OHIO STATE UNIVERSITY EXTENSION Energy as an Economic Development Strategy Aiding Public Officials in the Decision Making Process June, 2015

2 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

OHIO STATE UNIVERSITY EXTENSION Ohio Energy Trends

4 OHIO STATE UNIVERSITY EXTENSION Total Global Energy Consumption SourceSource: U.S. Energy Information Administration, Independent Statistics & Analysis. The 2011 International Energy Outlook Report estimates the world energy consumption of 770 quadrillion Btu in 2035.

5 OHIO STATE UNIVERSITY EXTENSION Average Retail Price of Electricity in Ohio

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).

7 OHIO STATE UNIVERSITY EXTENSION Age of Ohio Electric Power Generators Source: 2012 Form EIA-860 Data - Schedule 3, 'Generator Data' (Operable Units Only)

OHIO STATE UNIVERSITY EXTENSION Energy and Economic Development

9 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

OHIO STATE UNIVERSITY EXTENSION “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 What is Economic Development ?

11 OHIO STATE UNIVERSITY EXTENSION Tax Generation e.g. Large Scale Renewable Energy Job Creation e.g. Shale Energy Development Job Retention e.g. Distributed Energy Generation Energy and Economic Development

OHIO STATE UNIVERSITY EXTENSION Large Scale Renewable Energy Development

13 OHIO STATE UNIVERSITY EXTENSION Walmart’s Approach to Renewable Energy Text

14 OHIO STATE UNIVERSITY EXTENSION Source: PUCO (March, 2015)

15 OHIO STATE UNIVERSITY EXTENSION Ohio Renewable Energy Generation By Technology Source: PUCO (March, 2015)

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18 OHIO STATE UNIVERSITY EXTENSION Support for Wind Turbines Based on Residents’ Zip Code of Renewable Energy Local Support or Opposition of Development?

OHIO STATE UNIVERSITY EXTENSION Shale Energy Development

20 OHIO STATE UNIVERSITY EXTENSION Ohio Natural Gas Production ( ) Source: PUCO (March, 2015)

21 OHIO STATE UNIVERSITY EXTENSION Ohio Oil Production ( ) Source: PUCO (March, 2015)

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 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 Midstream Processing Terms

24 OHIO STATE UNIVERSITY EXTENSION 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)

26 OHIO STATE UNIVERSITY EXTENSION Downstream Value Chain Markets

OHIO STATE UNIVERSITY EXTENSION Distributed Energy Development

28 OHIO STATE UNIVERSITY EXTENSION Walmart’s Approach to Renewable Energy Text

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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.

31 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

32 OHIO STATE UNIVERSITY EXTENSION Example: Swine Facility 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.

OHIO STATE UNIVERSITY EXTENSION Energy as a BR&E Strategy

34 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.

35 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%).

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

41 OHIO STATE UNIVERSITY EXTENSION Energy Sector - Power Generation

42 OHIO STATE UNIVERSITY EXTENSION Energy Sector - Power Generation

43 OHIO STATE UNIVERSITY EXTENSION Energy Sector - Power Generation