Renewable Energy Generates Big Money

Renewable Energy Generates Big Money

In the hustle of the last few months, with the airwaves flooded by heavy election and economic news, you might have missed two eyebrow-raising reports about the renewable energy sector. Reports from two of Indiana’s major universities described how the renewable energy sector has the potential to both generate a lot of money through investment and job creation also reduce energy costs by a large margin. Taken together, the research indicates a very positive result for Hoosier communities that decide to switch their energy portfolios to renewable sources.

 

Cost Savings and Other Benefits – Ball State’s Study

In a study titled Economic Effects of the Changing Energy Mix in Indiana, Ball State University economist Dr. Michael Hicks said that Indiana is in the midst of a history-making shift in fuel used to generate electricity, in large part driven by falling cost of renewables.

His research indicated that electricity generation from wind and solar renewable energy sources is now lower than the cost of natural gas or coal. This is expected to lead to a shift toward renewable energy that will result in a net increase in employment and a broadening of the economic distribution of energy jobs across Indiana.

Additionally, the falling prices of renewable energy sources will bring about reductions in energy expenses for businesses and communities.

The study detailed:

  • As renewables grow, Hoosier energy jobs will increase from 29,000 to 33,000 statewide.
  • Electricity generation from renewable energy sources is now lower than the cost of natural gas or coal.
  • In 2019, coal generation was $109/megawatt hour and natural gas was $56/megawatt hour.
  • Over the past ten years, wind energy costs fell from $135 to $40/megawatt hour.
  • Over the same period, solar energy prices dropped from $369 to $40/megawatt hour.
  • Renewable energy costs continued to decline even as federal subsidies decreased.

“Since renewable energy is not susceptible to volatile prices like that of coal or natural gas, consumers can enjoy more predictable prices – and electric bills – as electricity generation becomes more heavily dominated by renewables. Additionally, since renewable energy is not dependent of fossil fuels, there is very limited risk of disruption from global energy markets or fuel transportation,” Hicks said.

 


Energy Costs Over Time, by Typeenergy costs by typeSource: Ball State University

 


 Investment and Jobs – Purdue’s Study

Purdue University published a study titled An Examination of the Community Level Dynamics Related to the Introduction of Wind Energy in Indiana that involved an in-depth look at the economic activity specifically surrounding wind energy. The report’s authors pointed out that even though 2020 was a tough year for business, wind energy remained highly economically stimulating for regions surrounding installations.

“For every 1000 MW [project] built, $400 million in economic activity is generated. And this comes at a time when unemployment is high, businesses are being forced to close their doors, and markets are volatile. I can’t think of a more economically stimulating project for a rural community to take on,” said Jackson Keith, director of The Land & Liberty Coalition, which released the study along with the Indiana Conservative Alliance for Energy.

Additional highlights from the report described:

  • Annual payments to landowners are estimated to be $3.7 million per year.
  • Local property taxes on wind farms (that were featured in this study) are estimated to be $6.5 million per year.
  • The cumulative value of investments in Indiana’s wind sector is about $5.0 billion.
  • In 2008, only about 8,000 acres could reasonably be considered for wind energy development. Now, nearly 53,000 acres meet the threshold for viability.
  • Indiana’s first 1000 MW of wind power was associated with the employment of 690 full-time equivalent workers and $64.5 million of additional economic activity during its two-year construction phase.

 

The Way We’re Headed

Numbers like the ones presented in these studies are sure to gain traction with utility organizations, companies, and community developers throughout the state due to their very attractive returns. It’s likely that we’re going to be seeing this trend not only continue but accelerate because of how much there is to gain. We’re going to be cleaning up, so to speak, in more ways than one as we switch to more and more renewables.

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