Ohio Environmental Law Blog : Ohio Environmental Lawyer & Attorney : Joseph Koncelik : Frantz Ward Law Firm : Environmental Regulation, Land Use, Compliance : Cleveland, Ohio

"If you build it they will come..." is the old saying from the movie Field of Dreams.  It also could be used to sum up Ohio's energy policy toward growing green jobs. 

Policymakers believed using grant funds and passage of a renewable energy portfolio standard (RPS) would kick start demand for renewable energy in the State.  If demand for solar, biomass and wind projects significantly increased, then manufacturers would be more likely to locate in the State.  

Governor Strickland was a strong believer in generating demand through government programs.  Governor Kasich and the Republican controlled legislature are less convinced.  September 21st and 22nd, Governor Kasich is convening a energy summit to help formulate his Administration's energy policy. With Ohio's renewable energy policy at a cross-roads, what are the results from the "if you build it they will come" energy policy? 

Ohio's Advanced Energy Fund Comes to an End

Ohio's Advanced Energy Fund was created to provides loans and grants to help overcome the initial cost barriers to commercial and residential renewable energy projects.  The Fund was paid for using a 9  cent per month fee on all Oho electric utility customers.  Residential, commercial and industrial customers paid the same amount.  Total fees in a year whether you owned a factor or a house was $1.08.

According to a July 16th Plain Dealer Article discussing the end of Ohio Advanced Energy Fund, the Legislature's decision to discontinue the program will reduce demand for renewable energy products like solar arrays and wind turbines at at time Ohio's clean energy economy is seeing real growth.

The Advanced Energy Fund, managed by the Ohio Department of Development, has awarded about $44.6 million in grants since Dec. 31, 2005, to nearly 700 projects, more than 400 of them solar projects with a total generating capacity of more than 9.5 megawatts (9.5 million watts).

The awards went not only for solar power arrays, but also for solar heating systems, more than 150 wind turbine systems and more than 60 energy efficiency projects.

The grants, according to a Plain Dealer analysis of a current report obtained from the state, have gone to more than 300 residential projects, about 180 commercial businesses, nearly 70 industrial projects, about 10 farms and about 70 institutions such as schools, colleges, churches and foundations.

Without the grants, making the financing work on these renewable energy projects becomes much more difficult.  Project developers will largely resort to Power Purchase Agreements (PPAs) that typically involve fairly complex arrangements between the property owner, the developer and a corporation that can utilize federal tax incentives. 

The concern is the more complicated financing will mean less projects.  With less demand, the fear is Ohio will be less attractive to renewable energy manufacturers.  One reason the grant program was ended was because lawmakers believed it was no longer necessary now that Ohio enacted an RPS.

Ohio' Renewable and Advanced Energy Portfolio Standard

With the passage of Senate Bill 221 in 2008, Ohio became one of the 36 states to mandate a percentage of the State's energy generation come from renewable or advanced energy resources.  The law required utilities to secure a portion of their electricity supplies from these alternative resources.

By the year 2025, 25% of the electricity sold by each utility within Ohio must be generated from alternative energy sources. At least 12.5% must be generated from renewable energy resources, including wind, hydro, biomass and at least 0.5% solar. The remainder can be generated from advanced energy resources, including nuclear, clean coal and certain types of fuel cells. In addition, at least one half of the renewable energy used must be generated at facilities located in Ohio.

All utilities must meet annual renewable and solar energy benchmarks that increase as a percentage of electric supply each year.  Here are those benchmarks for the first five years of the standard.

Ohio's RPS was seen as the way to significantly pump up demand in the State for renewable energy projects.  We are only part way through year three of the RPS.  The RPS contains a modest glide path upward toward the 12.5% mandate.  At this early stage utilities are under only very modest requirements in terms of securing renewable energy generation.

Renewable Energy Projects Rise But What About "Green" Jobs?

So has Ohio's Advanced Energy Fund or the RPS grown Ohio's clean energy economy?

Last week it was announced that Ohio was second only to Oregon in manufacture of solar panels.  Ohio has enjoyed strong growth in solar equipment manufacturing.  This from the article appearing in the Toledo Blade:

The Solar Energy Industries Association of Washington says Ohio produced 66 megawatts of photovoltaic modules in the first quarter of 2011, up 50 percent from 44 megawatts of solar modules produced in the state during the first quarter of 2010.

Last week's announcement would certainly seem to suggest the Fund and/or RPS with the solar carve out was having its intended effect of driving up demand and bringing jobs to the State. But was last week's announcement a result of national demand or Ohio demand for solar panels? 

A more comprehensive analysis of Ohio's green energy job generation by the Brookings Institute paints a complicated picture of Ohio's clean energy economy.  According to figures compiled for Ohio, while the number of renewable energy projects in the State is way up, the State's performance in terms of clean energy job growth appears to be mixed.

On the positive side, Ohio ranks 6th in the country in total clean energy related jobs with a total of 105,306.

Ohio also ranked 12th in total clean energy jobs added between 2003-2010.

However, the graph shown to the left indicates Ohio's clean energy job growth has lagged the rate of growth in U.S.  The sector has only grown 2.5% annually which means Ohio ranks 38th.

It is important to note that Ohio's RPS standard only kicked in during 2009.  This is far too little time to determine what the impact of Ohio's RPS has been on growing Ohio's green energy economy. 

The question will be whether the Kasich Administration and Republican's are willing to keep the RPS standards in place despite mounting resistance from utilities.  Some Republican's believe that RPS mandates drive up electricity prices which hurts others sectors of Ohio's economy.  With Ohio's clean energy sector only making up 2% of the total jobs in the State will the sector and its allies have enough political muscle to keep the standards in place? 

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A report released today by the U.S. Conference of Mayors estimates that job growth associated with green industries could be the fastest growing job market over the next few decades.  As reported in Time Magazine:

A major shift to renewable energy and efficiency is expected to produce 4.2 million new environmentally friendly "green" jobs over the next three decades, according to a study commissioned by the nation's mayors.

By 2038, another 4.2 million green jobs are expected to be added, accounting for 10 percent of new job growth over the next 30 years, according to the report by Global Insight, Inc.

"It could be the fastest growing segment of the United States economy over the next several decades and dramatically increase its share of total employment," said the report, obtained Wednesday by The Associated Press.

Ohio, with its long history of manufacturing and its heavy reliance on fossil fuels, has been slower to embrace green ideas as means of turning its economic fortunes around.   However, the drumbeat of bad economic news has more Ohio leaders looking for new opportunities to jump start Ohio's economy.  From 2000 to 2007, Ohio lost 209,000 jobs.  During that same period Cleveland lost 63,000 jobs based upon a report compiled using Department of Labor statistics. 

The single largest development was passage of legislation (S.B. 221) this summer that created a renewable portfolio standard, advanced energy portfolio standard and energy efficiency requirements. However, a review of recent local news stories and events shows the Buckeye State is beginning to focus on developing a green economy:

• Cincinnati Wants to Lead Green Roof Movement in U.S.- The City Council on Wednesday became the first in Ohio with a plan to channel grants and loans to residents and businesses to replace tar and shingles with vegetation.
• Columbus Summit on Sustainability and the Environment-  MORPC, the Columbus metropolitan planning organization, held a successful multi-day summit at the Columbus Convention Center.  Over 500 individuals attended that event that had a wide range of presentations relating to sustainability. 
• Eight Major Green Projects in Northeast Ohio- They include attracting fish to the Cuyahoga River shipping channel through installation of plants along the bulkhead, deconstruction of abandoned homes to recycle the materials, local food from urban community gardens, etc.
• Wind Turbines on Lake Erie- Cuyahoga County officials this week rolled out the first three reports from their $1 million study of a grand vision -- erecting two to 10 wind turbines in the lake off Cleveland's shore.  Constructing off-shore wind power in fresh water is seen as a possible economic driver in Northeast Ohio.
• Ohio State University Participates in Solar Decathlon- 20 university teams will participate in the 2009 Solar Decathlon. The teams, chosen from the United States, Canada, and Europe, will each receive $100,000 from DOE to design, build, and operate energy efficient, solar-powered homes.  The Solar Decathlon is an international, biennial competition that challenges university teams to design and build energy efficient solar-powered homes.
• Ohio Has 28 Solar Sites as Part of National Solar Tour-  Green Energy Ohio organized the tours in Ohio as part of the American Solar Energy Society.  The tours are from October 3-5.
• Ohio Gov. Recognizes U. of Toledo Solar Power Leadership-

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Surprised? I was after hearing the old reports of China building a new coal plant once a week.  China has long been the favorite scapegoat for those arguing the United States shouldn't address climate change without their participation.  But it appears China may be changing direction. 

As reported in the Guardian, the Climate Group released a study that concludes China is the world's leading producer of energy from renewable sources. 

 Here are some of the fun (and surprising) facts reported in the Study:

1. China leads the world in installed renewable capacity at 152 gigawatts
2. Approximately 820 solar PV were produced in China in 2007, second only to Japan
3. It is the leading world exporter of wind turbines
4. China investments in renewable energy as a percentage of GDP are almost equal to Germany's, the world leader
5. China's energy efficiency standards for cars is 40% higher than in the United States
6. China is the third largest producer of ethanol

Clearly, the goal of the Climate Group was to produce a study to combat the arguments raised in the United States that support inaction on climate change without India or China.  However, one statistic highlighted in the Study deserves some additional discussion. 

In 2007, China emitted 5.1 tons of CO2 per capita compared to 19.4 tons for the United States.  While the United States per capita number justifies action, so does the potential for China to grow its emissions. 

China has 1.2 billion people compared to the United States 300 million.  China has already overtaken the US in total emissions with 1/3 of the emissions per capita because it has four times more people.  Without mandatory caps, what will China's emissions be once 1/2 their population drives cars, purchases more of latest electronics, and have more income to travel?

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