Ohio’s farmland holds potential for more than just livestock and vegetables these days.
Although parts of the state are captivated by the oil and gas trapped below the surface of rolling fields and enticed by the jobs and profits the boom is expected to create, Ohio is making headway, albeit quietly, in another energy sector.
The renewable-energy industry has turned its focus to the state in recent years. Turns out that Ohio’s 74,700 farms pose ideal conditions for alternatives such as solar and wind energy.
Even if Ohio isn’t yet on the pedestal of renewable-energy gains, the industry is turning its head toward the Buckeye State because of its manufacturing infrastructure and some recent turnabouts that show how Ohio could help move the country toward greater energy independence.
“We’re absolutely leading the transition to a clean-energy economy — could we be doing more? Yes,” said Brian Kaiser, director of green jobs and innovation at the Ohio Environmental Council. “We have a history of innovation and a skilled work force. When you have these assets, you’re poised to exceed in a way that other states can’t.”
In 2011, Ohio led the country in wind-power development with an increase of 900 percent in installed wind-energy capacity, going from just four turbines four years ago to hundreds in 2011, Kaiser said.
Furthermore, in recent years, two of Ohio’s largest private investments came from wind-power developers.
Two years ago, when construction began on the Blue Creek Wind Farm, which boasts 152 turbines, sprawled over Van Wert and Paulding counties, the project represented a $600 million investment and helped generate $2.7 million in revenue for local government and $21.3 million in local contracts, according to the National Renewable Energy Laboratory.
In 2008, First Solar, one of the world’s leading fully- integrated Solar energy companies, announced it would expand its Perrysburg facility, about three hours west of Youngstown, making it one of the world’s largest solar manufacturing and development hubs and growing its work force to more than 800.
According to the National Resources Defense Council, Ohio has 2,100 companies — the fourth-highest in the country — in industries related to the manufacture of components for renewable-energy systems.
As talks to make Ohio the world’s first site for freshwater offshore wind-power press on and cutting-edge work continues on solar technology at places such as the University of Toledo, experts see an advantage to build upon the state’s already robust supply chain and get more projects going.
“Coal generation capacity has dropped below 40 percent in this country,” said Neil Waggoner, an organizer with the Ohio Sierra Club, a national environmental advocacy group. “We are arguing for good green jobs, costs are going down on renewables that are proving themselves to be more efficient and productive.”
Still, the alternative-energy industry is plagued with concerns over cost-efficiencies, leading to rancorous legislative debates at both the state and federal levels. Because research and development is not far enough along, renewable-energy projects often costs millions more than conventional power projects such as building combined-cycle natural-gas plants.
This means renewable sources often require government subsidies and tax breaks.
At the federal level, one such subsidy, the Production Tax Credit, is near expiration and Congress has thus far been reluctant to renew it.
The PTC provides a 2.2-cent per-kilowatt hour discount for the first 10 years of a renewable-energy facility’s operation. However, even with the discount, electricity generated by some alternative sources remains more expensive for the consumer than that generated by conventional power sources.
This poses a problem for state legislatures, which sometimes move to subsidize the costs of transmission, generation and distribution. Within recent years, states have laid out renewable portfolio standards, which require utilities to generate a certain portion of their electricity with renewable energy by a certain date.
In Ohio, though coal accounted for about 78 percent of electricity generation in 2011, the state will require 12.5 percent of its electricity to be generated by renewables by 2025.
Ohio first enacted the law under Gov. Ted Strickland, and even though Gov. John Kasich’s administration has come under fire for certain aspects of its energy policy, it generally receives high marks for having kept the 12.5 percent standard in place.
“These requirements are setting up a market for wind and solar in Ohio to contract with producers,” said Craig Butler, assistant policy director of environment, energy and agriculture for the Kasich administration. “The wind industry and other renewables continue to make progress, but at some point, those subsidies have to go away and the continuation of subsidies is really something the industry needs to get away from.”
Butler added that the Kasich administration supports all forms of energy, but it is unwilling to subsidize one industry over another. Currently, the state only offers Renewable Energy Credits for utility companies that use more renewable-energy sources. Ohio has no production or transmission subsidies in place.
It will become increasingly important to diversify Ohio’s energy portfolio. In 2010, the state’s industrial sector ranked fifth in the nation for energy consumption, according to the U.S. Energy Information Administration. Ohio exports about $1.5 billion each year by importing more than 60 percent of its power-plant fuel, mostly coal, as natural gas accounts for about 10 percent of electricity generation here.
To what extent the shale-gas boom is overshadowing the state’s renewable- energy potential is still a matter of debate.
“Politicians like to chase the latest thing. There’s no question that oil and gas extraction has got a lot of attention here, and we think it holds great potential for Ohio,” Kaiser said. “It’s also important to consider the broader economic history of natural gas — it’s a commodity that fluctuates in price.”
Whether natural-gas prices will remain at record lows depends on the marketplace, but it is likely the price will jump once production drops off. If the operational failures occurring in wind turbines or solar panels can be worked out, more facilities might come online in the future, as the country seeks ways to replace aging coal-fired plants with natural gas and alternatives.
“The technology speaks for itself; we’ve reached a point where utility scale projects are viable,” Waggoner said. “We’re looking to create new jobs and rebuild the manufacturing sector. These coal-burning plants are reaching retirement age and we need to figure out how we’re going to upgrade and generate electricity in the future.”