Institute experts help clients develop profitable, sustainable solutions
Energy consumption and its environmental impact are fundamental drivers of economic development.
Experts at the Kenan Institute work with public- and private-sector clients to analyze the opportunities and challenges the energy economy provides and develop profitable, sustainable responses to them.
“There is an enormous focus on green energy development in North Carolina, across the nation and around the world,” says Thomas A. Stith III, the Kenan Institute’s program director for economic development.
“But a lot of work must be done to ensure the policy and practices that government and business leaders choose will promote, not undermine, the growth of the green economy,” Stith says. “Our job is to make sure they have the latest and best information and analysis so they can make those strategic choices for moving forward.”
The institute’s current energy and environment work focuses on three key areas:
- Developing renewable energy solutions.
- Analyzing energy costs and investments.
- Promoting energy-related business growth.
Developing Renewable Energy Solutions
Stith and his energy and environment team have worked on three projects for the state-funded Biofuels Center of North Carolina, providing both strategic and tactical help as the center works to meet the state’s energy goals and develop a renewable energy industry.
North Carolina’s Strategic Plan for Biofuels Leadership set a goal of producing 10 percent of the state’s liquid fuel consumption by 2017. That requires participation by a range of market players, from farmers and foresters who produce feedstocks to policymakers who create the regulatory and incentive structure to companies that convert N.C. feedstocks into biofuels and distribute them to consumers.
The first project, Business of Biofuels, developed the complex financial models the Biofuels Center uses to evaluate which feedstocks hold the greatest potential for profitable, sustainable production. The institute also conducted an economic impact analysis that revealed more than 3,000 jobs and nearly $1 billion of economic impact would result if the state achieves its 10 percent goal.
With the financial models in place, the Biofuels Center has again reached out to the institute for help examining the global and local market conditions that will affect the state’s ability to achieve its energy goals.
In one study, N.C.’s Role in the Global Biomass Energy Market, researchers are analyzing the global markets that could compete for the state’s woody biomass supply and a range of related issues, from demand and pricing to public policy to export capabilities.
In a second project, The Economic Impact of Biomass Alternatives on N.C.’s Economy, researchers are analyzing and comparing the economic impacts of producing biomass for export, for electric power generation and for liquid fuel consumption.
Analyzing Energy Costs and Investments
The cost of energy plays a significant role in shaping competitive strategy for both companies and communities. High energy costs can erode profits for companies and force communities to raise taxes, both of which diminish economic competitiveness.
Institute teams are working on two projects that examine the cost and impact of energy investments.
In its recent Price of Power study, institute experts revealed that many residents in eastern North Carolina pay significantly higher rates for electricity than the rest of the state and nation. Stith’s report to the N.C. General Assembly documented the economic impact of these higher costs and potential solutions for overcoming this obstacle to economic growth.
“Our analysis of 32 cities in eastern North Carolina shows an aggregate cost for electricity that is $240 million higher than the state average,” Stith says. “These higher costs make it harder to attract economic development to the area and shift the burden of payment to residential customers. We want to find out what is driving this disparity and create solutions for it.”
Researchers, with support from Ygrene Energy Fund, also are assessing the risk and financial viability of using Property Assessed Clean Energy (PACE) bonds to promote energy efficiency and growth of the green economy.
Twenty-four states and the District of Columbia have passed laws since 2008 enabling local governments to establish districts that allow residential and commercial property owners to finance renewable energy and energy efficiency improvements on their properties.
The institute team is examining both the risk associated with this financial instrument and the potential pricing and rating investors can expect.
Promoting Energy-related Business Growth
The institute has developed an extensive network of public, private and nonprofit partners through its work in the energy and environment space.
Stith and his team are using those connections to link energy-related businesses with organizations that can help them grow. This includes communities seeking renewable solutions to meet their energy needs as well as service providers and support organizations.
For more information on the institute’s energy and environment work, contact:
Thomas A. Stith III
Program Director, Economic Development
Frank Hawkins Kenan Institute of Private Enterprise
Campus Box 3440, Kenan Center
Chapel Hill, NC 27599-3440