Powering America: The Critical Need for Transmission Investment to Spur Growth

Economic investment has been a common theme in Washington, D.C., over the past few years as the country struggles to recover from the blow it took in the recent financial downturn. Politicians are pushing for expanded research and development, while physical capital investments have largely centered on base infrastructure such as bridges and outdated rail systems. But surprisingly little attention has been paid, at times, to the critical issue of electricity transmission and distribution.

The Department of Energy (DOE) reports that the U.S. electricity grid spans more than 300,000 miles of transmission lines connecting more than 1 terawatt-worth of generation capacity to hundreds of millions of homes and businesses. While the DOE suggests the system is still 99.97 percent reliable, outages still cost more than $150 billion a year and appear to be steadily impacting more and more people.

With electricity demand outpacing investments in transmission capacity by nearly 25 percent a year for the past three decades and peak demand expected to increase another 20 percent in the next 10 years, the problem only stands to worsen. It is time to stop taking our energy infrastructure for granted.

Energizing Employment

While our transmission and distribution systems serve to bring us the power we have come to rely on for almost every aspect of our daily lives, it is also a significant source of employment. Electrical grid workers are no small part of the U.S. economy. The Bureau of Labor Statistics (BLS) reports that occupations related to electric power generation, transmission and distribution accounted for over 300,000 jobs nationwide with a mean annual salary of over $65,000.

The Working Group for Investment in Reliable and Economic Electric Systems (WIRES) suggests that the country could see a major surge in employment with only a relatively modest investment in our electric infrastructure system. WIRES projects that barring regulatory and permitting issues, the transmission sector is likely to spend between $12-16 billion per year on upgraded transmission. This level of investment would lead directly to between 51,000 and 68,000 full-time jobs annually, with anywhere from 150,000 to 200,000 total full-time jobs produced a year as a result. The total economic return on these investments is estimated at around 250 percent.

In large part this is because transmission, unlike many sectors, is an eminently local industry. The group estimates domestic costs at roughly 82 percent of the total, with construction, design, permitting and most other facets entirely contained within the U.S.  Even materials, which account for 45 percent of total costs are still estimated at 61 percent domestic.

This kind of investment could prove particularly important for the struggling construction sector, which the BLS reports saw an unemployment rate of 14.2 percent in October 2011. The broad installation category saw a far lower rate of 7.2 percent, which still leaves 388,000 people in that sector out of work, though this also includes workers from multiple industries.

Vital to Green Energy

While traditional power sources face many of the strains imposed by an outdated grid, the current limitations of the U.S. transmission system pose an even greater problem for renewable power. Renewable energy sources like solar and wind power must contend with intermittency, generating electricity in inconsistent and often unpredictable patterns. With limited transmission capacity, these power sources can overload the grid at times of unusually high production.

Yet WIRES notes that current standards on how much power must come from renewable sources already require doubling the amount of renewable generation by the end of this decade. Under a stricter 20 percent national standard, this growth would be more than 350 percent by 2020 and 450 percent by 2025. Under the more modest current standards the U.S. would still need nearly $60 billion in transmission upgrades by 2025 just to accommodate growing renewables. At the stricter standard, that number would be more than $100 billion. Either way a significant investment in our energy infrastructure is going to be required to sustain reliability.

Facing the Issues

WIRES suggests that transmission companies are likely to spend billions each year on expanding and developing the grid in coming years, which might lead some believe the issue is well in hand. But these investments are only likely to come with the resolution of some serious issues in the development process. Because transmission lines cross numerous political boundaries and are often seen as unsightly, these projects can become major targets of protest, extending the approval process and dramatically raising costs. Many companies also have no realistic ways to recoup the costs of building further transmission lines, as the systems in place are designed at the state or lower levels with monolithic utilities in mind.

The Federal Energy Regulatory Commission attempted to address some of the prevailing concerns with the approval process over the summer, introducing Order No. 1,000 in June. The regulatory agency imposed new rules requiring a greater degree of regional collaboration on transmission development, though also required the costs of these projects be targeted specifically at those who directly benefit from them and that utilities consider non-transmission alternatives first. However, one crucial development for easing the approval process was ending the practice of granting local utilities the first right of refusal on transmission projects.

In addition to these more recent changes, the American Recovery and Reinvestment Act of 2009 set aside more than $1.9 billion for the distribution and reliability improvements to the grid, but many of the procedural concerns loom larger in the industry's eyes than the outright costs.

Nevertheless, a paper produced by the Federal Reserve Bank of San Francisco found the infrastructure investment of the ARRA resulted in substantial job gains in the years since, making addressing the lingering issues in the electrical distribution system an important point for encouraging economic and job growth in the country.

Drilling Down: What Can Geothermal Do for You?

The once overlooked geothermal industry is a fast rising energy sector poised to create thousands of jobs

Geothermal energy is far from new, but only recently has this renewable resource truly begun to garner a more comprehensive look into how it can serve as a viable commercial power source.

Geothermal energy is thermal energy naturally stored within the earth. When utilized to generate electricity, geothermal power is an effective, environmentally sound and sustainable resource.

Research, investments and project developments in the geothermal power industry are on the rise; more importantly, so are the jobs associated with this burgeoning energy sector.

Burgeoning Business

According to the International Geothermal Association, as of 2010 more than 10,000 megawatts (MW) of geothermal power is currently being utilized, a nearly 20 percent increase in active capacity since 2005. In 2010 the United States led the way in geothermal electricity production with more than 3,000 MW of installed capacity from 77 plants.

The Geothermal Energy Association (GEA) recently revealed the findings of new industry reports that show the geothermal industry will add thousands of jobs as dozens of new geothermal power plants come online or enter advanced stages of development. Furthermore, these reports highlighted that the geothermal industry is not just creating more jobs than most conventional energy per megawatt, but jobs that are permanent, full-time and often providing a higher wage.

Growth Potential

The GEA anticipates that 2011 will be a high point of geothermal activity in the US, yielding approximately 500 to 700 MW of power projects in the final construction phase. These projects will add approximately 3,000 construction jobs, primarily in Nevada and California.

Nevada is an excellent example of the rapid and significant potential impact the growth of geothermal can present to a regional economy. In July 2010, the GEA said the growth of the geothermal industry in Nevada alone could be worth as much as $22.5 billion over the next 30 years if current trends continue.

With 14 geothermal power plants in the later stages of development, after groundbreaking these projects would create an estimated 1,400 construction jobs in Nevada.

“This high volume of geothermal projects moving into final stages of development will likely generate a massive geothermal boom in Nevada,” said GEA Executive Director Karl Gawell. “Along with the millions of dollars in federal and private investment, come thousands of new jobs.”

Governmental Support

The GEA report “Green Jobs through Geothermal Energy” also found that the federal stimulus, tax incentives, and strong state renewable standards continue to fuel the growth in geothermal power and job creation. Every geothermal project that came online in 2009 took advantage of the tax reimbursement provisions of the stimulus bill, which helped maintain momentum for new projects and continue to create new jobs in America.

It is also important to recognize that the benefits of the stimulus to the geothermal industry have yet to be fully realized. Nearly 95 percent of the projects receiving American Recovery and Reinvestment Act (ARRA) funding are either less than 50 percent complete or have yet to break ground.

“Recovery Act funding is going to make a huge difference over the next year to push projects to completion and create more jobs. The majority of the ARRA investment will really start to pay dividends for the economy in 2011,” said Karl Gawell, GEA Executive Director. “It is critical that we continue to support these sound policies despite the rancor of several short-sighted initiatives which seek to strip away these tools to help grow our economy.”

Diversified Portfolio

The ARRA also appears to have attracted diverse groups into the geothermal sector. Almost half of the Geothermal Technologies Program awards from the stimulus went to non-industry entities such as colleges and universities; cities, counties, and other state and local institutions; tribal entities; and The Department of Energy’s National Labs.

This trend in diversity within the geothermal sector is only proving to bolster the emerging industry. As more geothermal jobs are being created, a number of educational providers across the country are establishing undergraduate, graduate and certification programs to meet demand.

“To keep creating jobs in the geothermal industry, we must keep getting talented individuals coming into the industry. The programs at these leading schools will develop the next generation of geothermal professionals,” Gawell said.

Geothermal energy has stepped beyond its once understated status into a promising sector with the potential to offer not only sustainable energy, but also sustainable jobs.

Finding the Green Workforce

While there may always be room for debate concerning clean energy initiatives and the long-term merits of a low carbon driven economy, what remains is the fact that the renewable industry is growing rapidly and it requires a substantial workforce.

As renewable energy continues to establish itself in the global market, an emerging concern is how to fill the industry’s need for skilled workers. According to a poll conducted by the Society for Human Resource Management, 40 percent of HR professionals say their organization is currently focused on creating green jobs or adding green duties to existing jobs. Further, a comprehensive report from the American Solar Energy Society forecasts that more than 17 percent of all anticipated U.S. employment could be generated from the renewable energy and energy efficiency industries over the next two decades. The need and opportunity for a green workforce is apparent, but are there enough skilled workers to meet demands?

The good news is there has been a tremendous cultivation of resources for training, funding and development in the renewable energy sector within the past five years. A good number of educational providers have expanded or modified their curriculums to include renewable education and training programs in response to the growing demand.

The U.S. government has also stepped up its efforts, paving the way in funding to support the creation of a competent green workforce through programs supported by the American Recovery and Reinvestment Act of 2009(ARRA). The U.S. Department of Labor’s Program of Competitive Grants for Worker Training and Placement in High Growth and Emerging Industry Sectors has been allotted $750 million through the ARRA to provide competitive grants for worker training and placement. Of that, $500 million is specifically for research, labor exchange and job training projects that will prepare workers for careers in the renewable energy and energy efficiency industries.

Companies in and outside of the renewable sector have also begun to invest in developing their own training courses in the hopes of attracting the workforce they are seeking and repurposing positions for renewables.

Now for the bad news; although there is an existing abundance of resources to support the establishment of a multi-level green workforce, there are far less available to bring these initiatives together or provide information to help establish realistic industry standards for recruitment. Which begs the question, is there truly a shortage of qualified workers or simply a shortage of renewable focused information, standards and hiring resources?

To move forward in creating the workforce needed for the renewable sector there must be a collaborative effort to establish a framework for industry knowledge, recruitment and training that will evolve into recognized standards as the industry matures. Establishing an understanding of just what quantifies a green job will lead to helping to define what is required to fill one. Developing resources to share information between industry insiders, education providers and recruiters will help balance expectation, shape training programs and, more importantly, highlight how existing skills can be re-tooled to benefit the emerging green industry.

One of the more attractive aspects of renewable energy is how balanced the industry is in providing career building paths across a vast array of skill sets. Low- to medium-skilled workers are needed for manufacturing, installation and maintenance; while highly skilled employees are needed for research, development and leading the commissioning of renewable services.

The issue does not appear to be a lack of workers to fill these roles but a lack of information and expectations on the part of those seeking workers. Until standards are established and enough time has elapsed to develop a seasoned body of workers within the industry, it’s simply not plausible for companies and recruiters to require advanced degrees in specific renewable niches or the equivalent amount of experience in service to it.

An available option is to take a more realistic inventory of the existing workforce with the purpose of grooming it for the green industry. Among those who are unemployed or underemployed there is the opportunity to utilize existing skills or higher-level disciplines that can be restructured to work within the renewable energy sector. Veteran solar engineers may not be numerous, but environmental engineers are certainly available.

Recent technical or college graduates are in a unique position to offer fresh perspectives, a clean learning slate and innovative thinking to an industry that is still forming itself. Those entering the workforce as unskilled laborers will not only benefit from highly subsidized training in a growing sector but can also provide the industry with the workforce needed to build its infrastructure through apprenticeships and vocational rehabilitation programs.

Meeting the demands of the renewable industry is not only attainable, but under many circumstances requires a very manageable investment on behalf of the industry. Finding the green workforce could be as simple as utilizing what is right in front of us.