At issue | Dec. 27 commentary by Andrew V. McNeill, "Who should pick energy winners, losers?"
Andrew McNeill, director of the Commonwealth Institute for Energy and the Environment in Louisville, correctly pointed out that growth in the "green energy" economy right now relies on a heavy dose of government subsidies for project development, production and transmission of electricity. We cannot subsidize our way to prosperity. And despite the need for all consumers to reduce energy consumption, we cannot conserve enough power to offset future energy requirements.
So what to do? Look to the private sector and public-private partnership opportunities. The spirit of entrepreneurship is not dead — especially in the energy industry. As research conducted by groups like the Center for Applied Energy Research is commercialized, it will be the private sector that puts up the venture capital to make theories and blueprints become realities. And part of that work begins today.
ecoPower Generation is in the process of developing and constructing a 58-megawatt baseload power plant in the Coal Fields Industrial Park on the outskirts of Hazard. During construction, we will employ, directly and indirectly, nearly 400 people. Once built, a work force of approximately 500 will be required to sustain operations. Thirty to 40 of those will be high-skilled plant employees; the balance will be fuel supply jobs — loggers and truckers — and spinoff jobs in other market sectors.
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But just as important, it will provide a more stable market for timber companies and the 250 truckers they employ. And the spinoff jobs in other market sectors will employ more than 225.
The plant will use wood waste as the primary fuel source to generate electricity. The waste product would include sawdust, chips and bark from lumber mills, wood chips from utility right-of-way clearing and treetops that are unmarketable and left on the forest floor after timber operations are completed.
That rotting wood waste actually emits methane, which the Environmental Protection Agency has cited as being more than 20 times worse for the ozone layer than carbon dioxide, so a welcome benefit is taking that greenhouse gas out of the forest and using it in a positive and beneficial manner.
This process is considered renewable energy, but it's more than just a buzzword; it's a technology that works 24-7-365. That's not true for wind and solar, which are intermittent and not necessarily predictably intermittent. This woody biomass project holds the greatest hope of creating green jobs in a clean energy environment.
Is it enough? No, not by any stretch of the imagination. Kentucky has approximately 15,000 megawatts of installed baseload capacity. Demand for electricity is predicted to increase 40 percent by 2025. That means additional base-load capacity will be required.
Even if energy efficiency could reduce future demand by 20 percent — which is highly ambitious and practically unattainable — and even if the utility fleet becomes more diversified, we will still need some 2,800 megawatts of new baseload capacity.
ecoPower's 58 megawatt plant has a role in the state's energy portfolio. Our plan is that this is the first of several such plants in Central Appalachia. This single plant will put more than $17 million annually into the region's economy and generate more than $2 million in state and local taxes. Other technologies, including coal conversion and coal gasification, will also have a role in Kentucky's energy portfolio and contribute to economic growth and development.
But it's the private sector, entrepreneurship and public-private partnerships that will create and sustain those jobs.