With the economy still languishing and no dramatic change in sight, questions need to be asked: Is the green movement retaining the fervor it had seen in the past? Does alternative energy have a shot at becoming a diversifying factor for Nevada? How will the movement ultimately affect Nevada’s diversity base? Are the jobs there for the long run? Does the industry stand on its own without government subsidiaries? And should Nevadans stop putting money into or simply view it as a long-term investment that needs to be made?
Much of the state’s hope for the future lies in the answers.
“The green movement is alive and well,” reports Stacey Crowley, AIA, LEED AP, Director of the Nevada State Office of Energy. “What was once considered unique or premium processes/materials are now mainstream practices stretched over the breadth of the industry, from sustainable planning, material content, building design and technology advancements.”
Policy such as the Green Building Tax Abatement (for LEED silver or better facilities) did “precisely what it meant to do,” Crowley maintains, “transform the market and turn the unique into the everyday. Green office space is now expected in new construction and alternative energy systems, such as solar photovoltaic arrays, are getting closer to grid parity every day.”
Robert F. Boehm, PhD, PE, Distinguished Professor of Mechanical Engineering and Director of the Energy Research Center of the Howard R. Hughes College of Engineering in Las Vegas, sees the green movement as “taking on a little different flavor, primarily due to the economic situation and the related ability to secure loans.” Several projects and technologies are ready to move ahead, he points out, “but finances have restricted movement forward to slow considerably if not grind to a halt.”
Is the green movement retaining its verve? “My short answer is yes,” responds Bryan McArdle, Program Manager for the Nevada Institute for Renewable Energy Commercialization (NIREC) in Incline Village. “Now more than ever you have people focusing on energy efficiency and offsetting their energy consumption with renewable energy. Cities are installing LED street lighting, companies are focusing on energy efficiency and energy management throughout their buildings, residents and businesses are installing solar panels, and people are starting to drive hybrid electric and pure electric cars.”
No longer, McArdle continues, are these things seen as cutting edge but rather common place. “I noticed the other day that my dentist had installed solar panels on the roof of his building. I was impressed that (he) was so forward-thinking, but I also realized how common solar panels have become. So yes, I think the clean energy movement has gained its momentum and will continue on a steady pace from here.”
“I think it’s losing it,” differs Dr. Oliver Hemmers, Executive Director of the Harry Reid Center for Environmental Studies, “but it’s also part of the whole economic situation. Everything seems to be in a slowdown these days, and so it’s hard to pinpoint what’s affected by what.”
The tenor of the times more than anything intrinsic, Hemmers suggests, has taken Americans’ minds off – to some degree, at least – seeking cutting-edge green solutions. “People just are in more of a survival mode rather than worrying about the next technologies. It’s just normal shift in people’s behavior in general, and politicians of course react to what their constituents are mostly concerned about. It’s not a hot topic at this point, I would say.”
Diversification
Alternative energy does, indeed, have a shot at being a diversifying factor for Southern Nevada, according to Boehm. “It can help somewhat, but compared to our neighboring states, particularly California, Arizona, and New Mexico, our possibilities are not nearly as positive.” What he means is that the neighboring states already have a “huge head start on us” by virtue of the fact that they are home to so many of the high-tech companies.
Alternative energy and alternative fuels have steadily moved into the Nevada economy, Crowley explains. A host of companies have grown out of the green building industry, including those that support the gaming properties that took advantage of the green building tax abatement – biofuel plants, recycling facilities, and solar installation contractors among them.
“While no industry will alone transform the current economic condition, diversification is an essential tool to warding off the peaks and valleys of the market,” Crowley notes. “An effort to fully understand the upstream and downstream economic impacts of the clean energy industry is underway, calculating the multiplier of impact to the engineering trades, the contractors, the suppliers, the attorneys the environmental scientists, the technology companies, etc.”
“NV Energy, on behalf of its customers, has secured the energy from approximately 45 diverse renewable resources that are operating or being built throughout our state, and remains committed to incorporating all resources that present value for our customers,” says Jennifer Schuricht, Public Relations Manager – South Region for NV Energy in Las Vegas. “We will make our 2011 Renewable Portfolio Compliance filing with the Public Utilities Commission of Nevada by April 1, 2012, and we anticipate meeting or exceeding the 2011 and 2012 minimum requirement of 15% RPS energy and credits.”
A number of renewable facilities will begin operating this coming year, she points out, including Nevada’s first wind project. A key part of fostering this industry, Schuricht adds, is ensuring that the already contracted renewable facilities are able to successfully move forward after they sign agreements.
Subsidies
Subsidies do, at present, support some aspects of the industry.
According to Crowley, federal subsidies in the form of tax credits or loans, and stimulus funds “as well as our state’s tax abatement program for renewable energy, manufacturing and green building have provided incentives to move the burgeoning industry forward in an economically challenged environment.” Because of the initial incentives, she adds, many of the technologies such as biofuel science, waste to energy plants, and solar photovoltaic panels have significantly reduced in price, allowing the market to slowly become successful without subsidies.
“However, at this point, incentives are still important to the industry, where traditional funding sources are still not viable,” Crowley says. “With programs such as our new DOE grants for reducing barriers to rooftop solar installation and increasing energy efficiency of commercial and residential buildings, we hope to eliminate the need for subsidies.”
Government subsidies have facilitated the increase in manufacturing in the renewable energy sector, and have resulted in significant drops in prices. Boehm believes it won’t be long — the National Renewable Energy Laboratory estimates about three years — when solar energy, for example, will have what is called grid parity. “That is, power generated renewably will be cost effective compared to ‘conventional generation.’ This will be the situation with no associated subsidies for solar.”
Boehm urges Nevadans to look at what is happening to the prices of the various means of generating. For example, he notes, photovoltaic cells have dropped in price significantly in just the last year. “Regarding subsidies, a commonly held belief is that solar, etc. are receiving lots of support money and the other sources are doing fine in the ‘free market.’ The facts indicate quite the opposite.”
Conventional sources are indeed doing well — see the profits in the petroleum industry — but they receive considerable Federal support. Renewables receive very little in comparison. “The problem for renewables is their governmental support is quite public,” Boehm says, “and conventional energies have their subsidies hidden by the suppliers.”
The goal, as NIREC’s McArdle highlights, is to reach grid parity: a point at which the cost of renewable energy production meets or exceeds the cost of fossil fuel-based energy production. “We are seeing signs that some places will reach grid parity within a decade. But that is taking into account tax credits and subsidies. Without the subsidies you would not have the hybrid electric vehicles that are hitting the market today. You would not have had the large growth in solar panel installations and you would not have seen the cost of solar decrease. Large renewable energy plants would not have been built.”
McArdle believes the subsidies got Nevada over the hurdle to help renewable energy compete with traditional energy sources. “Now that we have reached a level where these resources and technologies can compete I think they will be less dependent on subsidies and can stand on their own.”
Looking Down the Road
Boehm believes that “we have a potential role for some fabricating facilities, much like the Amonix one in North Las Vegas, if the companies do not think they have to have them adjacent to their higher tech operations.” Another potential source of employment, although on a much smaller scale, is power plant construction and operation.
“The big issue here is if there is a market for Nevada-generated renewable energy,” Boehm posits. “Our in-state market is quite small. We will need to be able to send some of our renewably-generated energy to surrounding states like California, and it remains to be seen if this kind of market can be developed significantly.” There are jobs for Nevadans down the road, he adds, but “not nearly as many as some of our neighboring states will enjoy.”
Like others, McArdle sees renewable energy and clean technology as long-term investments. The auto industry, he points out, has just started mass producing hybrid electric vehicles. “There are still many technological advances that can be made in the drive train and battery technology that will push this industry forward. Developing a smart grid will allow users to be more energy conscious and efficient.”
Advances in technology will not only make things more efficient but decrease costs, he insists. “Once we reach a point where it makes sense to build a concentrated solar plant rather than a coal-fired power plant you will know that the landscape has changed and the industry is has reached maturity. There will always be new advances to be made to not only find new sources of clean energy but make things more energy efficient so that they use less of it.”
McArdle calls Nevada solar rich, explaining that when looking at the National Renewable Energy Laboratory’s (NREL’s) solar resource maps, it has some of the largest concentrations of solar resources in the nation that can be converted into energy using photovoltaic (PV) solar panels or concentrated into heat that drives turbines. “This vast resource will allow Nevada to harness that solar energy into power that is pumped into transmission lines and sold throughout the region.” Boulder City, he adds, has had success building large-scale solar PV projects, and that before long Tonopah will have a 110 MW concentrating solar power plant. It will use the sun to heat molten salt which can generate power even after the sun goes down.
“Not only does Southern Nevada have a large solar resource right outside its door, but there are companies in Southern Nevada putting people to work in clean technology,” McArdle explains. K2 Energy Solutions of Henderson, for example, develops and manufacturers lithium ion batteries for use in electric vehicles and other equipment.
“They just announced that they have attained profitability,” he concludes, “and were recently listed as number 79 on Inc. Magazine’s list of fastest growing companies. K2 Energy Solutions is good example of the companies Nevada can support in clean technology.”
