A New Energy Economy

A BLUEPRINT FOR A New Energy Economy Report authored by Todd Hartman Photo, Above Mike Stewart looks over an array of solar panels at the Greater Sandhill Solar Project being constructed by SunPower Corporation outside of Alamosa. Photography by Matt McClain unless otherwise indicated Design by Communication Infrastructure Group, LLC No taxpayer dollars were used in the production of this report. On the Cover The light of the setting sun reflects off solar panels at SunEdison’s 8.2-megawatt solar photovoltaic plant outside of Alamosa. A LETTER FROM GOVERNOR RITTER A Letter From Governor Ritter Dear Reader, In four years as Governor of Colorado, I have made it a top priority to position Colorado as an economic and energy leader by creating sustainable jobs for our residents, encouraging economic growth for our businesses, and fostering new innovations and new technologies from our public, non-profit and private institutions. We call it the New Energy Economy, and it is built on the recognition that the world is changing the way it produces and consumes energy. By harnessing the creative forces of advancing the diversified energy resources In Colorado, we’ve elected to join that race, world, and give them the knowledge that we entrepreneurs, researchers, educators, that we turn to today, and will increasingly and together, we believe America can win worked with their futures in mind in hopes foundations, business leaders and policy do so in the future: solar, wind, geothermal, it. Colorado is proof positive that we can that they will do the same. makers, we have in Colorado created biomass, small hydro, Smart Grid and other create new opportunities for new forms of Sincerely, an ecosystem that is supporting private elements of the emerging new energy world. clean energy that will ease our dependence economic activity, creating new jobs and on foreign energy, conserve finite fossil fuels, putting our state at the forefront of a fast- In the pages that follow, we are sharing protect our environment and allow us to changing world. In Colorado, we intend to Colorado’s New Energy Economy story compete in the global fields of new energy help America remain a global economic in hopes that it can serve as a blueprint manufacturing, research and business. Bill Ritter, Jr. power by leading – not following – in the for states, local governments and others We hope you find Colorado’s story Colorado Governor race to a new energy future. interested in preparing for, and engaging with, a world where China, Europe, Asia and instructive, and employ its lessons to January 2007 to January 2011 While our state remains a strong – and proud other fast-rising economies are speeding advance the New Energy Economy in other – producer of traditional energy resources, ahead while America risks falling behind. regions. By taking these steps, we can deliver we have also become a national center for to our children and grandchildren a better Table of Contents INTRODUCTION The New Energy Economy .................................................................................................. 2 CHAPTER ONE Setting The Stage . ........................................................................................................ 4 CHAPTER TWO Campaigning on the New Energy Economy .................................................................................... 8 CHAPTER THREE First Steps are Giant Steps ................................................................................................. 12 CHAPTER FOUR Sustaining Momentum . .................................................................................................. 18 CHAPTER FIVE Economic Impact . ....................................................................................................... 22 CHAPTER SIX Market Transformation . .................................................................................................. 30 CHAPTER SEVEN Conclusion . ............................................................................................................ 34 Photo, Left Gov. Ritter, center, tours Confluence Energy in Kremmling with owner Mark Mathis, left. Confluence Energy’s wood pellet plant is the largest of its kind west of the Mississippi River. The company is a leading recycler of beetle kill trees. 1 INTRODUCTION – THE NEW ENERGY ECONOMY Introduction The state of Colorado, under the leadership of Governor Bill Ritter Jr., has in • The focused work of non-profits and energy. This is offered as important history, foundations helping educate Americans but more significantly as a blueprint for recent years led the country in the creation and expansion of a “New Energy about the imperative for a new states and local governments interested in Economy.” This successful economic transformation, recognized in Washington energy course replicating this effort to the extent possible D.C. and in many countries around the world, has evolved through a series in other regions. Colorado’s success with the • The desire to ensure America remains New Energy Economy shows that forward- of policy, legislative and economic development actions that recognize a 21st economically competitive globally looking policies that take into account century shift in the way the world will produce and consume energy. by understanding the shift in jobs, global economic and environmental trends manufacturing and technology will lead to opportunities to expand local tied to a new energy movement economies, build energy security, protect The commitment to developing a New The basis for building a New Energy the climate, clean the air and reduce Energy Economy has transformed Colorado Economy rests on a convergence of factors. This document tells the story of Colorado’s dependence on finite fossil energy. into an important national and international New Energy Economy, its origins, its hub for renewable energy companies and Those include: development under Governor Ritter’s entrepreneurs, clean-energy research and leadership from January 2007 to January • Forecasts of rising energy prices production, and has fostered growth in 2011, and key elements that ensure long- companies that focus on energy efficiency. • Growing concern over the impacts term market transformation built around The New Energy Economy grew in Colorado of climate change tied to fossil homegrown jobs, protection of the state’s even in a period of severe national recession. fuel combustion postcard beauty and clean, inexhaustible Manufacturers were building factories and Gov. Ritter pumps insulation into a home in hiring employees on the Front Range of • The increasingly mainstream interest Colorado Springs. Weatherization of existing the Rocky Mountains, even at the height in protecting the environment and structures is a key aspect of building Colorado’s of the economic downturn. These projects conserving natural resources New Energy Economy. Photo courtesy Energy produced, at least in part, an antidote to • A growing emphasis on Resource Center. the swirl of difficult economic news that energy independence dominated the last years of the decade. 3 CHAPTER ONE – SETTING THE STAGE Setting the Stage Various political, technological, regulatory and market forces began to align Key developments included the creation of the Colorado Legislature in 2002 and 2003 Xcel Energy’s Windsource program, which without success. By 2004, however, the in important ways in the late 1990s and early 2000s, planting the seeds for gave customers the option to pay slightly effort had gained significant momentum Colorado’s blooming New Energy Economy. Advances in wind energy technology higher electricity rates to purchase power and supporters - including a fledgling and production were nudging the price of wind-turbine power into a competitive from renewable sources. Response to the renewable energy industry, economic program was enthusiastic, and Xcel Energy development groups, the ski industry position with some fossil fuels. At the same time, a public increasingly concerned saw demand exceed supply as Windsource and major environmental organizations. about carbon emissions, climate stability and pollutants associated with coal- became one of the country’s leading green Importantly, advocates emerged in the energy programs. In this same period, Republican Party as well. These were chiefly fired power plants were pressuring utilities to deploy more renewable energy. the Colorado Public Utilities Commission rural conservatives who saw how farmers Utilities, including Xcel Energy – Colorado’s largest electricity provider – were determined that wind was a so-called “least- and ranchers could benefit from the leases also concerned about the potential for deregulation that appeared to threaten cost” resource and required Xcel Energy needed to erect wind turbines on the to acquire wind to meet its generation Eastern Plains. their future viability. demands. This led Xcel Energy to purchase electricity from a 162-megawatt wind farm Frustration with the legislature’s failure to near Lamar, a town along the Arkansas approve an RPS led to a ballot initiative in River in southeastern Colorado. the fall of 2004. That initiative, known as Amendment 37, would require Xcel Energy These events encouraged environmental and other utilities to acquire 10 percent of activists and led to a series of efforts to their electricity from renewable sources, develop a “renewable portfolio standard,” including solar and wind, by 2015. Notably, or RPS, designed to require utilities to the initiative

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