Nebraskans face a difficult decision. New EPA regulations could require the Nebraska Public Power District to invest more than $1 billion in order to bring old, dirty, coal-fired power plants into compliance. Let’s take a look at what this decision means for rural development throughout our state and the potential for a state-based new energy economy. We’ll then consider the impacts of coal and the role this resource will play moving forward. Do we invest more and more into an outdated energy future or are we ready to move beyond coal?
A Clean Energy Future
We’re now at a critical juncture. Any commitment to retrofitting existing plants will lead to even greater coal imports, transferring money out of state instead of building on the resources we have here at home. An alternative to importing our energy and pushing the true cost of our actions onto future generations is spending money otherwise set aside for coal imports right here in Nebraska. Our goal should focus on bolstering efficiency programs and investing in wind generation, including the transmission infrastructure necessary to make wind a viable option.
According to the National Renewable Energy Laboratory, expanding to 7,800 megawatts of capacity would support between 20,600 and 36,500 construction-period jobs by 2030. We’re far from that number now, but small steps are being made. By the end of this year large wind turbines northeast of Broken Bow will be generating up to 155 megawatts of electricity. While this project is small in comparison to some in neighboring states, its impact is significant: as many as 100 temporary jobs will be created during peak construction and an estimated 10 permanent jobs will last the life of the project.
An investment in wind is an investment in our future, one where rural communities stand to benefit most. Katana Summit in Columbus, one of the state’s largest wind turbine manufacturing facilities, last month had nearly 90 new openings for welders to meet growing demand for wind turbine towers. But they can’t find enough workers. This is true despite the fact that the average northeast Nebraska welder makes $16.79 an hour, according to the Nebraska Department of Labor, and Katana pays $21 per hour or more for senior welders and has raised its retirement, overtime and goal-based incentives.
Virtually none of these orders come from within our own state. Katana Summit is a business created not because of the wind industry here in Nebraska but because of the strong development of neighboring states.
Katana Summit is an example of the rural economic potential associated with wind development, boosting the rural economy of neighboring states by billions each year. Clean energy investments create three times the jobs as fossil fuel investments. Each $1 billion of wind investment will create approximately 12,500 full-time equivalent years of employment. In 2010 the wind sector invested $10 billion in the U.S. economy and employed 75,000 workers. More than 30 manufacturing facilities opened or were announced during this same period.
Potential benefits transcend the jobs that are directly on the construction site. In the state of Iowa alone, landowners reap over $11 million in annual lease payments. Residents and local governments enjoy increased business activity. Local schools receive increased tax revenue. Everyone benefits through better roads, new parks and increased opportunity.
Wind turbines have proven to be a cost-effective solution as we seek to limit our carbon footprint and address climate change. Up to 1,000 megawatts of wind power capacity can offset more than half the emissions of the typical coal plant. Wind power has for some time been cost competitive with coal, in many cases far less expensive. Performance improvements and cost reductions will bring the average onshore wind plant in line with cheap natural gas. In fact, since the mid-1980s, the cost of wind-generated electricity has fallen 14 percent for every doubling of installation capacity. The average cost of wind electricity is expected to decrease by 16 percent by 2016, further cementing this resource as the most cost-effective alternative.
Instead of spending our money on coal imports, we should invest in wind generation to keep our dollars in Nebraska, creating quality jobs for the next generation in our rural communities. That will require expansion of the electric transmission system. The single biggest hurdle the wind industry must cross is not financing or electricity demand but a lack of transmission infrastructure. As of this writing, over 275,000 megawatts of new wind projects remain unconnected due to a lack of available transmission. At a minimum, 30,000 to 40,000 miles of new transmission are needed in the United States by 2030.
The community benefits of increased transmission exist much in the same manner as with wind development. Like wind, each line brings increased property-tax revenue to the area. Like wind, each line brings employment opportunities that will not only get the job done but create business for local motels, shops, restaurants and entertainment establishments. Like wind, property owners benefit. Each property owner along a half-mile section will receive a one-time payment of $88,320 for an easement with two monopoles or $112,320 for an easement with two lattice towers. This does not include periodic bonuses, compensation for lost productivity, signing payments or any annual payments the company and landowner may agree to.
This much needed update and expansion will create a cadre of jobs, capable of complementing those created by increased wind-energy investment. Thirteen thousand full-time equivalent years of employment are created for every $1 billion invested into transmission within U.S. borders. By bringing improved and updated infrastructure to rural Nebraska we are opening the door to not only the economic benefits associated with transmission developments but also to the countless wind projects that will now become a reality.
Coal and Nebraska’s Future
Further investments in coal will translate into a missed opportunity for rural development. Again, these regulations beg the question: is now the time to invest more in an outdated power source or are we ready to move beyond coal?
Nebraska’s largest utilities appear content to continue our reliance on this outdated resource in spite of the cost of complying with new EPA regulations. Today Nebraska purchases over $338 million of coal each year, much of this from Wyoming. To put this into perspective, only five states are more dependent on net imports as a share of total power use than we are.
Do we really want to spend the next 40 years continuing to import our energy when we could instead keep our dollars at home creating jobs in wind and transmission? A recent study published in the “American Economic Review” demonstrates what we’ve known for years: the actual cost of coal generation is 17 cents per kilowatt-hour when factoring in the health and environmental consequences. In 2010 Nebraskans paid an average of nine cents per kilowatt-hour for electricity.
When fossil fuels are consumed, emissions are created, and everyone has to pay the price.
No matter where you live – urban or rural - there is a 50 percent chance that your air is not safe to breathe. Soot and smog created by air pollution irritates our lungs, increases emergency room visits and can lead to irreversible lung damage.
No matter where you raise your children—north, south, east or west—one in 10 will be asthmatic. Asthma is the number one cause of missed school days nationwide, compromising the education of many. Children are most susceptible to air pollution due to still-developing lungs and an active lifestyle.
The impact these newly announced rules will have on rural development and our burgeoning clean energy economy is important both here and elsewhere. Combined, the rules could do away with more than 8 percent of the coal-fired generation nationwide. This will open the door to new efficiency programs, new wind developments and a new generation of needed transmission infrastructure. By forcing utilities to install modern pollution controls, more than 32 coal-fired power plants will be forced to shut down.
We Can Do Better
The Nebraska Public Power District faces a difficult decision. Investing in yet another retrofit to our aging coal fleet will set our state back and commit our state to a coal-based energy portfolio for decades to come. This is against the better interests of all Nebraskans—those who will miss out on new employment opportunities, those who will suffer unnecessary health risks and those ratepayers who have unwittingly entered into a long-term contract with the coal industry. Nebraskans deserve better.
We are fortunate to live in a state where we are able to hold our utilities accountable for the decisions they make. It’s time to do just that.
It’s time to let your local utilities know that further investment in coal power is not the best decision for Nebraska and will tie ratepayers to decades of costly imports, costly upgrades and the cost of missed opportunity.
It is time to urge them to recognize the rural development potential of the domestic, renewable energy available in our own back yards.
It’s time to get it right. It’s time to make your voice heard. It’s time for Nebraska to move beyond coal.