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Wednesday, March 31, 2010

Will Clean Energy Help Wisconsin’s Job Prospects?

A Q&A with wind power advocate Randall Swisher

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One of the biggest questions posed by the state’s proposed Clean Energy Jobs Act is whether it will produce more jobs in the state or force manufacturers to cut their workforce because of increased energy costs.

Last week, Randall Swisher, former executive director of the American Wind Energy Association, spoke at the Green Energy Summit in Milwaukee about the economic advantages of renewable energy. Prior to his visit, Swisher explained to the Shepherd why Wisconsin should embrace homegrown renewable sources of energy like wind power.

Shepherd: Texas is the leading wind producer in the country, the result of a fairly aggressive, deliberate strategy by that state’s policy-makers. Are there any lessons that can be learned from Texas’ experience?

Swisher: Partly, that the public supports going in this direction. The second lesson that we learned is that, when you put a lot of wind [power] on the system, it’s a lot more cost-competitive than people realize. The technology works and it’s not as difficult to integrate it into the electric utility system as a lot of people seem to believe. Because the wind doesn’t blow all the time, people sometimes think this could never amount to much or it’s going to be very difficult for public utilities to utilize it. You know, none of that is true.

Also, Texas has done a good job in terms of understanding that if you want to access the wind resource, you’ve got to ensure that you can deliver the power to where people need it. And that means that transmission is important to the future of wind in this country, and Texas is really leading the way with that. They’re spending like $5 billion building transmission lines over the next few years to access wind resources in west Texas. And the thing that’s particularly amazing about it is that the benefits to consumers of getting those lines built and getting the extra wind in the system would save customers about $2.5 billion a year. So they’ll pay for the line in about two years.

Shepherd: What’s your take on the impact of the Clean Energy Jobs Act on energy costs and jobs in Wisconsin?

Swisher: I’ve looked at some of the analyses and it seems like almost every analysis that has been done—other than the analysis that was commissioned by the major industrial customers [Wisconsin Manufacturers & Commerce (WMC)]—demonstrates that in fact [the bill] won’t have a severe impact on the economy and will be a net source of jobs. So you begin to wonder about the assumptions that were at the heart of the study that the major industry groups commissioned.

But [the WMC study] clearly doesn’t square with the facts as I understand them about the relative cost-competitiveness of wind and other renewables to meet the needs of the state over time. This is something that we found time and again. We did this on a national basis in cooperation with the U.S. Department of Energy. They did an analysis of what it would cost and whether it is feasible for wind to provide 20% of the nation’s electricity within a 2030 time frame. It showed that not only was it cost-competitive with other generation sources like gas or coal and nuclear, but because of the fuel cost savings, it was a net economic benefit. I think what we found on a national basis is going to be true in a state like Wisconsin as well.

Shepherd: What sorts of jobs would be developed in the wind sector?

Swisher: Well, from a wind perspective there are really three major types of jobs. One is construction, because you have to build the projects. One is operations—people to manage a growing number of new renewable energy power plants. And a third is manufacturing, and this is probably the thing that we’re most excited about. Because the U.S. is now the world’s largest market for wind power, you have virtually every manufacturer in the world wanting to participate in that market. Because this equipment is so large, it doesn’t make economic sense to manufacture it overseas and try to import a wind turbine blade or tower from Europe or Asia. I know Iowa has been a real leader, sort of got out front. They have six or seven factories that have now been established. I know Wisconsin has been very aggressive in recent years in establishing an economic development strategy to really capitalize on this movement toward the new energy economy.

I’ve talked to many, many companies. One of the things I did in 2008 was fly over to Europe and try to recruit additional companies to come to the U.S. and participate in this growing market because if we’re going to accomplish the objectives that we have—such as providing 20% of the nation’s electricity [with wind power]—we’re going to have to grow the size of the wind market about 10 times. And that’s going to require a lot of turbines and a lot of other important parts. There are about 8,000 components in a typical utility-scale wind turbine. So that’s a lot of manufacturing opportunity.

Shepherd: Some manufacturers in other sectors—for example, the paper industry—are concerned about the costs of using more locally produced renewable energy. Are these concerns real?

Swisher: Well, the only reason the costs would go up would be if the cost of electricity were to increase dramatically because of the movement toward renewables. And the analysis that the Public Service Commission and other entities have done say that there’s no basis for that expressed fear. The fact is, moving to 25% renewable would not have a detrimental impact on Wisconsin’s manufacturers.

Shepherd: Southeastern Wisconsin has a newly expanded coal-fired power plant that cost more than $2 billion. Why should the state now embrace renewables if we made such a heavy investment in coal?

Swisher: One of the things that’s really good about renewable energy from an economic standpoint is they are modular in nature and so you don't have to have a thousand megawatts of wind in one swoop, one major construction project, one enormous capital cost. You can add them in increments over time that more closely match the growth and demand for electricity. One of the problems with a very large power plant is not just the cost, but absorbing all of that new electric generating capacity on the system is just hard to have to track the growth and demand over time.

Shepherd: If you could speak to our state legislators about renewable energy, what would you tell them?

Swisher: I would say seize the opportunity that the new energy economy presents for the state. There’s no question that this sector will continue growing dramatically for decades. That means lots of manufacturing jobs that really have a natural home in Wisconsin, given your history as a manufacturing state. So it’s a perfect kind of transition for a lot of those jobs that have been lost.