potential additional jobs specific to the renewable energy industry that favoring in-state would have created.

On the East Coast is a collection of states including Maine, Maryland, Massachusetts, New York, New Jersey, North Carolina and Rhode Island, that want to have their renewable energy and produce it too.  For solar power, New Jersey ranks #2 in the country in the number of distributed residential and commercial solar power systems installed.  The state whose motto is "Liberty and Prosperity" made this happen by offering generous tax credits and tariffs and aggressive renewable energy standards, despite having less sunshine relative to other parts of the country.  For wind power, the states listed above are investing in and investigating large wind turbine farms, in addition to distributed solar.  Looking beyond elevated land where the wind is sufficiently strong and steady, these states are pursuing offshore wind farms.  Unlike in other parts of the country, sections of the state coastal waters are sufficiently shallow that wind turbines can be built in waters up to 60 feet.  For deeper state waters, taller or floating plaforms like those used for oil exploration and drilling are being investigated.

Why are East Coast states so interested in building their own offshore wind power? One reason is that wind velocity and frequency tend to be significantly higher over water than over low elevation land.  This means that wind turbines located offshore will generate more wind power output than onshore turbines, except for turbines located on especially windy mountain tops.  A second reason is that offshore wind farms are located at a distance from private property owners whose "not in my backyard" (aka NIMBY) opposition can delay or even prevent construction of wind farms. 

However, the promise of offshore wind power needs more time to prove itself.  Unlike land-based wind power which relies on mature, proven technologies that have been demonstrated to be cost-efficient in large scale farms operated by or for utilities, offshore wind power's cost-effectiveness is less clear, especially in deeper waters.  While offshore turbines do generate greater power output, there haven't been enough such projects to demonstrate that they are cost effective given the much higher construction and maintenance rates involved in operating mechanical and electricall apparatus in a hostile, corrosive sea environment.  In addition, property owners and others have successfully caused delays in offshore wind projects such as Cape Wind by alleging that turbines could cause harm to values of property with turbines visible in the horizon (aka "not in my ocean view" or NIMOV) or to birds or other marine wildlife.

As Eastern states pursue their own wind and solar farms, they must be realistic about the benefits of building vs. buying renewable energy.   Jobs involved in manufacturing, constructing and operating renewable energy plants can help reduce unemployment.  Once the systems are in place, however, the numbers of jobs dedicated to maintaining solar, wind or geothermal systems are relatively small.  States should keep their eyes on the main objective:  providing clean, renewable energy to government, commercial and residential customers.  The best strategy?  Build energy plants when and where it really makes sense and buy the rest of the energy at the best long term price.

Thoughts?

Where There's a Will, There's a Way: Fighting An Uphill Battle in a Flat World

Parents like to joke about how much harder things were back when they had to walk uphill both ways to school.  That feeling of facing an uphill battle in every direction is unfortunately all too common for today's job seekers.  High and still rising unemployment rates are motivating workers to seek opportunities in emerging green industries that represent the future more than the past.  However, firms pursuing these growth opportunities are reluctant to hire workers with skills and experience acquired in other industries.
  
Bridging this gap between workforce skill supply and demand must be part of the strategy for competing in a flat world where products and services move across national borders. At the risk of over generalization, the overall strategy for nations (as well as states and companies for that matter) can be summed up as follows:

1. wit:  witty countries have innovative research, development, manufacturing, training, and business models.  These tend to start off strong once they get started and then lose their lead to the second group. 
2. wages:  countries with large skilled workforces earning relatively low wages tend to overtake the first group by offering lower costs of production.  
3. will:  willful countries with the ambition and action plans tend to find success while the first group is still discussing its options and the second group is waiting for a mass market to develop.

To give this analysis legs, I'll name names.  The United States, Britain, France, Germany, Spain (and other Western European countries), Canada, and Japan tend to represent the first group.  China, India, Korea, Mexico, Russia and other Eastern European countries tend to represent the second group.  Membership in the third group varies depending on the industry and the particular political will and insight present at a given time.  For example, Germany in the solar energy industry is a shining example of a country that demonstrated its will to lead through very generous subsidies for installing solar systems despite its limited sunshine.  After years of success, Germany is having to deal with competing countries with lower costs (China) and more sunshine (parts of the United States and Africa).

France in the electric vehicle industry has stated its will to promote its workforce and auto makers as leaders in this emerging space by articulating an ambitious, comprehensive plan involving both sticks (carbon taxes) and carrots (subsidies for makers and buyers) to make it happen.

Does your country's leadership have the wit, wages and/or will to emerge from the global recession with its economy and workforce intact?

Thoughts?