Have you ever considered the possibility of investing in and owning your own renewable energy project? I am not referring to putting up a wind turbine or solar panels at your house, although that could make sense for some. What I am referring to is Community Based Energy, where people in a particular community decide to co-develop their property, their farms, or common property within the community into a renewable energy project; a project that they invest in, own, and profit from.
Let's take wind, for example. You have probably heard of farmers, or large property owners, or groups of property owners leasing their land to developers who invest in installing large utility scale wind turbines to sell the energy they produce back to a utility in a long term contract called a power purchase agreement (PPA).
The concept of Community Wind does not focus on an outside developer owning and developing the wind farm for the developer's benefit, but rather the community, or members of the community, coming together to invest in a project that serves its own needs and provides a financial and energy benefit. The distinction is that the community owns at least a portion of the development.
Community Wind projects stimulate the local economy by keeping energy investments local, creating new jobs, and broadening the tax base. It is likely that support for wind energy will increase, as local people become deeply involved.
In Michigan, there are several examples of people committed to exploring community renewable energy projects on small and large scales. The DEQ state facility in Bay City just installed a 50 KW wind turbine to power its facilities. Wyandotte Municipal Services, a community owned municipal utility, is far down the path of creating a community wind project. It expects to have two to five 1.5 to 2.5MW turbines on line in the fall of 2010. Groups within the communities of Empire and Northport have formed to explore the possibility of attaining 100% of energy from renewable sources. And the list goes on!
There are things to take into account when considering a Community Wind project, such as:
• Wind – without an average wind speed of at least 5.6 meters/second (12.5 miles per hour), the economics just don't make sense. With continued technology enhancements, this may change over time, but for now, the better the wind, the better the financial payoff.
• Access and proximity to transmission lines that can accept the power the project will provide.
• Land – the planned land use has to be consistent with a wind project development.
• Be in an area where environmental conditions like wetlands, protected species, and sensitive areas can be protected or mitigated.
• Local ordinances that are favorable to wind project development and a community educated on wind is critical.
• Determine how best to take advantage of the various tax incentives and legislation currently available.
• If all of the conditions are right, you'll need to have a buyer, like a utility, for the power you generate.
Why would you want to take on the additional risk and responsibility of owning a complex, capital intensive investment like a wind farm, when you can lease your land to a developer? Some sources say that owning a wind farm can double or triple the income to landowners, compared to receiving lease payments1.
There are complexities that will need to be considered, and you should engage professionals with industry experience, credibility, and success with similar projects. Finding and using such experience will help create a significant contribution to sustainability at the community level by enhancing the triple bottom line of people, planet, and profit.
1United States Government Accountability Office. Renewable energy: wind power's contribution to electric power generation and impact on farms and rural communities.
Perhaps it's because my kids are in college or recently graduated that I am more sensitive to the stories I hear regarding the exodus of our educated youth. Recently, I talked to one graduate from a local business school who said that not one classmate that she knew who landed a job was able to stay in-state. Whether this is true or not, in order for Michigan to thrive and grow, we need to create opportunities for our next generation of future leaders and support them in their development.
It was on this premise that I became involved in a unique approach to leadership development. On October 15, Next Energy of Detroit will host the first Environment and Energy Epprentice. This innovative program challenges emerging executives to solve real world problems while developing their leadership skills. Participants are split into teams and create proposals for energy efficiency, and environmental sustainability and energy as an economic driver. The winning proposal will be used to benefit the non-profit sponsors of Warm Training, Michigan Municipal League, Global Wind Systems, and Michigan Wind Institute.
To support these emerging leaders, some of the region's top executives from the energy and environment sectors will be judging the proposal submissions, such as Gilbert Borman, Executive Director, Michigan Wind Institute; Liesl Clark, Deputy Director, Michigan DELEG; and Nick Flores, Capital Access Program Manager, Green For All to name a few. I also am excited to be joining the Epprentice as a judge.
In an effort to bring hope, passion, and excitement to our future generation of leaders, graduate and undergraduate students from all of our state's major universities will be participating. In addition, a group of eight students from local high schools will be joining, sponsored by regional energy leaders such as ITC Holdings, Lakefront Capital, and the Wixom Energy Park.
What I see in this program is an innovative way to get our future leaders collaborating on big issues while they learn and grow their own skills in leadership. And I am pleased to see the outpouring of support from our current leaders in the environment and energy fields. I am hopeful that this program, and other programs like this one, can create the catalyst needed to attract and keep young talent in our region.
Concerns about sustainability and diversity in our national energy portfolio are not new. Discussions on the reality of Global Warming and how to curb it continue. Reliance on foreign oil continues to be at the forefront of our economy. Regionally, manufacturing that once supported a large portion of our workforce remains under pressure.
Can you imagine what the concerns will be 20, 50, even 100 years from now? Will we still be focused on the same issues...or will we have created the sustainable economic and energy portfolio of the future? I'm hopeful that our efforts today will pay it forward tomorrow.
None of us can be sure of what the future holds. What I have seen, and am inspired by, however, is how many creative resources are committed to a future where the air we breathe is clean, where the world can support food and energy needs from local sources, and where people have the opportunity to engage in meaningful work.
On June 26, 2009, the US House of Representatives passed the American Clean Energy and Security Act, House Resolution 2454. Much like Michigan’s Act 295, its intention is ‘to create clean energy jobs, achieve energy independence, reduce global warming pollution and transition to a clean energy economy.’
One of the components to the national bill is a Carbon Cap and Trade System. Simply put, Carbon Cap and Trade puts a national limit on how much greenhouse gas the nation is allowed to emit and creates a national trading system for greenhouse gases. Companies can "trade" allowances or "credits" between each other for the right to emit pollutants, turning these emissions into a commodity that can be bought and sold. In theory, this market will balance pollution reduction at the lowest possible cost.
Along with the Cap and Trade system, Act 2454 proposes a Renewable Electricity Standard (RES) of 20% by 2020, starting with 6% by 2012. The proposed RES goal allows for several provisions such as Energy Efficiency credits in lieu of pursuing new renewable energy. These provisions have the potential to chip away at the 6% objective in 2012, taking the overall production from renewable generation to just 4.1%, a negligible increase over current levels.
Specifically, the House RES in H.R. 2454 would require roughly 5,000 to 6,000 MW of new renewable capacity on average per year between 2010 and 2021, but renewable capacity installed in 2008 alone was over 9,000 MW. Personally, I feel that a bolder National Energy Bill with a stronger emphasis on RES is needed to support investment in technology, manufacturing, and growth in diverse, renewable energy sources.
Now is the time to understand the varying options and proposed legislation, so we can begin to resolve these issues today. Diversity and sustainability is the least we can provide for tomorrow's generation.
When you hear people talk about energy, you undoubtedly hear these questions. How imperative is it to diversify our source of energy with renewable sources? And how will a diversified portfolio of energy resources help to create a sustainable future in terms of the health of both the economy and our earth?
Last October (2008), Michigan enacted Public Act 295 (PA 295). This act requires our state's utilities to generate 10% of electricity from renewable sources (solar, wind, geothermal, hydro, tidal, etc.) by 2015. The bill also required a Net Metering policy to be established, which allows consumers to 'spin the meter backwards'. If you generate more power from renewable sources than you use, you get credit back from the utility on your next bill. There are limits as to how much power you can generate, and different rates for various levels of power.
The purpose of Act 295 is to promote the development of clean and renewable energy and energy efficiency to diversify energy resources, provide greater security by using state generated resources of energy, encourage private investment in renewable energy and energy efficiency, and to provide improved air quality. I think that if you ask most people these days, they would add the expectation of creating jobs in a growing industry.
Is this legislation enough to support diversity and sustainability in our economic and energy portfolio? I believe it's a start.
Since last year, there has been a lot of activity to support the intention of the Act, including putting net metering laws in place to create incentives for consumers to utilize their own renewable sources, creating an on shore and an off- shore Wind Board to study the potential for wind energy in Michigan, incentives on the state and federal level to support energy efficiency and renewable energy, stimulus funding, and green jobs initiatives.
Next week (October 6-7), the Midwestern Governors Association (MGA) Jobs and Energy Forum meets at Cobo Hall. "In order to transform the Midwest from rust to green", the MGA, including Governor Granholm, will meet to identify strategies to create the new energy economy.
Every where I turn, I see examples of companies, universities, non-profit organizations, and individuals committed to developing a clean energy economy in our state, such as Next Energy which was created in 2002 to become one of the nation's leading catalysts for alternative and renewable energy. I see architects like A3C in Ann Arbor creating an UrbEn Retreat and renovating their building with a green roof, a geothermal system, and several other sustainable changes to become LEED – CI Gold certified. I see the Monroe based IHM Sisters investing in geothermal system to reduce their heating costs, a greywater collection system to reduce water use, and an impressive renovation that reused or recycled much of the existing facility.
Just a few weeks ago, the announcement about a renewable energy park at the Ford Wixom plant came out. As you listen to what's going on in our region, look for evidence of how we are diversifying our energy sources and our economic portfolio. I see evidence that supports a distributed, diverse portfolio of several energy sources and economic drivers that will sustain us well into the future.
Sustainability, Diversity, and Portfolios
Overused words – perhaps. You hear them repeatedly and in many contexts. Sustainable living, sustainable design, sustainable environment, sustainable farming. Cultural diversity, managing diversity, importance of diversity, diversified assets. Job portfolios, renewable portfolio standards, financial portfolios.
I think of these words as concepts to consider as our state and the people who live here face uncertain and critical times. What's going to pull us out of this uncertainty? How are we going to adapt? And how can we influence a sustainable, diverse, portfolio of jobs, energy, businesses, and leadership to create an attainable future for ourselves and for our children?
I believe the only way out of the crisis we is to create a sustainable and diverse portfolio of all of these components. Whether we are talking about our own career portfolio, an energy portfolio, an economic portfolio of businesses, or our leadership portfolio, I believe that to flourish and grow, we must commit to changing the way we work and the way we live.
Let's talk first about changing the way we live.
Changing the way I live became a personal theme over the last year, after being downsized from an executive role with an automotive intelligence and marketing solutions company. I realized this was an opportunity to reevaluate what was truly important to me and make a shift where I felt my contribution was going to make a difference. I felt a strong pull to pursue something that would leave the world a better place than I found it. Altruistic? Absolutely. Unrealistic or improbable? I didn't think so.
My sister, a LEED AP Architect, and other friends inspired me to check out what was going on in the renewable energy industry. I set out to learn as much as I could, as quickly as I could. I attended conferences like the Renewable Energy Technology Conference (RETECH), the Great Lakes Renewable Energy (GLREA) educational sessions, the GLREA Michigan Wind Conference, Michigan's Energy Fair and the American Wind Energy Association (AWEA) National Wind Conference. I engaged with local networking groups such as EcoTuesdays and worked with Paragon Leadership, a leadership development firm sharing in my passion and vision for developing leadership in environment and energy fields. I volunteered my time in areas where I could make a contribution. I talked to anyone who allowed me the time to investigate the business, to network, and to learn how I could best serve this growing industry.
Thanks to all of those who offered me their time, their insights, their interests, and their own stories of how they embraced change, I am now enjoying my working life more than I ever have.
I love the opportunity to learn about something I feel so strongly about and to help a company grow to serve the needs of our customers in a way that so clearly impacts the future of our world.
Here's my question to you: What are you doing to create a sustainable, diverse portfolio for your own career? Regardless of where you are now, or where you have been, how have you adapted for the future? How have you diversified your assets to create your own portfolio of offerings for the marketplace of the future? And most importantly, how have you integrated what's most important to you in your job where most of us spend at least one third of our time, and have you created balance in other areas of your life that are perhaps more important than any job you will ever hold? If you are interested in renewable energy, the upcoming AWEA Small and Community Wind Conference or Environment and Energy Epprentice™ may be a place to start exploring.
As we all know, gone are the days of spending your entire career at one company. And for many, gone are the days of working in a single industry. Even though it's not easy, I am happy to say so long to the one company career, and welcome to creating a future based on a sustainable, diverse portfolio of assets and interests.