$Dollars from Sense The Economic Benefits of Renewable Energy
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$ Dollars from Sense The Economic Benefits of Renewable Energy
Introduction
What is Renewable Energy? The Purpose of This Document
R F
enewable energy sources are or decades, proponents of
either continuously resupplied renewable energy technologies
by the sun or tap inexhaustible have focused on their indirect
resources, such as geothermal energy. economic benefits, such as the reduced
In contrast, fossil fuels Ñ oil, coal, health and environmental restoration
and natural gas Ñ form so slowly in costs stemming from their lower
comparison to our rate of energy use environmental impact. These argu-
that we are essentially mining finite, ments have been acknowledged as
nonrenewable resources and will legitimate, but have had little real
eventually exhaust quality supplies. effect on energy resource and policy
The use of modern renewable decisions, partly because they are
energy technologies produces less difficult to quantify.
pollution than burning fossil fuels Ñ This document illustrates the direct
especially with respect to net emissions economic benefits, including job
of greenhouse gases. Indigenous renew- creation, of investing in renewable
able energy resources also represent a energy technologies. Examples are
secure and stable source of energy for drawn from across the nation, showing
our country and a potential source of the value of generating electricity from
jobs and economic development. indigenous renewable resources in
Renewable energy can be used in a several regions. Each of the most
variety of ways. This document focuses promising renewable energy technolo-
on the use of renewables (except gies is examined in turn, emphasizing
hydropower) to generate electricity. the impact that individual projects
Renewable transportation fuels and have had on the state and the local
Òdirect useÓ applications Ñ such as community.
water and space heating with biomass, This document quotes actual employ-
solar, or geothermal energy; and the ment numbers at existing facilities.
mechanical pumping of water with Where available, total national employ-
wind energy Ñ are not addressed in ment for that sector of the renewables
this document. industry is also cited. There are few
In some cases, the cost of electricity estimates of the potential for future job
produced from renewable sources is creation within any particular sector,
approaching the cost of generating due to the difficulty in making accurate
power from conventional sources, and projections.
each renewable energy technology
is economically feasible in certain
applications.Contents
ÒThe fate of people on Earth depends on
whether we can employ efficient and
renewable energies. We need to lay big
plans for small technologies.Ó
— David Freeman, former head of the New York Power Authority, Tennessee Valley Authority,
Sacramento Municipal Utility District, and the Lower Colorado River Authority,
speaking at the World Renewable Energy Congress in June 1996
Importing Energy, Exporting Jobs . . . . . . . . . . . . . . .2
Electricity From Biomass . . . . . . . . . . . . . . . . . . . . .4
Wind Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
Photovoltaics: Electricity from Sunlight . . . . . . . . .12
Solar Thermal Electricity:
Power from the Sun’s Heat . . . . . . . . . . . . . . . . . . .16
Geothermal Energy: Power from the Earth . . . . . . .18
For More Information . . . . . . . . . . . . . . . . . . . . . . .20
Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
Dollars from Sense 1Importing Energy, Exporting Jobs
According to the Wisconsin Energy
E
very year, Americans spend
about $1900 per person on Bureau, ÒInvestment in locally avail- The Multiplier Effect:
energy purchases, which is able renewable energy generates more A Little Goes a Long Way
about 8% of the average personÕs total jobs, greater earnings, and higher
expenditures on goods and services in output ... than a continued reliance The multiplier effect is sometimes called
a given year. Of this amount, approxi- on imported fossil fuels. Economic the ripple effect, because a single expendi-
mately 40% goes to pay for electricity. impacts are maximized when an ture in an economy can have repercus-
Energy purchases represent a signifi- indigenous resource or technology can sions throughout the entire economy,
cant cost to society Ñ nationally and replace an imported fuel at a reason- much like ripples spreading across a
locally Ñ and it is important to spend able price and when a large percentage pond. The multiplier is a measure of how
energy dollars in a way that strength- of inputs can be purchased in the much additional economic activity is
ens the economy rather than deple- state.Ó The Bureau estimates that, gen-erated from an initial expenditure.
ting it. overall, renewables create three times
as many jobs as the same level of In the town of Osage, Iowa, for example,
In many cases, energy dollars leave $1.00 spent on consumer goods in a local
the community, going to regional spending on fossil fuels.
store generates $1.90 of economic activity
utilities or suppliers of oil or natural For states and municipalities with
in the local economy. This occurs as the
gas. Once those dollars have been insufficient conventional energy
dollar is respent; the store pays its
spent on importing energy into the reserves, there is a simple trade-off:
employees, who purchase more goods,
community or state, they are not import fossil fuels from out-of-area
all with the same original dollar.
available to foster additional economic suppliers, which means exporting
activity. Because every dollar spent energy dollars ... or develop indigenous The multiplier effect causes different types
on imports is a dollar lost from the renewable resources, which creates of economic benefits as a result of invest-
local economy, these energy imports jobs for local workers in the construc- ments in renewable energy technologies:
represent a substantial loss to local tion, operation, and maintenance of
companies in terms of income and jobs. nonfossil power plants and associated Direct effects — These are on-site jobs
The challenge is to meet our insatiable industries. and income created as the result of the
appetite for energy while supporting The advantages of renewable energy initial investment; the people who
local economic development. investments are becoming increasingly assemble wind turbines at a manufactur-
clear, even in areas that have tradition- ing plant, for example.
ally favored fossil fuels. ÒTexas is now
A growing number of state and Indirect effects — These are additional
a net energy importer,Ó said Texas
local governments are investigating jobs and economic activity involved in
Land Commissioner Garry Mauro,
supplying goods and services related to
ways to keep their energy dollars at speaking at the dedication of the state's
the primary activity; people such as the
home Ñ for many, the answer lies first commercial wind-power project
banker who provides loans to the plant’s
in November 1995. ÒWe can accept our
in renewable energy investments. owners, and the workers who supply parts
status as a net energy importer ... or we
and materials to the turbine assemblers.
can face the challenge head on and
How Renewable Energy serve as a model to others by embrac- Induced effects — This is employment
ing new ideas such as wind power and and other economic activity generated by
Investments Help the Economy solar energy Ñ ideas that will make the respending of wages earned by those
There are two main reasons why Texas the leader in renewable energy directly and indirectly employed in the
renewable energy technologies offer an development, energy-efficient building industry; jobs created by the manufactur-
economic advantage: (1) they are labor- techniques, job creation, and environ- ing plant workers spending their wages
intensive, so they generally create more mental health.Ó at the local grocery store, for example.
jobs per dollar invested than conven- The renewable energy industry
tional electricity generation technolo- provides a wide range of employment
gies, and (2) they use primarily opportunities, from high-tech manu-
indigenous resources, so most of the facturing of photovoltaic components
energy dollars can be kept at home. to maintenance jobs at wind power
2 Dollars from SenseÒA state that imports most of its
fossil fuel can receive a substantial The Lost Potential of Energy Dollars
employment and earnings benefit Several states have made efforts to quantify their electricity and total energy expenditures
from developing indigenous — a difficult task. Here are some examples of states that import energy.
renewable resources.Ó
• Massachusetts imports 97% of the energy it uses. In energy dollars this translated
— Powering the Midwest: Renewable Electricity for
the Economy and the Environment, a 1993 report
to $11 billion in 1992. The state imports 15% of the electricity it consumes.
by the Union of Concerned Scientists • In 1990, Iowa imported nearly 97% of its energy at a cost of about $5 billion.
plants. Through the multiplier effect • Wisconsin imports 94% of its energy. In 1992, more than $6 billion of Wisconsin’s
(see sidebar, left), the wages and $8.1 billion total energy bill left the state — approximately $1200 per resident. In its
salaries earned by industry employees 1994 study, The Economic Impacts of Renewable Energy Use in Wisconsin, the
generate additional income and jobs in Wisconsin Energy Bureau reported that “The energy dollar drain from the state due to
the local economy. fossil fuel imports has hindered additional economic growth and job development.”
The taxes paid by renewable energy • New York depends on out-of-state sources for nearly 92% of its energy requirements.
companies also strengthen the areaÕs Each New Yorker sends an average of $1000 each year out of state to purchase energy.
economic base, ultimately reducing the
• Rhode Island imports more than 90% of its electricity from other states.
burden on individual taxpayers in the
community; in fact, generating power • In 1990, Missouri spent $9.7 billion on energy, 70% of which left the state to pay for the
from renewable resources contributes energy. This equates to $6.8 billion, or more than $1300 for each Missouri resident.
more tax revenue than generating the • In 1992, Maine residents and businesses spent approximately $2.8 billion on energy,
same amount of power from conven- $2200 for every person in the state. Maine imports about 25% of its electricity.
tional energy sources. As an example,
the California Energy Commission has • Hawaii: 85% of the state’s electricity is generated from imported fuel oil, compared with
found that solar thermal power plants only 3% for the United States as a whole.
yield twice as much tax revenue as • In 1990, the 100,000 residents of the U.S. Virgin Islands spent about $40 million on
conventional, gas-fired plants. electricity, 65% of which left the Virgin Islands economy. More than $26 million drained
In some cases, renewable energy out of the territory’s economic bucket that year for energy purchases, equivalent to
investments can enable individuals, about $260 per resident.
companies, or communities to reduce • Minnesota imports 15% of the electricity it consumes.
their utility bills. For example, schools
can cut costs by using wind power (see • Oregon imports 11% of its electricity from other states.
page 10), and electric cooperatives can • Despite extensive oil reserves, even Texas is now a net energy importer.
provide cheaper electricity to members
with photovoltaics (see page 15).
Although the local economic are exported to industrializing nations. ÒEvery year, people, companies and
benefits associated with renewable The lack of adequate fossil-fuel governments in the [Midwest]
energy investments are evident, it is reserves in many of these countries,
also important to note that, in the short combined with their lack of extensive
region spend over $100 billion on
term, increased reliance on in-state electricity grids, makes renewable energy in all its forms Ñ electricity,
energy resources could reduce the energy technologies an increasingly fuel oil, gasoline, coal and others.
income of energy-exporting states. In popular choice for power generation. This amounts to about $1900 for
the long term, however, the advantages The growing demand for electricity in
every adult and child, or roughly
of developing renewable energy developing nations can continue to
technologies go far beyond the local create jobs for U.S. workers Ñ as long 10% of average personal income.Ó
economy Ñ they benefit the country as as the United States maintains a — Powering the Midwest: Renewable Electricity
for the Economy and the Environment,
a whole. The United States leads the competitive position in foreign markets
Union of Concerned Scientists, 1993
world in manufacturing renewable by continuing to invest in renewable
energy power systems, most of which energy technologies at home.
Dollars from Sense 3Electricity from Biomass
Overview
B
iomass is a general term for all
of the EarthÕs plant and animal
matter. In the renewable energy
industry, however, biomass usually
refers to: (1) energy crops grown
specifically to be used as fuel, such
as fast-growing trees; (2) agricultural
residues and by-products, such as
straw, sugarcane fiber, and rice hulls;
and (3) residues from forestry, con-
struction, and other wood-processing
industries. (Note: As defined here,
Northern States Power/PIX00240
biomass does not include municipal solid
waste or landfill gas.)
Biomass currently accounts for
around 1% of total U.S. electric gener-
ating capacity, or 8% of the countryÕs
renewable-source generating capacity.
In 1995, there was approximately
7700 MW of grid-connected biomass The biomass power industry creates thousands of jobs in fuel production and
power capacity in the United States. harvesting for rural workers, such as this grapple operator on a tree farm in
According to a 1992 study by Oregon.
Meridian Corporation and Antares
Group Inc., the biomass power gen- 25% of MaineÕs electricity and supports Everyone’s a Winner
eration industry employs more than 2780 jobs in wood harvesting and
The Fairfield Energy facility provides
66,000 people nationwide. In 1992, the transport, power plant construction
approximately 140 jobs (38 at the plant
industry created more than $1.8 billion and operation, and associated retail
and about 100 in wood harvesting) and
in personal and corporate income, and and service sectors. The industry has
more than 30% of the townÕs property
generated more than $460 million in nearly 500 MW of installed capacity
tax base. With a population of 4000,
federal and state taxes. in 21 generating plants.
and only about 1270 jobs available in
Because biomass power activities
the area, the biomass plant is vital to
tend to be concentrated in rural areas, ÒSmall power producers ... have the health of the townÕs economy. ÒWe
this technology offers a great opportu- been one of MaineÕs largest sources consider ourselves lucky to have the
nity for revitalizing rural America.
of new employment and energy plant,Ó acknowledged a repre-
The U.S. Department of Energy (DOE)
investment.Ó sentative of the Fort Fairfield Chamber
estimates that a concerted effort to
— State Planning Office of Maine, quoted in Energy of Commerce.
develop dedicated energy crops for
Choices Revisited: An Examination of the Costs The biomass plant has generated
biomass power plants could generate and Benefits of Maine’s Energy Policy, substantial economic benefits for the
120,000 new jobs over the next 15 years. Mainewatch Institute, 1994
local and state economies, both during
Success Stories In rural districts with limited
initial construction and since. The
facility was completed in 1988 after a
employment opportunities, a single
Maine: Leading the Nation two-year construction period. During
power plant can have a critical impact
Maine obtains a greater percentage of this phase, the plantÕs developers spent
on the local economy. This is the case
its electricity from nonhydro renewable more than $8 million in the state of
with Fairfield Energy Venture, a 32-MW
sources than any other state. The Maine, including $5.3 million paid in
biomass plant located in the town of
biomass power industry generates wages to local workers for on-site
Fort Fairfield in northeastern Maine.
assembly and construction.
4 Dollars from SenseIn 1992, Fairfield Energy Venture benefits to local restaurants, gas
had annual operating expenses of stations, motels, and food stores.Ó How It Works
$12 million, $9.4 million of which was Fairfield Energy Ventures is also
spent in the stateÕs economy. Of the expanding the skill base of local Because plants and trees use sunlight to
in-state expenditures, more than workers. Only one of the plantÕs grow, biomass energy is actually a form
$7 million stayed in Fort Fairfield and employees had any previous experi- of stored solar energy. Biomass energy
the surrounding area. This includes ence working in a power plant. The can be converted to electricity in two
$1.7 million in wages and salaries paid Mainewatch Institute study quotes ways:
to plant employees and more than Peter Powers, the plantÕs general
Direct combustion involves burning the
$938,000 paid to the local and state manager, as saying, ÒAll but one of our
biomass in a boiler to heat water, then
governments in property taxes, fees, employees were Maine residents prior
running the resulting steam through a
and licenses. to being hired by the plant and all
turbine — the same process used in
A 1994 Mainewatch Institute study live in close proximity to the plant.Ó
conventional coal-fired plants. Virtually
found that, ÒFrom the start of the Seven of the employees (including
all biomass electric plants today use
project it appears the town and local the general manager) had previously
conventional steam turbines.
area have been winners. Local trades- worked in the navy, and were able to
people were employed in the on-site make use of their training in steam Gasification involves converting the solid
construction; parts and supplies were propulsion. Many of the plant workers biomass to a gas that is then burned in a
purchased from local outlets whenever were hired at entry-level positions, and combustion turbine — potentially much
possible; and the influx of engineers, the company is committed to training more efficient, but still in the demonstra-
consultants, and temporary out-of- them to help ensure job advancement tion stage of development.
town workers provided substantial and employment stability.
Warren Gretz, NREL/PIX03744
Harvesting alfalfa in Minnesota. Damaged crops can still be used as a biomass feedstock.
Dollars from Sense 5Income from Energy Crops The Niagara Mohawk Power Bad Weather? Good News ...
Corporation and the State University
To expand power production from The agricultural community of Granite
of New York (SUNY) are members of a
biomass substantially beyond current Falls, Minnesota, will soon become
consortium that is developing willow
levels will require the cultivation of the home for a new 75-MW biomass
energy crops on 1000 acres of farmland
dedicated energy crops. New York has gasification power plant that will be
around Tully, New York. This is the
become the focus for a new initiative built just outside of town. The plant
first stage of a plan to convert over
to develop agricultural feedstocks for will employ 100 full-time staff and will
40,000 acres in central and western
energy production. This should help to create an additional 60-80 part-time
New York to growing willow trees for
stabilize the revenue stream for partici- jobs for people handling the biomass
energy by 2010. Once it is fully imple-
pating farmers: 26 area farmers have feedstock.
mented, the plan is expected to create
expressed a desire to diversify their
300 rural jobs and generate energy
crop production to include energy ÒItÕs going to generate jobs in the
crop fuel sales of almost $20 million
feedstocks. community Ñ the plant itself Ñ
annually.
Each New Yorker sends an average but the other part of it is that itÕs
of $1000 each year out of state to economic development with the
purchase energy. In 1992, only one half farmers.Ó
of New YorkÕs farmers were able to — Farmer Dick Jepson, in an interview for the 1996
earn a profit on farm operations. A DOE video, Growing America’s Energy:
ÒhomegrownÓ willow crop bought The Story of Biomass Power
by power companies will help keep
energy dollars in the state and generate A small group of area farmers and
new income streams for farmers. business people are developing alfalfa
as an energy crop for the power plant.
According to Dan Robison, a
Alfalfa is normally grown primarily for
researcher at SUNYÕs Syracuse College
use as cattle feed. When bad weather
of Forestry, ÒThere are a lot of farmers
destroys the crop, it can no longer be
in New York who are struggling to stay
fed to cattle, but the damaged stems
in business. There are a lot of farmers
can still be used as a feedstock for
throughout the region who are essen-
electricity production.
tially working for free, on a break-even
basis, and any new opportunities Ñ ÒWeÕll have a ready market for the
theyÕre interested.Ó stems,Ó said John Moon, a local farmer.
ÒA brown stem has just as much
Hybrid willow species are being
quality for gasification as a nice stem
Warren Gretz, NREL/PIX00308
developed by the project partners to be
that hasnÕt been rained on.Ó
fast-growing and resistant to drought
and disease. Male willow trees can In good years, the alfalfa crop will
thrive in soils and climates less suitable be separated into stems and leaves. The
for other crops. These trees require leaves will be sold as cattle feed, and
minimal application of fertilizer and the stems will be sold to the biomass
insecticides and will assist in the plant. So in addition to producing
Most agricultural wastes can be control of soil erosion. Because willow clean energy for Minnesotans, the plant
used to generate electricity, is planted once, then repeatedly provides a second source of income for
including the mountains of fibrous harvested from the same plant for up area farmers.
material left over from processing Because biomass plants can use a
to 20 years, soil erosion is minimized
sugarcane crops such as this one in
compared to traditional row crops. wide range of organic material, the
Hawaii. Selling power to electric
ÒThis is ... a very good alternative technology is suitable for generating
utilities helps to improve the
economics of sugar production for farm crop ... a cash crop,Ó said Larry power in virtually any agricultural
local companies. Abrahamson, another of SUNYÕs region Ñ as far east as Maine, or as
researchers. far west as Hawaii.
6 Dollars from SenseElectricity from Sugarcane
For a state such as Hawaii, which is
currently forced to generate most of its
electricity from expensive, imported
fuel oil, renewable energy resources are
particularly valuable. Approximately
8% of HawaiiÕs electrical power is
already being generated from biomass,
the stateÕs largest source of renewable
energy, and research is under way to
make better use of this resource.
Most of HawaiiÕs biomass plants
use bagasse, the fibrous waste from
sugarcane processing. Sugar is
HawaiiÕs most important agricultural
export, and local sugar mills burn
bagasse to provide thermal power to
the mills and electricity for sale to
utility grids. These mills use direct-
fired steam-turbine generators.
Because biomass gasifiers are more
efficient, they are potentially capable
of producing 50% more electricity from
Warren Gretz, NREL/PIX03810
the same amount of bagasse when
compared with systems that burn the
bagasse directly. This has prompted the
State of Hawaii to explore gasification
technology in partnership with DOE
and an industry research group.
The government-industry joint
Compared to conventional steam turbines, biomass gasifiers are capable of
venture has built an experimental
getting 50% more electricity from the same energy crop. HawaiiÕs first
gasification facility at the Hawaiian
gasification facility, at Paia on the island of Maui, is pictured receiving a
Commercial & Sugar Company mill traditional blessing on dedication day.
in Paia, on the island of Maui. The
facility currently processes almost
100 tons of bagasse per day into biogas. The experiment shows how the
Jerry Smith, the manager of the project, sugar mills can generate more electric-
knows how important electricity pro- ity with the same resources and make
duced from biomass is to Hawaiians. more money from selling power to the
utility; this benefits the local sugar
ÒIt keeps the people on the island industry by helping to keep Hawaiian
sugar competitive in worldwide
working. Plus, with a plant this size,
markets.
youÕre not dependent on importing
oil. And thatÕs a big thing when
youÕre sitting on an island.Ó
— Jerry Smith, Paia gasifier project manager, in
a 1996 interview for Growing America’s
Energy: The Story of Biomass Power
Dollars from Sense 7Wind Power
Success Stories
Renewable Power for the Midwest
Utility-scale generation of electricity
from wind is particularly suited to
the rural areas of the upper Midwest
because of the regionÕs tremendous
wind resources and wide-open spaces.
In 1994, Northern States Power,
MinnesotaÕs largest investor-owned
utility, committed to developing at
least 425 MW of wind energy capacity
by the year 2002. But commercial wind
development on any scale was new
to this region, and there was some
uncertainty about what farmers and
other residents would think about this.
So, in 1995, The Minnesota Project
Warren Gretz, NREL/PIX00349
and the Clean Water Fund conducted
a survey of area residents, primarily
rural landowners, including a group of
farmers from the Buffalo Ridge area of
southwest Minnesota where develop-
ment of a 25-MW wind power plant
The wind industry pays more than $31 million each year in salaries to its was already under way. The response
employees. Most jobs in the industry are related to operating and maintaining was overwhelmingly positive.
existing wind power plants.
ÒWind development is almost
Overview California wind industry pays more unanimously supported by rural
than $31 million each year in salaries residents. They like the environ-
W
ind energy currently
to its employees, and also contributes
accounts for around 2% of
to local economies by paying roughly
mental benefits of wind energy,
the countryÕs renewable- and they love the possibilities of
$6.7 million in property taxes.
source generating capacity. In 1995,
Like biomass, wind is a form of injecting income and jobs into
total wind generating capacity was
renewable energy that has special rural communities.Ó
approximately 1800 MW, most of it
implications for farmers and rural — Harvesting the Wind, a 1995 survey by The
(1600 MW) installed in California.
communities Ñ in this case, mainly Minnesota Project and the Clean Water Fund
The American Wind Energy
because large wind farms have to be
Association (AWEA) reports that, in Of the 149 residents surveyed, 98%
sited in relatively open countryside.
1992, approximately 1260 people were were in favor of developing wind
directly employed in the more than 50 resources for electricity, and 92% felt
ÒAlone among the alternative
firms that make up CaliforniaÕs wind that renewable energy production
industry. When indirect employment energy technologies, wind power
could be a significant part of rural
(about 4350 jobs) is added, the industry offers utilities pollution-free economic development Ñ the reasons
supported around 5600 full-time jobs electricity that is nearly cost- cited included income generation for
in the state that year. Nearly all wind competitive with todayÕs landowners and communities (87% of
industry jobs are related to operating respondents) and job creation (71%).
and maintaining existing wind power
conventional sources.Ó
— Electric Power Research Institute,
plants. According to AWEA, the
quoted on the CREST internet site
8 Dollars from SenseOne of the respondents said that wind ÒNot only do wind farms interfere
energy development would help little with agricultural operations, How It Works
Òmake rural communities and farms
more self-sufficient economically.Ó
the leasing of land for wind The wind blows because of differences
Another said it would Òallow money turbines can be a major benefit in atmospheric pressure created by
to stay at home in the local economy.Ó for landowners.Ó geography and the temperature differ-
Still another said it would Òraise the — Powering the Midwest, a 1993 report ences across the Earth’s surface; these
spirit of the community so people by the Union of Concerned Scientists temperature variations are caused by
stay.Ó variations in the amount of sunshine
Although one-time payments for falling on different areas — for this
Extra Income for Landowners wind rights have been made, wind reason, wind is considered an indirect
Although utility-scale wind projects development companies typically offer form of solar energy.
appear to take up a great deal of land, lease arrangements under which the
the wind turbines themselves occupy dollar amount of payments to Energy is captured from the wind with
only about 5% to 15% of the land area. landowners varies in proportion to the wind turbines. The turbines have rotors
The remaining land can be used for output of the turbines. In 1993, the that usually consist of two or three
other purposes, such as farming, Union of Concerned Scientists found propeller-like blades mounted on a shaft.
ranching, forestry, or for open space. that a Midwestern landowner hosting Wind turbines are mounted on tall towers,
Farmers can graze cattle or plant their a wind farm under a variable-rate plan usually 100 feet or more above the
crops right up to the base of the turbine Òcould expect payments of around ground where the wind is faster and less
towers, making wind power an ideal $40 per acre per year on top of earnings turbulent. When wind makes the blades
complement to agriculture. from farming or grazing,Ó increasing turn, the shaft spins a generator to
produce electricity.
Lloyd Herziger/PIX01686
Utility-scale wind plants coexist very well with ranching and farming. Farmers can graze cattle right
up to the base of the turbine towers, as on this wind farm operated by Zond Systems at Altamont
Pass, California.
Dollars from Sense 9his return on the land Òanywhere from Revenues are expected to total approxi-
30% to over 100%.Ó mately $3 million over the 25-year life
The leasing of land for wind power of the project, or about $120,000
plants pays well in other parts of the annually.
country, too. In California, for example,
the City of Santa Clara leases 640 acres ÒPublic education in Texas will
of land to Zond Systems, Inc., which benefit by receiving millions of
owns and operates a wind farm at dollars in lease money from this
Altamont Pass, one of the largest
project. ... I hope to see more wind
developed wind sites in the United
States. Zond sells the electricity to the power projects on state lands
local utility, Pacific Gas and Electric dedicated to the public schools.Ó
Company, and pays a royalty to the — Texas Land Commissioner Garry Mauro, speaking
city Ñ about $152,000 in 1994 alone. at the dedication of the Culberson County
wind project, November 1995
The existing lease contains a buyout
option for the city, and Santa Clara
At the other end of the scale, a small
may purchase the wind power plant
school district in northwest Iowa is
from Zond once the city has learned
making money from the sale of elec-
enough to be comfortable managing tricity generated by its very own wind
the project. turbine. A project that started out as a
According to William Reichmann, a response to environmental concerns
Jerry Miller, Northern States Power Company/PIX01490
senior electric utility engineer in Santa turned out to have a substantial finan-
ClaraÕs Electric Department, ÒOur lease cial benefit for the local community.
agreement has been lucrative both The project began in 1990, when a
financially and in terms of information group of high school biology students
we gained from the site.Ó In fact, the challenged Harold Overmann, superin-
city has recently signed a lease agree-
tendent of the Spirit Lake Community
ment with Zond for another site that
School District, to find a renewable
shows promise for wind energy
source of energy for the district.
development.
Instead of ignoring them, Overmann
Wind Projects Bring Money took them up on their challenge.
to Schools District staff began a dialog with the
local utility company, Iowa Electric,
Farmers can earn extra income by The Louisville Gas and Electric
leasing land for wind power plants, and investigated various renewable
Company operates a 35-MW wind
such as this one on Buffalo Ridge in energy technologies before deciding
farm in Culberson County, Texas,
southwest Minnesota. on wind power. They then gathered
about 100 miles east of El Paso. The
data on wind speeds at the proposed
Lower Colorado River Authority buys
site and worked hard to find a way to
the electricity generated at the wind
finance the project.
site and distributes it to its customers.
As a result of an innovative partner- Three years later, at a cost of
$238,000, the district installed a wind
ship with the Texas General Land
turbine at the local elementary school.
Office, lease revenues from the wind
A grant from DOE paid for half of the
project go directly into the Permanent
cost and a loan from the Iowa
School Fund, which helps to finance
Department of Natural Resources
public schools and universities in
covered the rest. Since then, the turbine
Texas; in effect, school children are
has been generating 324,000 kWh of
benefiting financially from the wind
electricity annually, worth about
energy harnessed in west Texas.
10 Dollars from Sense$25,000. The elementary school, Once the districtÕs loan is repaid, Not only is the district helping
however, uses only $20,000 worth of all of the electricity generated by the itself, it is also saving the environment,
electricity. Surplus power is sold to turbine will represent a direct saving to just as it set out to do. The electricity
Iowa Electric. With the $25,000 yearly the district and, therefore, local taxpay- generated by the wind turbine replaces
savings, the loan will be completely ers. The money saved can be directed 225 tons of coal and prevents 750,000
paid back within a five-year period. into education. ÒWeÕre using our non- pounds of carbon dioxide emissions
instructional costs for instructional from polluting the air every year.
ÒIÕve never done anything thatÕs costs,Ó said Overmann. ÒWith the ÒWeÕre proud that we are helping to
been so popular in the community.Ó money we save we can fully equip solve the pollution problem,Ó said
— Superintendent Harold Overmann, Spirit Lake a computer lab every year instead of Overmann.
School District, quoted on the Iowa Department paying for electricity.Ó
of Natural Resources internet site
Lower Colorado River Authority/PIX02355
Lease revenues from this west Texas wind farm are used to finance public
education in Texas. The local electric utility leases the land from the state,
paying an average of $120,000 annually.
Dollars from Sense 11Photovoltaics: Electricity from Sunlight
Overview
P
hotovoltaics is a technology in
transition. Photovoltaic (PV)
power has long been cost-
competitive in a variety of off-grid
applications; and as the cost of PV
electricity continues to fall, this envi-
ronmentally benign technology is
becoming increasingly attractive to
electric utility companies. In the United
States, photovoltaics is currently mak-
Sacramento Municipal Utility District/PIX02439
ing the move from primarily remote,
stand-alone applications to utility grid
support.
Acording to the Solar Energy
Industries Association (SEIA), total
grid-connected photovoltaic generat-
ing capacity in 1994 was about 18 MW,
spread across 36 states. Although
stand-alone applications are difficult
to quantify because they are so widely
Through its PV Pioneers program, the Sacramento Municipal Utility District
dispersed, there are an estimated
(SMUD) installs and operates grid-connected, rooftop PV systems on
25,000 homes in the United States customersÕ homes. The program creates jobs in the utilityÕs service area and
powered exclusively by photovoltaics. reduces the need for SMUD to purchase electricity from other regions.
More than 850 U.S. companies are
currently involved in the manufacture
and sale of photovoltaic modules and Success Stories production and 21% of total world
production that year. To help meet
system components. The industry The United States leads the world in
growing worldwide demand, SSI
brings in more than $300 million in photovoltaic research and manufactur-
completed a $3 million expansion of its
revenues annually and employs 15,000 ing, accounting for 43% of global PV
facility in Vancouver, Washington, in
people Ñ most of them in high-quality module production in 1995. The
February 1996. The expansion created
jobs, such as manufacturing, engineer- growing international popularity of
33 new jobs in the Vancouver area, and
ing, sales, installation, servicing, and photovoltaics is creating an increas-
all work on the facility was awarded to
maintenance. ingly buoyant domestic PV industry,
local contractors, further contributing
International sales continue to drive and U.S. manufacturers are scaling
to the local economy. SSI employs a
the PV industry. The largest market up their production facilities to take
total of approximately 350 people at its
for photovoltaics is in the developing advantage of emerging markets. These
facilities in California and Washington.
world, where two billion people still expansions are creating skilled jobs in
Solarex, the second largest PV
do not have electricity in their homes. several states.
manufacturer in the United States, has
Photovoltaic systems are particularly
U.S. Manufacturers Lead the Way been in business for over 20 years.
well suited to this market because of
Siemens Solar Industries (SSI), based During the late 1970s and early 1980s,
their high reliability, their suitability
in Camarillo, California, is the worldÕs as oil prices rose, major oil companies
for applications of almost any size, and
largest manufacturer of photovoltaic began investing in renewable energy
the fact that they do not need costly
cells and modules. In 1995, the com- as a hedge against an uncertain future
transmission lines. Approximately 70%
pany shipped 17 MW of photovoltaic in fossil fuels. Amoco Corporation
of U.S. photovoltaic manufacturing
modules, representing half of U.S. bought Solarex in 1983. Most of the oil
output is exported.
12 Dollars from Sensecompanies concentrated on developing ÒThis dynamic expansion project
their renewable energy for the long- by Solarex will provide the kind of How It Works
term utility market; in other words,
they were not very concerned with
high quality [jobs] that Maryland Photovoltaics is the direct conversion
short-term profitability. Amoco, on the needs to continue building a of light (“photons”) into electricity
other hand, treated Solarex as part of prosperous, vibrant economy.Ó (“voltage”).
the business from the very beginning, — James Brady, Secretary of the Maryland
Department of Business and Economic Development The basic unit of a typical photovoltaic
producing revenues from existing
(Solar Industry Journal, First Quarter, 1996) system is the PV cell, which is made of
products at the same time as investing
layers of semiconducting materials similar
in technology development.
Solarex is also building a $25 million to those used in computer chips. When
Today this strategy is paying off. In
manufacturing plant in James City, incoming photons of light strike atoms
1995, Solarex captured 27% of the U.S.
Virginia. The company was lured in the semiconductor material, some
market (12% of the global market),
there by state incentives specifically electrons are knocked loose, causing
with total sales of $45 million. In
designed to create jobs and strengthen electricity to flow. The greater the intensity
January 1996, the company broke
the stateÕs economy by attracting PV of the light, the more power is generated
ground on a new wing at its manufac-
manufacturing companies to the area. by the cell.
turing facility in Frederick, Maryland,
The new plant will employ a total of
which already employs 240 people. PV cells, which produce DC electricity, are
approximately 80 people.
usually connected together and enclosed
in protective casings called modules.
Photovoltaic systems can provide an
independent, stand-alone power supply
or can be connected to the electrical grid.
In stand-alone applications, modules can
be connected to inverters to supply AC
electricity and to batteries to store
electrical power for periods when the sun
is not shining. Grid-connected systems
both feed power into the grid and use the
grid as a source of backup power.
David Patryas Photography/PIX01545
U.S. manufacturers are expanding their output to meet the growing demand for
PV systems. This creates skilled jobs at production facilities in several states,
such as this thin-film plant in Golden, Colorado.
Dollars from Sense 13Craig Miller Productions/PIX03500 The U.S. PV industry employs 15,000 people, most of them in high-quality jobs, including installation, servicing, and maintenance. This 340-kW system was installed on the roof of the aquatic center for the 1996 Summer Games in Atlanta, Georgia. It is the worldÕs largest building-integrated, rooftop PV system. Another PV manufacturer, Atlantis plantation past behind and heralding encourage,Ó said Ann Broadwater Solar Systems/Solar Building Systems, its future in high technology.Ó Virginia of the Virginia Department of also took advantage of VirginiaÕs has increased its investments in Development. incentives; Atlantis is constructing a science and math education at all Other U.S. manufacturing compa- production facility in Cape Charles that levels, and is looking to attract indus- nies have also been expanding their will create 25 jobs. tries that will provide high-paying operations. Solec International, for According to an August 1995 article jobs for its home-grown graduates in example, the countryÕs third largest PV in The Newport News Daily Press, the fields of engineering, chemistry manufacturer, more than doubled its ÒVirginia, whose economy once was and science. ÒPV is exactly the kind workforce between 1993 and 1996. The rooted in tobacco, is leaving its of industry that Virginia wants to company now employs 130 people. 14 Dollars from Sense
And AstroPower, Inc., a tiny start-up A growing number of electric
venture 10 years ago, now has 145 utilities are also becoming familiar
employees and annual revenues with the advantages of photovoltaic
exceeding $10 million, 80% of which power for remote applications. In 1994,
are from exports. Southern California Edison (SCE)
started an off-grid PV program called
Growing Utility Interest Partnership with the Sun. John Bryson,
According to the Utility PhotoVoltaic SCEÕs chairman, says it is a win-win
Group (UPVG), ÒUPVGÕs market program: ÒHomeowners and busi-
evaluation work has shown that PV nesses in remote locations get clean,
can make a contribution to every utility quiet electricity. Independent contrac-
in every part of the country.Ó UPVG tors get jobs and construction projects.
is a group of more than 80 electric And Edison is able to serve new
utilities formed in 1992 to investigate customers who otherwise have no
utility applications of photovoltaics. dependable source of power.Ó
Today, 39 U.S. utilities are actively
testing grid-connected photovoltaic Saving Money for Ranchers
systems, including CaliforniaÕs Photovoltaics can be a winner for
Sacramento Municipal Utility District rural electric cooperatives. KC Electric
Roger Taylor, NREL/PIX01860
(SMUD), a UPVG member and, with Association, a rural electric cooperative
480,000 customers, the nationÕs fifth in eastern Colorado, is saving its
largest customer-owned utility. members money by providing them
More than half of SMUDÕs projected with photovoltaic power. The associa-
load requirements have been met with tion serves 4000 square miles of prairie
renewable-source electricity, such as with an average of only two customers
the utilityÕs PV Pioneers program, and per mile of distribution line. Every
Worker installing a grid-
energy efficiency programs. SMUD year, winter storms knock out as many independent, PV-powered street
also operates the countryÕs largest PV as 1000 utility poles and 38 miles of light.
power plant, a 2-MW facility on the lines. With replacement costs of $10,000
grounds of the utilityÕs now-closed per mile of line, the association has
Rancho Seco nuclear power plant. been spending up to $380,000 on
These programs have created jobs maintenance every year.
within the utilityÕs service area and The lines provide little revenue.
mean that SMUD has to purchase less About half of the associationÕs cus-
power from other regions. tomers use the electricity primarily to
power small irrigation pumps. In 1990,
ÒOur customers want more from KC Electric began using photovoltaics
us than just a good price; they as a more practical and affordable
alternative to replacing damaged
want long-term reliability, a clean
distribution lines serving remote
environment and local economic livestock wells or extending lines to
development. Solar can help us new well sites. The cooperative can
meet these needs.Ó provide PV-powered water pumping
— Don Osborn, SMUD solar program manager at a cost of $1800 to $6000 per well Ñ
(Solar Industry Journal, Third Quarter, 1995) saving its members thousands of
dollars when compared with the cost
of providing grid electricity.
Dollars from Sense 15Solar Thermal Electricity: Power from the Sun’s Heat
are still operating successfully, produc-
ing more than 90% of the worldÕs solar
thermal electricity and saving the
energy equivalent of 2.3 million barrels
of oil every year.
ÒThe SEGS provide employment
to over 250 skilled operators,
craftspersons, and professionals,
and millions of dollars in contracts
to local vendors.Ó
— KJC Operating Company, which manages five of
Sandia National Laboratories/PIX01332
the SEGS plants (Clean Power Day 1996 prospectus)
In 1991, Luz employed more than
700 people. According to Michael
Lotker, formerly LuzÕs vice president
of business development, each of its
80-MW SEGS plants required about
1 million job hours (500 job years) to
The assembly system used by Luz International for its parabolic-trough construct. Because maintenance of the
generating plants. SEGS solar field is more labor-intensive
than maintenance of a fossil-fuel power
plant, the solar plant pays higher
Overview Success Stories payroll taxes.
S
olar thermal electric systems The three types of solar thermal electric It has been estimated that, over their
provide utilities with a variety technologies Ñ troughs, power towers 30-year life, the operation and mainte-
of modular power options, some and dish systems Ñ are in different nance of each of the 80-MW plants will
of which can be constructed in a stages of development. Troughs have a contribute $11.6 million in taxes to the
relatively short period of time. There proven track record, power towers are local government, $65.8 million to the
is currently about 365 MW of utility- in the demonstration stage Ñ which state, and $228.9 million to the federal
connected solar thermal generating means that they are close to commer- government.
capacity, all of it installed in cialization Ñ and dish/engine systems
California. are still under development. The Solar Two Power Tower
More than 250 people are directly Solar Two, in CaliforniaÕs Mojave
Solar Troughs: Proven Success Desert, is a 10-MW, second-generation
employed in the operation and mainte-
nance of 354 MW of solar thermal Parabolic trough systems have already demonstration project to confirm the
trough systems in California. A fossil- proven themselves in the field. Nine technical and economic viability of
fuel-fired plant producing the same solar electric generating systems power towers. The plant uses a field
amount of electricity would employ (SEGS) totaling 354 MW have been of 1926 heliostats located around a
only about 100 people. A 1994 study operating successfully in California, 300-foot tower to focus solar radiation
by the California Energy Commission some for more than a decade. Their onto a central receiver. Molten salt is
also revealed that solar thermal power availability to produce power when used as the heat exchange and storage
plants yield twice as much tax revenue the sun is shining is greater than 92%, medium, providing up to three hours
as conventional, gas-fired plants a statistic that rivals utility-scale of dispatchable power after the sun
producing the same amount of power plants of any type. goes down.
electricity. The SEGS systems were all built by The project has been financed by a
a private company, Luz International, consortium of electric utilities and
between 1984 and 1991. These systems high-tech companies (led by Southern
16 Dollars from SenseCalifornia Edison) and the U.S. the plantÕs control systems plus a
Department of Energy. The industry maintenance crew consisting of two How It Works
consortium is currently involved in full-time mirror washers and their
discussions about using the experience truck driver, an instrument technician, Unlike photovoltaic systems, which
gained from Solar Two to build a an electrician, and a mechanic. generate electricity directly from light,
commercial 30-100 MW power tower solar thermal power systems use the heat
in Nevada, a project that would create Dish/Engine Systems: from the sun’s rays to generate power.
many new jobs.
Future Opportunity Reflective surfaces concentrate the sun’s
Although dish/engine systems are rays to heat a receiver filled with oil or
ÒSolar Two represents both a new still under development, the prospects another heat-exchange fluid. The heated
source of clean power for California for this technology look promising. fluid is then used in some form of heat
The systems are transportable and engine to generate electricity. Mechanical
and neighboring states, and a new drives slowly turn the reflective surfaces
are appropriate for both on-grid
source of export technology for and remote applications. Science during the day to keep the solar radiation
America and jobs for American Applications International Corporation focused on the receiver. There are three
workers.Ó (SAIC), a solar dish developer, plans main types of solar concentrators used
— John Bryson, chairman of Southern California to produce five precommercial, 25-kW in solar thermal electric systems:
Edison, at the Solar Two dedication in June 1996 systems by 1999. SAIC also expects
to be producing 1000 commercial Parabolic trough systems concentrate
Solar Two gives an indication of the dish/engine systems per year by 2002, solar rays onto a receiver pipe located
range of jobs that would be required creating 500 high-tech jobs at a manu- along the focal line of a curved, trough-
to operate and maintain power towers facturing facility in the Southwest and shaped reflector. The synthetic oil flowing
once they are commercialized. The an additional 1000 jobs at supplier through the pipe is heated to as much as
demonstration project employs nine facilities throughout the United States. 750°F. The hot oil is used to boil water to
full-time staff: three people to operate make steam, which runs a conventional
steam turbine to generate electricity.
Power towers, also called central
receivers, use a field of sun-tracking
mirrors (heliostats) to reflect solar
radiation onto a receiver that sits on top
of a tall tower. The fluid in the receiver
is heated to as much as 1050°F before
being passed through a heat exchanger
to produce the steam used to generate
electricity.
Parabolic dish systems are similar to
trough systems except that they use a
dish-shaped reflector. The dish concen-
trates solar radiation onto a receiver
Warren Gretz, NREL/PIX02407
mounted at the focal point of the dish,
heating the receiver fluid to as much as
1500°F. Instead of boiling water to run a
steam turbine, most dish systems today
generate electricity by using the hot fluid
to run a Stirling engine mounted at the
Solar Two technician Hugh Reilly inspecting one of the 1926 heliostats dish’s focal point.
(mirrors) that track the sun during the day. Power towers provide a variety of
jobs in systems operation and maintenance.
Dollars from Sense 17Geothermal Energy: Power from the Earth
Overview
G
eothermal power is a com-
mercially proven renewable
resource. Geothermal generat-
ing capacity in the United States is
currently about 2300 MW, distributed
among baseload power plants located
in four states Ñ California, Nevada,
Utah, and Hawaii. Geothermal energy
accounts for around 2% of the coun-
tryÕs renewable-source electric generat-
ing capacity.
In 1996, the U.S. geothermal energy
industry as a whole provided about
12,300 direct domestic jobs, and an
additional 27,700 indirect domestic
jobs. The electric generation part of
the industry employed about 10,000
people to install and operate geother-
mal power plants in the United States
and abroad, including power plant
construction and related activities such
as exploration and drilling; indirect
employment was about 20,000.
Success Stories
Providing Jobs and Tax Revenue
NevadaÕs geothermal plants produce
about 210 MW of electricity, saving
energy imports equivalent to 800,000
tons of coal or three million barrels of
oil each year. Although California has
much greater installed capacity,
Nevada, with just over a million
residents, uses more geothermal
energy per capita than anywhere else
in the country.
Taxes received from geothermal
operations are a significant source
Jeff Hulen/PIX04133
of revenue for NevadaÕs local and
state governments. In 1993, NevadaÕs
geothermal power plants paid $800,000
in county taxes and $1.7 million in
The drilling of production wells, such as these at The Geysers (above) and property taxes. In addition, the U.S.
Imperial Valley (opposite) in California, accounts for a third to a half of the Bureau of Land Management collects
cost of a geothermal project. About 10,000 people are directly employed in the nearly $20 million each year in rent
geothermal electric industry. and royalties from geothermal plants
18 Dollars from SenseMost of the electricity produced
from the Coso geothermal field comes How It Works
from power plants located on U.S.
Navy land near China Lake in Inyo Geothermal (“Earth-heat”) energy comes
County. Tax revenues paid to Inyo from the residual heat from the Earth’s
County by CalEnergy amount to more formation and from the radioactive decay
than 20% of the countyÕs annual of atoms deep inside the Earth. This heat
income. In addition, the Navy gets is brought up to the Earth’s crust by
royalties and cheaper electricity from molten rock (magma) and by conduction
the plants; in one year alone (1993), the through solid rock. There it raises the
Navy saved $4.2 million in electricity temperature of groundwater trapped in
costs, which equates to a one-third the fissures and pores of underground
reduction in the total electricity bill for rock, forming zones called hydrothermal
the China Lake Naval Air Weapons reservoirs. Geothermal power plants are
Station. driven by hot water and steam produced
from wells drilled into these hydrothermal
Warren Gretz, NREL/PIX0045
Displacing Imported Fuel Oil resources.
in Hawaii
Hawaii has no conventional energy In most geothermal power plants, the
resources and is forced to import steam from hydrothermal reservoirs is
virtually all of its energy, including used to generate electricity by spinning a
every drop of oil. Fully 85% of the turbine generator directly; in others, the
Geothermal production well at stateÕs electricity is generated from geothermal hot water is used to vaporize
Imperial Valley, California. petroleum products, primarily fuel oil, a working fluid that boils at a low temp-
compared with only 3% for the United erature. This vapor is then piped to a
States as a whole. Importing oil repre- turbine to generate electricity.
producing power on federal lands in
sents a significant drain on the stateÕs
Nevada Ñ half of these revenues are Potential geothermal energy reserves are
economy, and creates a strong incen-
returned to the state. so large that they are considered inex-
tive to develop domestically available
haustible. Nevertheless, the fluid in
renewable energy resources.
ÒNet proceeds tax, property tax and individual hydrothermal reservoirs can be
Geothermal energy has been identi- depleted to the point where the reservoir
county tax payables have increased fied as perhaps the best near-term becomes economically unproductive. For
for geothermal plants throughout indigenous resource to meet the energy this reason, sustainable use of specific
the state, especially in rural areas.Ó needs of the Òbig islandÓ of Hawaii. A hydrothermal resources always requires
— Thomas Flynn, University of Nevada single 25-MW geothermal plant on the the reinjection of water into the under-
(Geo-Heat Center Bulletin, May 1996) island produces 19% of the baseload ground reservoir to maintain pressure.
needs of the Hawaiian Electric Light Injection of fluids from the Earth’s surface
The California Energy Company Company, replacing 1000 barrels of can also help to increase output from
(CalEnergy) operates geothermal imported fuel oil per day. reservoirs after they have become
power plants in California, Nevada
depleted, a strategy that is being pursued
and Utah. In California, the company ÒThe [Salton Sea Geothermal] at The Geysers field in California.
employs 226 people at its Salton Sea
Project will provide economic
geothermal field in the Imperial Valley
and 121 people at the Coso geothermal benefits to the State of California
field. In 1995, CalEnergy contributed in the form of additional jobs and
more than $45 million to CaliforniaÕs an expanded tax base.Ó
tax base through income taxes, payroll — David Sokol, CalEnergy chairman
taxes, local (county) taxes and unem- (CalEnergy press release, April 1995)
ployment taxes.
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