The Promise of Green Energy
By John Bebow - February 15, 2008
The green energy economy is real in Michigan -- an it is worth thousands of jobs, argues guest columnist Rob Gramlich.
The Promise of Green Jobs
By Rob Gramlich, Policy Director for the American Wind Energy Association
Many are intrigued by Governor Granholm’s statement that the renewable energy industry has the power to create thousands of jobs in Michigan. Endowed with numerous renewable resources, a developed manufacturing base, and an arsenal of well-trained individuals,
Michigan can realize substantial job creation if it commits to a state-wide renewable electricity policy.
Michigan has made a commitment to work with other Midwestern states in generating 10% of the region’s electricity from renewable sources by 2015. This agreement holds great promise for the Midwest, but adopting the same standard at the state level would bring more substantial economic growth to
Michigan. A coalition of 77 groups from the business, manufacturing, research, environmental, agriculture and entrepreneurial communities, all advocate a state-specific standard. Demonstrable job creation in Michigan A Renewable Energy Policy Project study found that 2,050 firms in
Michigan could benefit from 34,777 new jobs spread across the wind, solar, biomass, and geothermal industries, with 24,350 being tied to the wind industry. As
Michigan ranks 14th out of the 50 states in abundance of wind resources, the state is already seeing the manufacturing sector reap the benefits of the wind industry’s record growth.
Pre-existing manufacturing facilities are transitioning some or all of their work to accommodate renewable energy industry components. An example of a Michigan company adjusting its manufacturing specialty altogether is Great Lakes Gear Technologies Inc., located in
Canton
Township. While this company used to manufacture gears mainly for the automotive industry, it is now making gears primarily for wind turbines. Some
Michigan companies are adding production of renewable energy components while continuing their original product lines. Ann Arbor Machine Co., which has traditionally made large machine tools for the auto industry, will begin to manufacture gear boxes for wind turbines over the next 18 months. The transition is expected to bring at least 60 new people to the company's current base of 150 employees. Dowding Industries, of Eaton Rapids, which specializes in precision run manufacturing of progressive die stampings, metal fabrications, and welded assemblies, is investing $10 million in expanding their facility to accommodate wind industry component production. They plan to hire 50 employees to be involved in their expanded business sector. Creative Foam, a business which currently
designs and manufactures foams and plastics for customers in the automotive, medical and composite markets, is investing $1.2 million in its Alloy Business Unit in Fenton, MI, to branch into the wind energy business. Also, K & M Machine Fabricating, located in Cassopolis, is taking on a $20 million expansion project to broaden its machining, fabricating, burning and assembly functions to meet wind industry needs. This company anticipates hiring 100 new employees to take on its broadened specialization. In addition to the continued manufacturing employment growth that a 10% by 2015 Renewable Electricity Standard (RES) would inevitably bring,
Michigan also has the potential to expand its research and development jobs.
Michigan’s universities produce graduates with exceptional engineering backgrounds who would be well-suited to work in the renewable energy industry. Governor Granholm has already asked for federal funding to support the development of a national center in
Michigan to study and promote alternative energy technologies. Also, the Danish wind energy company Vestas has announced that it plans to establish a research center somewhere in the
United States near a large university in 2009. With the brain power already available at
Michigan’s universities, the state would be a desirable location for such a facility. A research center would hire these graduates, give the scholars good reason to remain in
Michigan, and create a substantial base for the local economy. Moving forward with renewables These examples foreshadow the acceleration the state economy would experience if Michigan joined 25 of its fellow
U.S. states in adopting a state-wide RES. Renewable standard legislation provides a guarantee to manufacturers that the renewable energy sector will continue to grow in their state in years to come; giving them sound reason to invest in new facilities, expand production capabilities, and commit to additional hires. The state of Colorado, which has recently increased its renewables commitment to 20% by 2020, has seen the rewards of strong policy support: Danish turbine blade manufacturer Vestas chose the state as the site for its first
U.S. manufacturing plant, creating 450 manufacturing jobs when it begins operations in 2008.
The President and CEO of GE Energy, John Krenicki Jr., has stated to Congress, “We believe wind and solar energy are likely to be among the largest sources of new manufacturing jobs worldwide during the 21st Century.” As a state that lost 68,300 manufacturing jobs between January 2001 and May 2004,
Michigan should seize the opportunity to reverse its economic downturn by creating a supportive climate for the growing renewable energy industry in the state.
Michigan’s Future in the Renewable Energy Industry Technical Report
. The Renewable Energy Policy Project. November 2006.
Ann Arbor News.
December 1, 2007.
Windsor.”
Office of Gov. Bill Ritter, Jr.
14 June 2007.
5 Comments
The real reason Michigan needs an RPS is because Michigan's two largest utilities, DTE and Consumers Energy, steadfastly stand in the way of entrepreneurs who are already stepping in to provide renewable energy at low prices.
One can google stories from the Bay City Times that show how DTE stopped a small school that built a windmill from tieing that project into the grid and providing electricity. It took a Michgian Public Service Commission order to get DTE to back down.
Similarly, Consumers Energy routinely gives landfill gas producers and methane digester-to-electricity operators pennies for power, while telling the state it needs to force customers to pay billions for a new coal plant -- where the power will cost more than 10 cents per kwh.
Now the utilities are demanding that Michigan ratepayers hand them $6 billion -- that will mean more than $1 billion a year over 20 years under current ratepaying schemes -- so that they can build renewable power. They will control who gets in-- and who doesn't. Entrepreneurs need not apply. This is bad public policy.
Michigan should adopt a renewable portfolio standard, but not hand control of that standard to the two major utilities. Gov. Granholm's plan is wrong and will lead to higher rates and less renewable power than one supported by the Customer Choice Coalition (www.stopthemonopoly.com). Visit our web site to see why.
My initial comment would mirror that of Davids, The large utilities are creating their own regulation and the MPSC just sits back and goes along with it. An RPS is a good place to start but it will take a crack down on MPSC regulators to make net metering and interconnection more balanced and not so one sided to the utilities. A home owner can not cost effectively pay 25% of total system cost or $10,000 which ever is less to interconnect to the grid. What does the homeowners cost of the system have to do with it? Manufacturing wind systems or their parts in Michigan can be a great thing but with out fair balance in interconnection, net metering and unjust local zoning who is going to buy the Michigan built systems? To learn more about unfair net metering in Michigan visit http://www.windpowerservicesllc.com and read our net metering page.
The blind belief that building a couple thousand windmills in Michigan would result in 34,000 plus new jobs just demonstrates that our culture is dumbing down and seems to have lost its ability or desire to apply critical thinking. It's a naked assertion that has no basis that I have been able to find.
First, people routinely state that Michigan has the 14th best wind resource in the U.S. This is a case of misleading statistics at its best. Go to the American Wind Energy Ass website and check it out. You will find that if you multiply Michigan's wind potential 6.5 times we would get all the way to 12th. If you multiplied it 18 times we could be number one. The truth is Michigan is closer to 50 than it is to 1. But the lazy media won't bother to check this out. They just report the sloganeering.
The truth is we are not, as some love to say, behind other states in wind development. The other states simply have better wind than Michigan does. Simply put the more a wind turbine turns in the wind, the more electricity it makes. The more electricity it makes the more cost effective the turbine is.
Turbines have gone up in other windier states because they were a better investment there. In markets investment follows the best opportunities. Only government operating in a lazy media environment would have a chance of mandating the construction of thousands of wind turbines in inefficient wind areas.
The other day I found a July, 2007 article detailing how 4 states had recently landed substantial wind energy manufacturing facilities. Shockingly none of the states (Arkansas, Kentucky, Oklahoma, and South Dakota) had a renewable portfolio standard. Two of the states, Arkansas and Kentucky, don't even have decent wind resources. It seems to me something else is afoot.
Finally, and most shockingly to me is that seemingly all renewable proponents tout thousands of new jobs from the imposition of a renewable portfolio standard (with no proof or evidence). Yet proponents never discuss what the impact on our economy would be if a standard was imposed and substantial rate increases occured. They don't want to talk about that nor will they in a serious way. If they did, they would be forced down a path of discussion that leads to folly.
The truth is if we do not develop a culture capable of thinking about such multi-billion dollar issues in a critical way realistic way, we are not going to be successful. We will be too busy dancing and chanting to the sun and wind gods, as we watch the strange vehicles on four wheels carry our best and brightest south and out of our lives and culture.
Fred Akers is correct when he says the promises of job growth in the renewable energy industry are not credible. Further, he correctly points out that statistics are meaningless taken out of context, and in this case the gap from 14th to 50th is closer than from 14th to 1st. On David's side, his claim that DTE and Consumers Energy stand in the way of renewable energy growth also has an element of truth. However, coal is the least expensive form of energy, costing $1.26 per million BTU's. Using oil in power plants bring the cost up to $4.22 per million BTU, while natural gas brings it over $5. Renewable energy costs, including solar, wind, geothermal, and biomass are more expensive still. Mandating that power companies must use a certain percentage of renewable energy will increase the cost of electricity for business and consumers. An environmentally and low cost alternative is always ignored - nuclear power. Scare tactics are always used to frighten people away from it. However, nuclear power provides 20% of our nation's electricty, and there has been no loss of life. This cannot be said for any other traditional energy source. The cost of nuclear power is half that of renewable energy sources.
The impression I have given is that I am opposed to alternative energy. I am not. I am opposed to telling a company that they must use it whether it is economical or not.
While I don't blog, I was pointed to this web blog to check it out, so I will put my 2 cents in. Don't expect to hear more from me. The folks comments above seem to have more intelligence than I have seen in the state yet on renewables. The RPS bills suck and should not be supported. The bill I support is Kathleen Law's HB 5218 which I helped push forward to paper. The RPS is a dirty deal going down where the two big utilities will get all of the quota (RPS= quota), do expensive projects, charge a high premium and leave the rest of us with a coal and atomic plant (because they sprinkled a few windmills around). There will be no locally owned, citizen owened, business owned, community own renewable projects. There will be no real jobs, and no industry development because the quota will be filled quickly and there will be no long-term committements, contracts or obligations to go past he 7 - 10%, whatever.
Oh yea, wow, I'm supprised someone finally cauught on that that 14th in the nation was a bunch of balony. More intelligence.
The Michigan Renewble Energy Sources Act 2007, HB 5218 can change this. With such good policy a German state with 5 million pop. put in 25% renewables in 5 years. We could even do better.
I am urging the Sierra Club and other leading environmental organizations to stop favoring the RPS bills. Just because all the lobbist in Lansing and most politicians are "the best money can buy from the utilities", the citizens deserve better.
Cheers,
S.S.
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