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 2 OHIO STATE UNIVERSITY EXTENSION Ohio Energy Trends OHIO STATE UNIVERSITY EXTENSION Total Global Energy Consumption 600 The 2011 (Quadrillion Btu)

500 International Energy 400 Outlook Report 300 estimates the world 200 energy consumption 100 of 770 quadrillion Btu 0 in 2035.

0 8 3 8 6 8 9 9 2 9 5 9 8 0 1 04 0 7 1 0 8 1 9 1 9 1 9 1 9 1 9 1 9 1 9 2 0 20 2 0 2 0 SourceSource: U.S. Energy Information Administration, Independent Statistics & Analysis. www.eia.gov 4 OHIO STATE UNIVERSITY EXTENSION Average Retail Price of Electricity in Ohio 12.00 Cents per Killowatt-hour 10.00 8.00 6.00 4.00 2.00 0.00 Residential Sector Other

Commercial Sector All Sectors Industrial Sector Transportation Sector Source: (USDOE/EIA, 2014) The Current and Historical Monthly Retail Sales, Revenues and Average Revenue per Kilowatthour by State5 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% 20% 15% 10% 5% 0% 10 24% o 12% 9% 6% er ew f

r 24% 22% 3% 1 20 1 21 0 3 - 31 0 4 -

41 0 5 - 51 0 6 M e or an h t 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 Ohios 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 9 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 Energy and Economic Development 11 OHIO STATE UNIVERSITY EXTENSION Large Scale Renewable Energy Development OHIO STATE UNIVERSITY EXTENSION Renewable Portfolio Standard Policies Walmarts Approach to Renewable Energy

www.dsireusa.org / March 2015 WA: 15% x 2020* ND: 10% x 2015 MT: 15% x 2015 OR: 25%x 2025* NH: 24.8 x 2025 MN:26.5% x 2025 (IOUs) SD: 10% x 2015 WI: 10% 2015 IA: 105 MW NV: 25% x 2025* CA: 33% x 2020

VT: 20% x 2017 MA: 15% x 2020(new resources) 6.03% x 2016 (existing resources) 31.5% x 2020 (Xcel) (large utilities) UT: 20% x CO: 30% by 2020 2025* (IOUs) * KS: 20% x 2020 AZ: 15% x 2025* NM: 20%x 2020 (IOUs) ME: 40% x 2017 MI: 10% x 2015*

NY: 29% x 2015 IN: OH: 12.5% IL: 25% 10% x x 2026 x 2026 2025 MO:15% x 2021 RI: 14.5% x 2019 CT: 27% x 2020 NJ : 20.38% RE x 2020 + 4.1% solar by 2027 PA: 18% x 2021 VA: 15% x 2025 DC NC: 12.5% x 2021 (IOUs)

OK: 15% x 2015 DE: 25% x 2026* MD: 20% x 2022 DC: 20% x 2020 SC: 2% 2021 Text TX: 5,880 MW x 2015* 29 States +Washington U.S. Territories HI: 40% x 2030 Renewable portfolio standard Renewable portfolio goal * NMI: 20% x 2016

Guam: 25% x 2035 PR: 20% x 2035 USVI: 30% x 2025 DC +2 territories have a Renewable Portfolio Standard (8 states and 2 territories have renewable portfolio goals) Extra credit for solar or customer-sited renewables Includes non-renewable alternative resources 13 OHIO STATE UNIVERSITY EXTENSION Ohio Renewable Energy Development ( All Technology) Total MW 500

500 400 400 300 300 200 200 100 100 0 2009 2010

2011 2012 2013 2014 0 2015 100 MW 25 MW 177 MW 12 MW 49 MW 304 MW 10 MW

49 MW 99 MW 37 MW 10 MW 71 MW 49 MW 14 Source: PUCO (March, 2015) Capacity - Megawatts (MW) # of Certified Facilities # of Facilities OHIO STATE UNIVERSITY EXTENSION Ohio Renewable Energy Generation By Technology

Abandoned Coal Mine Methane; 4.14% Wind; 44.85% Biomass; 26.66% Hydroelectric; 6.15% FuelCell; 0.08% Solar PV; 9.89% Waste Energy Recovery; 4.60% Solid Waste; 3.62% Source: PUCO (March, 15 2015) OHIO STATE UNIVERSITY EXTENSION 16 OHIO STATE UNIVERSITY EXTENSION Full slide picture

17 OHIO STATE UNIVERSITY EXTENSION Local Support or Opposition of Development? Support for Wind Turbines Based on Residents Zip Code of Renewable Energy 80% 73% General support or opposition for wind turbines in their county: 70% 60% 48% 50% 40% 30% 20% 10%

0% Support/strongly support 30% 16% 21% 11% Other zipcode Neutral Opposed/strongly opposed 43359 18 OHIO STATE UNIVERSITY EXTENSION Shale Energy Development

OHIO STATE UNIVERSITY EXTENSION Ohio Natural Gas Production (2000 - 2014) Million Cubic Feet (Mcf) 600,000,000 500,000,000 400,000,000 300,000,000 200,000,000 100,000,000 - 200020012002200320042005200620072008200920102011201220132014 Total Production Shale Production Source: PUCO (March, 2015) 20 OHIO STATE UNIVERSITY EXTENSION

Ohio Oil Production (2000 - 2014) 16,000,000 14,000,000 12,000,000 Barrels 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 - Total Production Shale Production Source: PUCO (March, 2015) 21 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 industrys 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 highpressure 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 450,000 4,500 400,000 4,000 350,000 3,500 300,000 3,000 250,000 2,500

200,000 2,000 150,000 1,500 100,000 1,000 50,000 - 500 2013 2014 Fractionation Natural Gas Processing

2015 24 Fractionation bbl/day Natural Gas Processing Mmcf/day Ohio Midstream Processing Infrastructure OHIO STATE UNIVERSITY EXTENSION Ohio Getting Ethane Cracker Plant? Appalachian Resins Inc., a Houston company, has leased 50 acres of land in Monroe County. When built, the Ohio plant would process about 18,000 barrels a day of ethane. Source: the Columbus Business First (August, 2014) OHIO STATE UNIVERSITY EXTENSION Downstream Value Chain Markets streamValueChain: Mark

ets 26 OHIO STATE UNIVERSITY EXTENSION Distributed Energy Development OHIO STATE UNIVERSITY EXTENSION Note: Net Metering rules are being actively discussed in over a dozen state public service & utility commissions across the country. Net Metering Walmarts Approach to Renewable Energy www.dsireusa.org / March 2015 ME: 660* WA: 100 MT: 50*

VT: 20/250/2,200 ND: 100* OR: 25/2,000* NH: 1,000 MA: 60/1,000/2,000/10,000* MN: 40 WI: 20* WY: 25* NE: 25 NV: 1,000* UT: 25/2,000* CA: 1,000* CO: 120%* IL: 40* MO: 100 OK: 100*

NM: 80,000* CT: 2,000/3,000* NY: 10/25/500/1,000/2,000* OH: no limit* IA: 500* KS: 15/100/150* AZ: 125% RI: 5,000* MI: 150* PA: 50/3,000/5,000* IN: 1,000* VA: 20/1,000* KY: 30*

NC: 1,000* NJ : no limit* DC DE: 25/100/2,000* MD: 2,000 SC: 20/1,000* AR: 25/300 Text GA: 10/100 WV: 25/50/500/2,000 DC: 1,000/5,000/120% LA: 25/300 AK: 25*

HI: 100* State-developed mandatory rules for certain utilities U.S. Territories: FL: 2,000* American Samoa: 30 Guam: 25/100 Puerto Rico: 25/1,000/5,000 Virgin Islands: 20/100/500 No uniform or statewide mandatory rules, but some utilities allow net metering * State policy applies to certain utility types only (e.g., investor-owned utilities) 44 States +DC, AS, Guam, USVI, & PR have mandatory net metering rules State: kW limit residential/ kW limit nonresidential

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 29 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 31 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 32 tilt. 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. 34 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%). 35 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 [email protected] energizeohio.osu.edu David Civittolo OSU Extension Field Specialist, Community Economics [email protected] comdev.osu.edu/programs/economic-development/business-retention-expansion

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