• Free for qualified executives and consultants to industry

  • Receive quarterly issues of Area Development Magazine and special market report and directory issues


How Green Is Your Site's Energy?

Alternative energy is part of today's - and tomorrow's - location decision.

Apr/May 09
(page 2 of 3)
AD: Which states do you feel are in the worst shape as far as the capacity and reliability of their energy grids are concerned?

The perception is the western states are in worst condition, due to usage and lack of redundancy in the network; however, the western grid is integrated with the Canadian grid, which has a surplus of hydropower, most of it coming from the Canadian Rockies. The western sector is huge geographically but can mitigate that risk through better power sharing with Canada and Mexico. The year 2000 power shortage in California was caused by reduction of power generation in the Pacific Northwest. The western grid certainly needs more improvement, but is also better positioned because there is the political will and public consent to bring about change, especially in California, Oregon, and Washington.

Recently I spent almost 12 months scouring over 20 states in the Midwest, Northeast, South, and Southeast regions for a client that required short circuit capacity for its manufacturing facility. We evaluated all the grids, discussed detailed capacity and reliability plans with FERC and regional utilities like Duke and Southern Companies, along with regional grid groups like ERCOT (Electric Reliability Council of Texas). The bottom line is that our electric grid is stressed, and we need these renewable sources to supplement and diversify our energy supply - but the time required to develop new power plants or sources, or to do basic reconfiguration of infrastructure (i.e., move a major 220 KV line or secure a right of way with appropriate EIS efforts), is prohibitive and creates uncertainty with investors, especially foreign entities with large requirements. 

And now we're also competing with countries whose renewable energy development efforts and infrastructure enable distribution to customers that is as good if not better than ours - at a lower operating cost (for example, coal-to-liquid initiatives in China and the Middle East versus their infancy here in United States, with carbon sequestration being the big constraint). We need to get some of these projects up and running - all forms including solar, wind, clean coal, nuclear - with "can do" attitudes and compete for precious jobs that continue to look for the best locations to enhance competitive advantage.

AD: How much of a facility's energy can be realistically provided by solar, wind, geothermal?

Hess: Companies cannot go "at risk" just to say they utilize alternative sources of energy - they must still go back to the basics I mentioned before: accessibility, reliability, redundancy, and cost-efficiency.
Sweeney: I think this depends very much on the type of operation, and also where it is located. We are just starting to hear from a few select clients the idea that direct access to green or alternative energy is a site selection criterion, so they will look for a 100 percent ideal. In most areas of the country, you will be subject to the RPS commitment level (renewable portfolio standard, the amount of overall generation in a utilities portfolio coming from renewable), so maybe 20 percent. But again, this does not mean 20 percent of the electrons entering your facility were generated with alternative - the grid constraints and loss of energy over distance movement prevents wind farm energy in North Dakota from being burned at a pharma plant in North Carolina.
Hess: When the question come up about what percentage of power would likely be generated from alternatives, we usually tell clients that still comprises less than 1 percent of the candidate state's electric power portfolio - we obviously still have a ways to go.

That being said, however, there are some great examples of alternative energy being used in the workplace, especially in Europe. Since 2006 all new buildings in the EU, especially Spain, must have solar panels for water heating.  Wind power is growing at the rate of 30 percent annually, with a worldwide installed capacity of over 100 GW and is widely used in several European countries and the United States. Photovoltaic (PV) power stations are particularly popular in Germany and Spain. Solar thermal power stations operate in the United States and Spain, and the largest of these is the 354 MW SEGS power plant in the Mojave Desert. And Brazil has one of the largest renewable energy programs in the world, involving production of ethanol fuel from sugar cane; ethanol now provides 18 percent of the country's automotive fuel. 

AD: What about going off-grid and doing co-generation or geothermal?

Sweeney: This is not a new idea; it was very popular during past energy price crunches. It is really dependent on the particular project and its size and mode of operation. The using company does not have to operate it themselves - there are still a number of firms who will finance and/or build and/or operate as a third party. This alternative is best for fairly large users with a very consistent load (24/7 operations). I have not seen a groundswell of these like we did 15 or so years ago, but it is a realistic option for some firms/projects.
Hess: Co-generation activities have been successful in many clusters of industry on a local level like petrochemical in Louisiana or facilities in industrial parks next to large industrial complexes with excess power - they create their own distribution power grids. Projects I have worked on have seen as much as 20 percent power from co-generation in these isolated situations. We have much to learn and leverage from these "localized" best practices.

Geothermal, I think, is too risky. It would need highly reliable backup sources, and accessing geothermal for larger projects is probably pretty tough relative to location needs and overall infrastructure development. I'm sure there are best practices, but this source is not on the radar screen with traditional clients.

U.S. Manufacturers Attempting to Upskill Their Workforces
Geraldine Gambale, Area Development Magazine
Developing Loyalty Among a Millennial Workforce
Geraldine Gambale, Area Development Magazine
Technological Innovation Essential to U.S. Manufacturing Growth
Geraldine Gambale, Area Development Magazine
Which Countries Have Lowest Business Costs?
Geraldine Gambale, Area Development Magazine
Ideas for Industry Innovation Ecosystems Put Into Play
Craig Giffi, Deloitte LLP
Michelle Drew Rodriguez, Deloitte Services LP
All Studies/Research/Papers

Follow Area Development