MCEC Feasibility Study
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Economic Development Potential of Clean Energy Technology in Maryland and Feasibility Study for a Maryland Clean Energy Center Prepared for Baltimore Development Corporation With Funding By: Maryland Department of Business and Economic Development Maryland Energy Administration Abell Foundation By: John W. Spears and Andre W. Van Rest International Center for Sustainable Development 111 South Calvert St. Suite 2201 Baltimore, MD 21202 December 31, 2006 Page 1 of 283 Page 2 of 283 Table of Contents Acknowledgments ......................................................................................................................... 4 Executive Summary...................................................................................................................... 5 Summary of Feasisibility Study Results ..................................................................................... 7 1. Scope of the Study................................................................................................................... 31 2. Energy Use in Maryland ........................................................................................................ 33 3. Clean Energy Technologies.................................................................................................... 57 4. Clean Energy Policy…………...……………………………………………………..……..114 5. Economic Development Potential of a Maryland Clean Energy Center ......................... 135 6. Maryland Clean Energy Center- Buisness Plan ................................................................ 167 7. Conclusions............................................................................................................................ 183 Appendix 1 Energy Data .......................................................................................................... 189 Appendix 2 National Renewable Energy Laboratory Report .............................................. 203 Appendix 3 University of Baltimore Report........................................................................... 223 Appendix 4 Towson University Study..................................................................................... 243 Appendix 5 MCEC/ ICSD/ ETC MOU................................................................................... 273 Appendix 6 Documents Reviewed ........................................................................................... 277 Appendix 7 Summary of Recent Reports on Potential Technical, Economic and Achievable Energy Savings.......................................................................................................................... 281 Page 3 of 283 Acknowledgments This study was written by John W. Spears and Andre Van Rest of the International Center for Sustainable Development (ICSD) under contract to The Baltimore Development Corporation. Funding was provided by the Maryland Department of Business and Economic Development, Aris Melissaratos, Secretary, Maryland Energy Administration, Frederick Davis, Director, and the Abell Foundation, Robert Embry, President. The project was administered and managed by the Baltimore Development Corporation. Additional economic and job potential research and analysis were done by RESI Research and Consulting of Towson University and the University of Baltimore Merrick School Of Business. The National Renewable Energy Laboratory conducted a renewable energy resource and cost assessment for Maryland and Peter Lowenthal of the Solar Energy Industries Foundation provided input to the policy section. The project team consisted of Kathy Magruder, DBED, Larisa Salamacha, BDC, Michael Li, MEA, Beth Harber, Abell Foundation, John Fini and Niel Davis with the Emerging Technology Center, John Spears and Andre Van Rest with ICSD. The International Center for Sustainable Development is a non-profit 501c3 organization located at 111 South Calvert St., Suite 2201, Baltimore, MD. ICSD was established in 2001 with funding from the Abell Foundation and the US Department of Energy. ICSD’s mission is to promote sustainable development world wide by undertaking practical development projects around the world that are based on sustainability principles, meet local needs, and are community focused, environment-friendly, financially-healthy, and replicable. Page 4 of 283 Executive Summary The International Center for Sustainable Development was contracted by the Baltimore Development Corporation (BDC) with funding provided by DBED, MEA and the Abell Foundation to conduct a study of the economic development potential of clean energy technology in Maryland and the creation of a Maryland Clean Energy Center (MCEC) to act as a focal point for development in the clean energy technology sector. The purpose of the MCEC is to promote economic development and jobs in the clean energy industry sector in Maryland. The study examined the past and future energy use profile in Maryland, the renewable and energy efficiency resource potential, domestic and international clean energy policies, and the economic impacts of energy efficiency improvements and developing the State’s renewable energy resources. In summary, we found that: • The Clean Energy industry is a $50 billion a year industry world wide, growing at a rate of 30% per year and one of the hottest investment opportunities on Wall Street today. • A growing number of States are investing aggressively in the Clean Energy industry (over $500 million per year). Maryland, however, is lagging in this sector and is missing out on huge economic development and job growth potentials that the other States are realizing. • Maryland has vast untapped renewable energy resources that could produce from 30% to 137% of all the State’s electricity from solar photovoltaics and on-shore and off-shore wind power at costs often competitive with conventional sources. • Energy efficiency can significantly reduce energy costs to homeowners, businesses, institutions and government at a cost 60% to 70% cheaper than new generating capacity in Maryland. • Ethanol can be produced in Maryland at a price competitive with today’s gasoline prices. • Given Maryland’s excellent research laboratories and expertise in biotechnology, it is in an excellent position to become a leader in biofuels research and development. • However, Maryland seems to be moving in the opposite direction by cutting the already slim funding for the Maryland Energy Administration by over 67% in the past two years. ($3.96 million in 2004 to $1.29 million in 2006) • Over the next 20 years, at the lowest level of effort (20% energy-efficiency improvement, 10% renewable-energy increase, and 10% ethanol production increase), 144,000 jobs will be created (67,000 in Baltimore), wages & salaries will go up by $5.7 billion ($2.4 billion in Baltimore); state & local tax revenues will increase by $973 million ($412 million in Baltimore); and gross state product (GSP) will increase by $16 billion ($7 billion in Baltimore). • At the highest level of effort (40% energy-efficiency improvement, 30% renewable-energy increase, and 30% ethanol production increase), the economic impacts more than double. Given this tremendous potential, the report, therefore, lays out a plan for Maryland to become a national leader in the clean energy industry sector and realize the tremendous economic, social and environmental benefits of clean energy. The proposed plan creates a Maryland Clean Energy Center (MCEC) that can act as a focal point for clean energy industry development in Maryland. MCEC will lead a collaborative effort of all of Maryland’s existing resources to advocate and promote the clean energy industry in the State and drive development of the State’s abundant energy efficiency and renewable energy resources. MCEC will also help identify funding sources Page 5 of 283 to meet the State’s needs and tie together all the State institutions- industry, universities, research and State agencies- around a common goal. The MCEC’s mission is to promote the growth of the clean energy industry in Maryland. With most industries, the majority of the economic benefits come from the investment in the companies and the jobs they create. While corporate investment and job creation are also important benefits of the clean energy industry, we found in our study that the vast majority of the economic benefits come from the services the industry provides in Maryland (energy savings and reduction of energy imports). Therefore, in order for us to reap the maximum benefit, Maryland needs to develop a strong clean energy industry and infrastructure that can effectively deliver energy efficiency and renewable energy goods and services that maximize the energy efficiency and renewable energy utilization in the State. This means we need to not only build a strong industry in Maryland, but also build a strong market for energy efficiency and renewable energy goods and services. Energy efficiency and renewable energy are great investments for Maryland. According to our analysis, an investment of $1 million per year by the State in the MCEC over the next 20 years ($20 million) would return $973 million in State and local tax revenues and 144,000 new jobs in the low scenario, and $2,166 million and 327,000 new jobs in the high scenario. If Maryland imposed a very small public benefit tax on consumer’s utility bills ($0.0004 cents per kilowatt- hour or less than $0.50 per household per month), as 14 states currently do, and raised $25 million per year (average of the 14