Everybody needs it – energy to power businesses and homes, to give light when it is dark, to help keep people cool in the summer and warm during the cold months.
Fossil fuels, such as coal and oil, lead the nation’s energy sources but renewable energy has become a leading contender and continues to flex its muscles.
Renewables, or what is sometimes called green energy, is shaping the energy sector not only in the Midwest but across the country.
“I think the thing to really look at is what's going on with the trends in energy right now,” said Dwight Patterson, CEO of GenPro Energy Solutions in Piedmont, S.D. “Renewable energy is really taking center stage in the United States as well as globally.”
Renewable energy is projected to grow substantially over the next four years, he said, noting, “it's an incredibly fast-moving market; it's growing very quickly.”
Two renewable energy sources in particular – solar and wind – are especially important to the Midwest.
“As a matter of fact, the Midwest is expected to be a growth area for solar energy like never before in our history,” Patterson said. “We have incredible resources in the Midwest to produce electricity with the sun; and the other side is that the cost has come down so significantly that it's driving that market very rapidly.”
Patterson said the cost of solar energy has been coming down about 15% per year since about 2010, explaining that back then a solar-electric system cost about $7.34 a watt. Today it’s about $1.95 a watt.
“From a utility standpoint, back in 2010 it was about $4.63 a watt,” he said. “Today it's about 95 cents a watt. It's really all about the economics, that is what's driving this industry. Quite honestly, we can produce electricity cheaper than they (the fossil fuel sector) can produce electricity with coal.”
According to information by the Pew research Center, changes in renewable energy will continue to trend upward and will affect the labor market, including demand for new skill requirements.
“A key feature of the modern-day economy is the focus on activities devoted to curbing pollution and greenhouse gas emissions, economizing on fossil fuels and using more renewable sources, increasing energy efficiency, and recycling,” the report reads. “Collectively labeled the ‘green economy,’ these activities give birth to new lines of work. They also either raise the demand for workers in existing occupations or change the skill requirements of some occupations.”
Likewise, the Midwest Economic Policy Institute (MEPI) said renewable energy is poised to be an economic engine for the Great Plains as it recovers from the coronavirus pandemic. However, it said more can be done at state levels “to maximize benefits for workers and the state economy as a whole” so they don’t have to rely so much on out-of-state workers. In North Dakota, according to MEPI, that accounts for about 86% of the workforce on wind projects at a cost of more than $62 million to the state economy.
“The clean energy sector is expected to be a major job creator over the next decade,” reads the Sept. 3 report co-authored by the Institute. “Globally, research has found that doubling the share of renewable energy by 2030 would create about 24 million total jobs.”
For Patterson and his company, that’s all good news, especially since GenPro, which started as a solar water-pumping distribution company and is today a multifaceted renewable energy and efficiency business, is contributing to and following the trends, especially with the labor market as it hires and develops new employees.
Renewables and Job Growth
Taking a peek at how much renewables have grown, the MEPI said in its Sept. 3 report that Minnesota, North Dakota and South Dakota have experienced significant changes in their electricity generation over the past decade.
Wind energy in Minnesota, for instance, made up 4% of the state’s electricity generation in 2007 and grew to 18% by 2018. Minnesota ranked seventh in wind energy generation, despite having the 17th largest economy and being one of the top 10 states with the highest capacity of wind production.
North Dakota, which still relies heavily on fossil-fuel sources, is ranked 12th in the nation with wind being the “most prevalent renewable resource” and accounts for about 78% of the clean energy installed.
South Dakota tells a different story, according to the report. More than 600 wind turbines at 16 active wind farms supplied about one-fourth of South Dakota’s net electricity generation in 2018.
“What has really propelled the growth and development is innovation,” said Jeff Danielson, central region director for the Washington, DC-based American Wind Energy Association, which has 1,000 member companies across the country. “The wind industry costs have come down nearly 60% to 70%. So today, wind energy is the cheapest form of energy on the electric grid, and we don't see that changing in the near future.”
Danielson told Prairie Business that Iowa leads the nation in wind capacity, followed by Texas, but that other Midwestern states are poised for continued growth, meaning more jobs.
“There’s no question the energy industry is a job creator,” he said, explaining the position of wind technician – “the guys and gals who go up into the turbines to do maintenance after they're installed” – is the second fastest energy growing job in the United States. The first, he said, is solar installer.
“It’s really clear that clean energy is fueling new job growth in the United States,” Danielson said. “If you look where it's occurring, it's even more important for states like Minnesota, North Dakota, South Dakota and Iowa. These are national statistics, which means it's even more amplified in those states where that activity is occuring.”
He also said the industry could play a factor in how much the economy recovers from the coronavirus pandemic, noting “there's no question that clean energy could be one of the leading ways to do that” through job creation.
Innovation and Opportunity
Advancements in technology also have played a part in industry growth, even with simple things such as creating longer blades for wind turbines.
“From the early 2000s to where we are today we've seen tremendous advancements in technology” such as longer blades to harness energy and at lower wind speeds, said Ben Fladhammer, communications manager with Minnkota Power Cooperative, a generation and transmission cooperative based in Grand Forks, N.D. “We are seeing more production out of a wind farm today than we would have seen even 15 years ago. … We've seen wind go from almost no part of our energy mix to being a significant part of our energy mix today.”
The cooperative purchases wind energy from three wind farms, operated by NextEra Energy Resources, near Center, N.D., Langdon, N.D., and Valley City, N.D. About 34% of Minnkota’s generation capacity comes from wind.
“At one point we were, and I think we still are, among those having the highest percentage of wind in our system amongst electric cooperatives in the country,” Fladhammer said. He said Minnkota is at or near wind-farm capacity. Some challenges he sees with the wind sector is the Renewable Electricity Production Tax Credit for wind, which is a big driver of wind projects.
“That's scheduled to phase out here fairly soon,” he said, “and so I think when it runs out, or is phased out, you'll see project development slow down.”
Patterson, with GenPro, said there are some challenges he is seeing in the renewables industry as well, but he looks at these changes as opportunities rather than trials, especially as they relate to job growth.
“The difficulty I would say in the market right now is that it's growing so quickly, and the cost has come down so dramatically, that there's a lot of companies out there that would like to engage in the marketspace but aren't really sure how to approach it,” he said. “I think that's where GenPro really shines and why we've grown so significantly. ...
“The traditional utility structure is changing,” he continued. “Even 10 years ago, utilities said they would never use solar because it wasn't cost effective. But that's what they're going to now because it is the most cost-effective solution. There's some late adopters within the industry that resisted change, but change is going to continue to happen, regardless.”
Andrew Weeks may be reached at email@example.com or 701-780-1276.