OHIO STATE UNIVERSITY EXTENSION

Energy as an Economic
Development Strategy
Aiding Public Officials in the Decision Making Process

June, 2015
 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

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 OHIO STATE UNIVERSITY EXTENSION

Ohio Energy Trends

 OHIO STATE UNIVERSITY EXTENSION

Total Global Energy Consumption

600
The 2011
500
International Energy
(Quadrillion Btu)

400
Outlook Report
300 estimates the world
200 energy consumption

100 of 770 quadrillion Btu

in 2035.
0
1980 1985 1990 1995 2000 2005 2010

SourceSource: U.S. Energy Information Administration,

Independent Statistics & Analysis. www.eia.gov 4
 OHIO STATE UNIVERSITY EXTENSION

Average Retail Price of Electricity in Ohio

14.00
12.00
Cents per Killowatt-hour

10.00
8.00
6.00
4.00
2.00
0.00

Residential Sector Commercial Sector Industrial Sector

Transportation Sector Other All Sectors
Source: (USDOE/EIA, 2014) The Current and Historical Monthly Retail Sales, Revenues and Average Revenue per 5
Kilowatthour by State and by Sector
 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).
 OHIO STATE UNIVERSITY EXTENSION

Age of Ohio Electric Power Generators

Percentage of Total Generation Capacity in Ohio
30%
25% 24% 24%
22%
20%
15% 12%
10% 9%
6%
5% 3%
0%
10 or 11-20 21 - 30 31 - 40 41 - 50 51 - 60 More
fewer than 60
Age in Years

Source: 2012 Form EIA-860 Data - Schedule 3,

'Generator Data' (Operable Units Only) 7
 OHIO STATE UNIVERSITY EXTENSION

Energy and Economic

Development
 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

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 OHIO STATE UNIVERSITY EXTENSION

What is Economic Development ?

“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
 OHIO STATE UNIVERSITY EXTENSION

Tax Generation Job Creation Job Retention

e.g. Large Scale e.g. Shale Energy e.g. Distributed
Renewable Energy Development Energy Generation

Energy and Economic Development

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 OHIO STATE UNIVERSITY EXTENSION

Large Scale Renewable

Energy Development
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Renewable Portfolio Standard Policies

Walmart’s Approach
WA: 15% x 2020*
to Renewable Energy
www.dsireusa.org / March 2015
ME: 40% x 2017
NH: 24.8 x 2025
ND: 10% x 2015
MT: 15% x 2015 MN:26.5% VT: 20% x 2017
x 2025 (IOUs)
OR: 25%x 2025* 31.5% x 2020 (Xcel)
MA: 15% x 2020(new resources)
(large utilities) 6.03% x 2016 (existing resources)
SD: 10% x 2015 MI: 10% x NY: 29% x 2015
WI: 10% 2015*† RI: 14.5% x 2019
2015
CT: 27% x 2020
IA: 105 MW IN: OH: 12.5% NJ: 20.38% RE x 2020
NV: 25% x IL: 25% 10% x x 2026 + 4.1% solar by 2027
UT: 20% x
2025* CO: 30% by 2020 x 2026 2025† PA: 18% x 2021†
2025*† (IOUs) *† VA: 15%
CA: 33% KS: 20% x 2020 MO:15% x DE: 25% x 2026*
x 2025† DC
x 2020 2021 MD: 20% x 2022
NC: 12.5% x 2021 (IOUs)
DC: 20% x 2020
NM: 20%x 2020 OK: 15% x

• Text
AZ: 15% x
(IOUs) 2015 SC: 2% 2021
2025*

TX: 5,880 MW x 2015*

29 States + Washington
U.S. Territories DC + 2 territories have a
HI: 40% x 2030 NMI: 20% x 2016 Guam: 25% x 2035 Renewable Portfolio
PR: 20% x 2035 USVI: 30% x 2025
Standard
(8 states and 2 territories have
renewable portfolio goals)
Renewable portfolio standard
Renewable portfolio goal *† Extra credit for solar or customer-sited renewables
Includes non-renewable alternative resources
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Ohio Renewable Energy Development ( All Technology)

# of Facilities Total MW

500 500

Capacity - Megawatts (MW)

# of Certified Facilities

400 400

300 300

200 200

100 100

0 0
2009 2010 2011 2012 2013 2014 2015

100 MW
25 MW 177 MW
71 MW
12 MW 49 MW 304 MW
49 MW
10 MW 49 MW 99 MW
37 MW 10 MW 14
Source: PUCO (March, 2015)
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Ohio Renewable Energy Generation By Technology

Abandoned Coal
Mine Methane
4%

Biomass
Wind 27%
45%

FuelCell
0%
Waste Hydroelectric
Energy Solar PV 6% Solid
Recovery 10% Waste
4% 4%

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Source: PUCO (March, 2015)
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Local Support or Opposition of Development?

Support for Wind Turbines Based on Residents’ Zip Code of Renewable Energy
80%
73%
General support or
70%
opposition for wind
60% turbines in their county:

50%
48%

40% Support/strongly support

30%
30%
21% Neutral
20% 16%
11%
10% Opposed/strongly
opposed
0%
Other zipcode 43359

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Shale Energy Development

 OHIO STATE UNIVERSITY EXTENSION

Ohio Natural Gas Production (2000 - 2014)

600,000,000
Million Cubic Feet (Mcf)

500,000,000

400,000,000

300,000,000

200,000,000

100,000,000

Total Production Shale Production

Source: PUCO (March, 2015)

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 OHIO STATE UNIVERSITY EXTENSION

Ohio Oil Production (2000 - 2014)

16,000,000
14,000,000
12,000,000
10,000,000
Barrels

8,000,000
6,000,000
4,000,000
2,000,000
-

Total Production Shale Production

Source: PUCO (March, 2015)

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 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

Ohio Midstream Processing Terms

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 STATE UNIVERSITY EXTENSION

Ohio Midstream Processing Infrastructure

450,000 4,500
Natural Gas Processing Mmcf/day

400,000 4,000
350,000 3,500

Fractionation – bbl/day
300,000 3,000
250,000 2,500
200,000 2,000
150,000 1,500
100,000 1,000
50,000 500
- -
2013 2014 2015
Fractionation Natural Gas Processing
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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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Downstream Value Chain Markets

tream Value Chain: Markets

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 OHIO STATE UNIVERSITY EXTENSION

Distributed Energy
Development
 OHIO STATE UNIVERSITY EXTENSION

Note: Net Metering rules are being actively

Net Metering discussed in over a dozen state public service &
utility commissions across the country.

Walmart’s Approach to Renewable Energy

www.dsireusa.org / March 2015
ME: 660*
WA: 100
VT: 20/250/2,200
MT: 50* ND: 100* NH: 1,000
OR: 25/2,000* MA: 60/1,000/2,000/10,000*
MN: 40
RI: 5,000*
WI: 20*
MI: 150*
WY: 25* CT: 2,000/3,000*

IA: 500* OH: no limit* NY: 10/25/500/1,000/2,000*

NV: 1,000* NE: 25
IL: 40* PA: 50/3,000/5,000*
UT: 25/2,000* IN: 1,000*
NJ: no limit*
CA: 1,000* KS: 15/100/150* VA: 20/1,000*
CO: 120%* KY: 30* DC
MO: 100 DE: 25/100/2,000*
NC: 1,000*
MD: 2,000
OK: 100*
• Text
AZ: 125% SC: 20/1,000*
AR: 25/300 WV: 25/50/500/2,000

NM: 80,000* DC: 1,000/5,000/120%

GA: 10/100

AK: 25* LA: 25/300

44 States + DC,
FL: 2,000*
U.S. Territories: AS, Guam, USVI, & PR
HI: 100*
American Samoa: 30
Guam: 25/100
have mandatory net
Puerto Rico: 25/1,000/5,000
Virgin Islands: 20/100/500
metering rules
State-developed mandatory rules for certain utilities
No uniform or statewide mandatory rules, but some utilities allow net metering
State: kW limit residential/ kW limit nonresidential
* 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. 28
OHIO STATE UNIVERSITY EXTENSION

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“This is a financial investment, it just happens
to be green. We will never tell you, go spend
six or seven million dollars to be green. We
will tell you, spend six or seven million dollars
to be profitable, and if you can be green while
doing this, great”

– Jereme Kent
One Energy LLC.
 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. 32
 OHIO STATE UNIVERSITY EXTENSION

Energy as a BR&E
Strategy
 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%).

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So, How Can We Help You?
• OSU has developed a Business Retention and
Expansion Program.

• Program was created in 1986 and has been used in

nearly all Ohio Counties.

• Originally created to focus on the manufacturing sector

but has since expanded in the retail sector and specific
sectors ie health care, downtowns
BRE Energy Development Program

• The primary objective of this program is to increase the

knowledge, awareness of business owners and
leaders concerning distributed energy generation, net
metering, and renewable energy development.

• This program will provide participants the tools and

knowledge to enhance decision-making capacity on
energy investments, allowing Ohio businesses to
prosper, grow, and provide stabilized employment
opportunities
Components of the BR&E
• A customized business retention and expansion survey to be
distributed to businesses in your community. This electronic survey
will serve as a needs assessment, market the program to
businesses, and collect critical data to assess overall compatibility
with distributed energy projects.

• Presentation from OSU Extension providing renewable energy policy

overview and foundation level information on distributed energy
generation, net metering, and renewable energy projects.

• Expert Q&A panel session with utility, industry, and financial experts,
to provide detailed information on net metering, rules, cost,
construction, permitting, timing, and financing options.
Components of the BR&E
• Case study sessions presented by business leaders who have
successfully implemented distributed energy generation projects in
Ohio and can highlight both opportunities and challenges with their
respective projects.

• Meetings with panel representatives to advance project discussions

to a more detailed level. Companies (participants) will bring electric
consumption data with them to take advantage of this initial
consultation with facility visits to follow at a later date, if the company
chooses.

• A Comprehensive Economic Development Energy Strategy

 OHIO STATE UNIVERSITY EXTENSION

Questions ?
Eric Romich
OSU Extension Field Specialist, Energy Development
romich.2@osu.edu
energizeohio.osu.edu

David Civittolo
OSU Extension Field Specialist, Community Economics
Civittolo.1@osu.edu
comdev.osu.edu/programs/economic-development/business-retention-expansion