POWERING A Vision for Growth and Innovative Energy Investment

IN PARTNERSHIP WITH

WWW.POWERINGOHIO.ORG Authors Asa S. Hopkins, PhD Principal Associate, Synapse Energy Economics Thomas Vitolo, PhD Senior Associate, Synapse Energy Economics Spencer Fields Associate, Synapse Energy Economics

Synapse Energy Economics is a research and consulting firm specializing in energy, economic, and environmental topics. Since its inception in 1996, Synapse has grown to become a leader in providing rigorous analysis of the electric power and natural gas sectors for public interest and Synapse Energy Economics governmental clients. 485 Ave, Suite 2 Cambridge, MA 02139 617-661-3248 http://www.synapse-energy.com

Founded in 2008, the Energy Institute (GLEI) is an interdisciplinary research institute dedicated to catalyzing breakthroughs in energy sustainability that address the most pressing problems facing our world. Located in , Ohio and housed within the Case School Great Lakes Energy Institute of Engineering, we empower our faculty, 10900 Euclid Avenue students and partners to expand knowledge, Olin 305 deepen understanding, and create innovative Cleveland, OH 44106 and sustainable energy solutions. http://energy.case.edu

COVER PHOTOS

LEFT: Jeremy Chenoweth and Benjamin Werkowski of EDP Renewables work atop one of the 52 windmills the company operates in Paulding County. Source: AP TOP MIDDLE: Solar PV Manufacturing Associate in Perrysburg. Source: First Solar BOTTOM MIDDLE: An autoworker assembles a transmission at the Transmission Plant in Toledo. Source: AP RIGHT: Greg Alexander of Dovetail Solar and Wind installs solar panels in Westerville. Source: AP Acknowledgments We recognize the group of leading organizations and individuals that support a prosperous, modern Ohio energy economy and contributed to the vision in this report.

EDP Renewables Advisory Council Seth Kaplan – Senior Manager, Regional Government A­airs Case Western Reserve University Whirlpool Grant Goodrich – Director, Great Lakes Energy Institute Sotiria Anagnostou – Sustainability Analyst JPMorgan Chase & Co. City of Cleveland Marisa Buchanan – Executive Director, Sustainable Finance Anand Natarajan – Energy Manager Mackenzie Hu­man – Vice President, Sustainable Finance BlueGreen Alliance Owens Corning Hillary Bright – State Policy Director Frank O’Brien-Bernini – Vice President and Chief Sustainability O‡cer Lee Geisse – Ohio Regional Program Manager Katie Walloch – Director of Organizing Steve Chriss – Director, Energy and Strategy Analysis Ceres Drew Sadler – Director, Global Public Policy Alli Gold Roberts – Senior Manager, State Policy Eaton Clean Fuels Ohio Christopher Hess – Director, Public A­airs Sam Spo­orth – Executive Director Procter & Gamble Schlegel & Associates Mark Ragase – Purchasing Group Manager Energy Ellen Zuckerman – Senior Consultant

Ohio Manufacturers Association Participating Individuals Ryan Augsburger – Public Policy Services Gary Garfield – Former CEO of Bridgestone Americas John Seryak – President and Lead Engineer, Go Sustainable Energy Alan Hsu – Managing Director, Global Industry Analyst, WMC Cheryl Roberto – Partner, Utility Transformation & Regulation, 21st Century Utilities GEM Energy Bob Taylor – Recently retired Managing Partner from Advent International William Alexander – President

Synapse also wishes to thank the individuals we interviewed at Workhorse Group, Stirling Ultracold, LEEDCo, Smart Columbus, Advanced Energy Economy, Ohio Innovation Fund, Ohio Environmental Council, Ohio and Aviation Council, WIRE Net, First Solar, and AEP Ohio.

Support for this report was provided by Environmental Defense Fund.

TABLE OF CONTENTS

Foreword 1

1. Introduction and Executive Summary 2

2. Ohio’s Energy Economy 8

3. Attract Investment from World-Leading Companies 12

4. Lead the Transportation Transformation 16

5. Build and Deploy Clean Electricity 20

6. Lower Costs and Boost Business with Efficiency 24

7. Harness a 21st Century Electric System 28

8. How Do We Make This Vision a Reality? 32

Endnotes 33 FOREWORD

Foreword

The U.S. energy industry is undergoing a Currently, we are developing an on-site solar transition toward clean energy that has the photovoltaic installation at our Polaris Corporate potential to unlock new investment, create Center in Columbus, one of the largest single- jobs, attract business and advance economic tenant o£ce sites in the world. Comprising growth. As a global financial institution operating up to 20 megawatts of capacity – enough to in more than 60 countries, JPMorgan Chase & power the equivalent of 3,280 homes – it Co. has seen firsthand an increase in investments will allow us to lock-in long-term energy cost that large corporations, small businesses and savings and increase the resilience of our energy governments are making in sustainability. supply in Ohio. Individual states have a unique opportunity to This e¥ort will contribute to our goal to source encourage, and benefit from, this evolution. renewable energy for 100 percent of our For this report, Synapse Energy Economics global power needs by 2020. In 2017, we also came together with the Great Lakes Energy committed to facilitate $200 billion in clean Institute at Case Western Reserve University financing through 2025 – which includes and leading businesses and organizations lending, underwriting and advisory services for to explore how commitments to clean companies and projects that facilitate renewable energy, advanced manufacturing, and smart energy as well as clean water, transport and technologies can create economic benefits for technologies. Together, these two commitments Ohio’s communities and businesses. This report reflect JPMorgan Chase’s objective to leverage also illustrates the continued role of energy our financial resources and expertise to support e£ciency in enhancing business productivity and our clients and customers, and advance more saving money for Ohio families. The state’s skilled sustainable development in our communities, workforce, manufacturing base, clean energy including those in Ohio. resources and business-friendly environment This report provides concrete examples of provide a strong foundation from which Ohio how many leading companies, operating in can play a critical role in the energy transition Ohio, are making investments in clean energy within the state and across the nation. and developing new strategies to support the JPMorgan Chase is committed to driving transition to a lower-carbon economy. We invite inclusive economic growth in communities you to read more and join us in the conversation where our employees, customers and clients live about how Ohio can leverage the opportunities and work, and sustainability and clean energy are from the energy transition to grow its economy. an important part of that. We have a long history in Ohio, proudly having served Columbus for 150 MATTHEW ARNOLD years. The state is also home to more than 21,000 Global Head of Sustainable Finance of our employees, 4 million individual customers JPMorgan Chase & Co. and nearly 250,000 business customers.

1 Powering Ohio INTRODUCTION & EXECUTIVE SUMMARY

Foreword Introduction and Executive Summary

hio can attract billions in investment and create jobs across rapidly converging clean energy industries: tens of thousands of good jobs by embracing clean transforming transportation, renewable energy generation, Oenergy, while building on Ohio’s traditional and energy e£ciency, and building and using the electric grid emerging strengths. Decisions made in the coming years of the future. Please join us! by political, business, and investment leaders will determine whether Ohio captures economic growth by developing a modernized energy economy, or risks losing valuable busi- Ohio can ness to domestic and international competition. Fortunately, Ohio builds from a strong foundation: The state BUILD from its strong foundation. is a manufacturing powerhouse, a center for innovation, Ohio has all of the components necessary for major growth and home to a skilled workforce. It also has enough wind, and economic opportunity. solar, and e£ciency potential to power the state multiple times over. Ohio has the right ingredients to attract capital, ᭤ OHIO IS A MANUFACTURING POWERHOUSE. Ohio’s projects, and jobs. 15,500 manufacturers produce $106 billion of Because the stakes are high, a group of leaders is coming annual industrial output and employ more than together to develop a pro-growth vision for what Ohio 685,000 Ohioans, placing the state third nationally can achieve through energy innovation. The non-partisan in manufacturing employment. vision in this report draws on the insights and experiences ᭤ OHIO INNOVATES. Ohio is home to dozens of corporate of representatives from some of Ohio’s largest private and federal research-and-development centers, and it employers, growing small companies, experienced state has ranked tenth in the country in patents since 2010. policymakers, city o£cials, labor voices, universities, and research and development institutions. We share a collab- ᭤ OHIO HAS A SKILLED WORKFORCE. The state graduates orative approach and a commitment to help Ohio move more than 20,000 science, technology, engineer- forward into a prosperous energy future. Many of us are ing, and math students each year and is home to 34 already investing in this future. accredited engineering programs. More than 150 apprenticeship programs train Ohioans to be machin- We invite you to share your feedback on Ohio’s biggest ists, and the state supports over 11,000 registered energy growth opportunities by joining the conversation at apprentices in construction. www.poweringohio.org. Your thoughts will contribute to a summer 2018 report that lays out a roadmap to the highest ᭤ OHIO SUPPORTS BUSINESS OPPORTUNITY. Ohio o¥ers priority collaborative actions that Ohio business, govern- a low cost of doing business, programs that support ment, labor, and civil society leaders can take through entrepreneurship, and a history of e¥ective partner- 2020. We will explore a set of pragmatic steps Ohio can ship between business and political leaders. implement to capture economic opportunity and create

A Vision for Growth and Innovative Energy Investment 2 INTRODUCTION & EXECUTIVE SUMMARY

Ohio competes on regional, national, and global stages for The auto industry in Ohio faces both great risk and great investment. To avoid being left behind, Ohio must embrace opportunity from this transformation. Ohio could be left a shared vision for clean energy success and take the actions behind as demand for internal combustion vehicles falls, necessary to make that vision a reality. or Ohio could embrace electric drive manufacturing and extend its automotive leadership. ATTRACT INVESTMENT from Ohio’s expertise in materials and engines has benefitted the world-leading companies. state by allowing Ohio’s industry to lead e¥orts to make vehicles more e£cient. The state will need to embrace Ohio can attract additional investment if companies are further change to leverage its current leadership in the able to meet their business and clean energy objectives and smart transportation into lead- here. Nearly half of the Fortune 500 companies—and 71 of ership in a connected and electrified future. the Fortune 100 companies—have set targets to increase Our analysis shows that the di¥erence between continu- their clean energy use or reduce greenhouse gas emissions ing the status quo and embracing new options is striking: from their operations. Ohio houses facilities for 61 percent by 2030, more than $6 billion in capital investment, over of these committed Fortune 500 firms, and 73 percent of $900 million per year of manufacturing value added, more those in the Fortune 100. This includes 39 companies that than 9,000 middle-income jobs in the industry, and 18,000 are either headquartered in Ohio or among the state’s 100 additional jobs throughout the rest of the economy. These largest employers. additional jobs result from increased supply chain purchas- Some firms meet their commitments through remote ing and from wages and profits re-spent in the economy. transactional agreements with wind in or Oklahoma, but many would rather meet those needs LEADERS INCLUDE: locally. If a company can pair an in-state renewable energy ᭤ Smart Columbus, which has leveraged $50 million in grants to investment with its local facility, it increases energy cost rally $500 million from the private sector to enable an auto-auto- certainty. Fixed price electricity contracts, only possible mated, connected, shared, and electric transportation system. with renewable generators, reduce energy price risk for ᭤ GM and Ford, which will o¥er dozens of electric vehicle options data centers and other large electricity consumers. The within the next half decade. renewably powered data center investment opportunity ᭤ Workhorse Group, which is building electric commercial fleet vehi- alone is worth at least $6.2 billion over the next 10 years. cles and growing shipments at more than 200 percent per year. As leading businesses push their supply chains to become more sustainable, Ohio can support local firms’ pursuit of the resources they need to compete. BUILD AND DEPLOY clean electricity. LEADING OHIO COMPANIES INCLUDE: ᭤ General Motors, Owens Corning, and Procter & Gamble, We recognize that natural gas is likely to play a continued which are using both in-state and out-of-state solar and wind important role in Ohio energy supply for years. While the Ohio to power their Ohio facilities. natural gas industry has grown rapidly and o¥ers economic ᭤ , which has reduced energy consumption almost 35 benefits, the state can also look to capture renewable elec- percent, saving more than $50 million. tricity generation benefits that all corners of the state can share if state policies allow this market to thrive. Wind and solar generation deployment draws on local supply chains LEAD a transportation for everything from steel to fiberglass to power-electron- transformation. ics. Meanwhile, these facilities will also provide new income streams for rural Ohioans who host, install, and maintain them. Vehicles are evolving. New models are lighter and more e£- cient, and the industry is transforming to build a connected, Our analysis shows that over the next decade steady growth automated, and electrified future. Morgan Stanley projects to 5.2 gigawatts (GW) of onshore wind and solar—only a that global sales of internal combustion will peak within few percent of the state’s resource potential—would attract the next five years, while Bloomberg New Energy Finance over $7.8 billion in investment to Ohio, create over 5,500 projects U.S. EV sales will grow 30 percent per year for the jobs, and boost annual GDP by over $2 billion. Ohio can also next decade and beyond. take the lead in the nascent industry of o¥shore wind in the Great Lakes, which alone presents an additional $7.4 billion opportunity to develop 1.5 GW between now and 2030.

3 Powering Ohio INTRODUCTION & EXECUTIVE SUMMARY

Innovators build companies where they have access to ACTION IN OHIO INCLUDES: infrastructure, can draw upon existing networks, and get ᭤ 604 MW of wind and 171 MW of solar PV have been built. rapid feedback from local markets. A modernized grid will Another 900 MW of wind and 275 MW of solar are permitted, although additional wind permitting is e¥ectively stalled due signal industrial and building-system innovators to come to to statewide siting restrictions. Ohio, and to develop and deploy their 21st century solu- tions for export around the world. And last but not least, a ᭤ First Solar recently completed a retooling of its existing manu- facturing facility and announced plans for an additional facility. smarter electric grid will provide increased reliability and By late 2019, First Solar will be capable of manufacturing 1.8 resiliency for Ohio customers. GW of solar modules annually at its Perrysburg facilities. OHIO INNOVATORS INCLUDE: LOWER COSTS and boost ᭤ Case Western Reserve University, NASA Glenn Research Center, the , Eaton, Siemens, and Johnson business with efficiency. Controls, which are collaborating to develop new tools for building, grid, and renewable energy integration. Every dollar that Ohio families and businesses spend on ᭤ Duke Energy, AEP Ohio, and many of Ohio’s municipal and wasted energy is a dollar they cannot spend on local prod- cooperative utilities, which have deployed advanced meters ucts, services, or investments for the future. Ohio can keep to 20 percent of Ohioans and plan to double that number in its factories on the cutting edge of productivity by support- the next few years. ing upgrades to increase e£ciency. This will drive down costs and help Ohio’s plants compete. By investing $6.6 billion to increase energy e£ciency in factories and buildings through How do we make expanded e£ciency programs, Ohio can save hundreds of millions of dollars per year on energy, increase annual GDP this vision a reality? by $500 million by 2030, and support 5,000 local installa- tion, manufacturing, sales, and other jobs. Capturing all of the opportunities identified in this report would provide benefits beyond the sum of their individual Energy consumers around the world are also demanding contributions to transform the energy economy of Ohio. more e£cient products as well as systems to improve prod- Getting the most out of each transformation – whether uct e£ciency. Ohio’s manufacturers can meet this need it is smart and electric transportation, manufacturing and with increased exports of e£cient technologies. Ohio’s building clean electricity generation, increasing energy innovators continue to develop and manufacture more productivity, or operating a smart grid that connects it all e£cient lighting and appliances, design and implement together – will depend on complementary actions in other new control systems to increase building and industrial sectors. Ohio becomes more attractive for investment and performance, and produce materials and products—such for workers with each forward step. as high-performance insulation—that are incorporated into more e£cient buildings and processes. We believe that coherent and coordinated action will be required across multiple fronts to implement this vision. LEADING OHIO COMPANIES INCLUDE: We have identified workforce, regulation and policy, and investment innovation as key drivers and enablers. These ᭤ Walmart, which worked with Current by GE to install more actions are not solely the responsibility of government: than 1.5 million LED lights, saving more than $100 million in energy costs. leading businesses, investors, educational institutions, labor, and advocates must each also do their part. ᭤ Whirlpool and Stirling Ultracold, large and small manufacturers both pushing the limits of appliance e£ciency. If Ohio cultivates an innovative workforce, develops smart technologies, and provides energy policy certainty, it can HARNESS a 21st century turn these synergistic opportunities into broadly shared and sustained economic success. electric system. We look forward to engaging with Ohioans with diverse Sensors and controls are revolutionizing manufacturing, perspectives. Please visit the report’s website at www. building operation, and the electric grid by providing visibility poweringohio.org to join the conversation. and new flexibility to improve performance. Ohio is home to early leaders in this rapidly developing area, and it can further attract and empower innovators if manufacturers, utilities, and regulators establish fertile ground for growth.

A Vision for Growth and Innovative Energy Investment 4 HEADER

R T G R I M A I D CORPORATE LEADERSHIP I S TRANSPORTATION I I Support dozens of leading Ohio companies Expand automotive leadership and attract new businesses. into an electrified future.

HIP RS DE EA L $6+ billion in $6.2 billion in TE TR A A investment R N investment O S P P 1,300 jobs R O O R 9,000+ jobs C From attracting 12 more T A $900+ million annual GDP data centers T I

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R I C I T Invest in energy efficiency to enhance Y Boost supply chains and create local jobs by productivity and save money. developing 5.2 GW of wind and solar. $6.6 billion in $7.8 billion in investment investment

5,000 jobs 5,500+ jobs 5 Powering$500 Ohio million annual GDP $2+ billion annual GDP HEADER

R T G I A R I I CORPORATE LEADERSHIP S M D I TRANSPORTATION I

Support dozens of leading Ohio companies Expand automotive leadership and attract new businesses. into an electrified future.

HIP RS DE EA L $6+ billion in $6.2 billion in TE TR A A investment R N investment O S P P 1,300 jobs R O O R 9,000+ jobs C From attracting 12 more T A $900+ million annual GDP data centers T I

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R I C I T Invest in energy efficiency to enhance Y Boost supply chains and create local jobs by productivity and save money. developing 5.2 GW of wind and solar. $6.6 billion in $7.8 billion in investment investment

5,000 jobs 5,500+ jobs $500 million annual GDP A Vision for Growth$2+ and billion Innovative annual Energy Investment GDP 6 OHIO’S ENERGY ECONOMY

CLOCKWISE: Jeremy Chenoweth and Benjamin Werkowski of EDP Renewables work atop one of the 52 windmills the company operates in Paulding County. Source: AP; Greg Alexander of Dovetail Solar and Wind installs solar panels in Westerville. Source: AP; An autoworker assembles a transmission at the General Motors Transmission Plant in Toledo. Source: AP; Solar PV Manufacturing Associate in Perrysburg. Source: First Solar

7 Powering Ohio OHIO’S ENERGY ECONOMY

Ohio’s Energy Economy

nergy is a critical component of Ohio’s economy: the development of cost-e¥ective alternatives such as It lights, moves, and powers Ohioans’ lives and energy storage. businesses. E This report addresses Ohio’s clean energy opportunities. We Ohioans spend almost $40 billion each year directly on define “clean energy” as vehicle fuel economy and elec- energy—primarily electricity, natural gas, and motor fuel. This trification, renewable energy, energy e£ciency, and grid is equivalent to 6 percent of the state’s GDP, and almost 40 modernization.* Together, these technologies represent percent of Ohio’s $106 billion in industrial output.1 Ohio’s energy future.

Of Ohioans’ direct energy spending, less than half goes to the raw input fuels themselves. The rest goes to the wires, FIGURE 1: Ohio’s electric generation has pipes, generators, gas stations and other infrastructure, shifted as natural gas displaces coal and operations and maintenance of that infrastructure. For

electricity, of the $14.9 billion that Ohio electric utilities 180 and energy suppliers collect from customers, only about 30 percent pays for fuels. As electricity shifts more toward 160 clean sources with no fuel costs, infrastructure costs will 140

become even more dominant. Prudent and cost-e¥ective 120 investment in Ohio’s energy infrastructure requires a clear and consistent long-term vision for the future. 100 80 The state’s energy economy is changing due to reductions in coal production and consumption paired with rapid 60 Electric Generation (TWh) Generation (TWh) Electric growth in natural gas and, to a lesser extent, renewable 40 sources. Natural gas is a significant contributor to Ohio’s 20 energy mix, with development in the Marcellus and Utica shales creating economic activity and helping to displace 0

coal generation. While this report does not define natural 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Coal Gas Oil Nuclear Renewable gas as clean energy or assess its future potential, we note that with the right policies in place—including methane emission reductions—dispatchable natural gas can e¥ec- Source: U.S. Energy Information Administration. tively complement deployment of intermittent renewable energy, fostering clean energy deployment in parallel with

* We are not considering nuclear generation in this report because of our focus on new investment opportunities in the energy sector. No utility or power generator has proposed developing new nuclear generation in Ohio.

A Vision for Growth and Innovative Energy Investment 8 OHIO’S ENERGY ECONOMY

END-USE SECTOR INTERMEDIARIES INFRASTRUCTURE & FUELS TRANSMISSION GRID: 4¢

RESIDENTIAL: 25¢ DISTRIBUTION GRID: 18¢ ELECTRIC UTILITY: 38¢

ELECTRIC IMPORTS: 3¢ PLANT INFRASTRUCTURE: 6¢ COMMERCIAL: 16¢ OHIO POWER PLANTS: 12¢ RENEWABLES: <1¢ NUCLEAR FUEL: <1¢ COAL: 5¢ N.G. UTILITY: 13¢ WOOD: 2¢ INDUSTRIAL: 19¢ NATURAL GAS: 8¢

N.G. INFRASTRUCTURE: 7¢

OIL: 31¢

TRANSPORTATION: 40¢ OIL RETAIL: 42¢

OIL DISTRIBUTION: 15¢

END-USE SECTOR INTERMEDIARIES INFRASTRUCTURE FUELS RESIDENTIAL COMMERCIAL INDUSTRIAL TRANSPORTATION ELECTRIC UTILITY POWER PLANTS NATURAL GAS UTILITY OIL

FIGURE 2: A typical dollar flowing through In examining how Ohio compares to other states on clean Ohio’s $40 billion energy economy energy, there are several metrics to consider:

The width of a line is proportional to its share of total expenditure. For ᭤ The American Council for an Energy-Efficient example, from each dollar of Ohio energy spending, 40 cents are for Economy measures leadership in state policies and transportation, 25 cents for homes, and 35 cents for commercial and industrial businesses. Electric distribution and generation utilities see programs that improve energy e£ciency throughout 38 cents, of which they spend 12 cents on energy from Ohio power the economy; plants. As Ohio’s energy economy shifts toward clean transportation and renewable electricity, oil spending that leaves the state will fall in ᭤ The GridWise Alliance Grid Modernization Index favor of in-state electricity. measures grid modernization policies, customer engagement, and implementation;

᭤ Renewable generator deployment in both wind and solar by state is simply tallied by capacity;

᭤ EV deployment is measured as a percent of sales. Looking across these clean energy metrics, Ohio has room for improvement when compared to nearby competing states in the Midwest and upper South.

9 Powering Ohio OHIO’S ENERGY ECONOMY

TABLE 1: Ohio’s regional standing in various clean energy metrics

Rank ACEEE Efficiency Grid Modernization Wind Solar Electric Vehicle % in the Scorecard Index Capacity Capacity of Sales Region

1 Minnesota Minnesota 2 * Illinois Pennsylvania Pennsylvania 3 Illinois* Michigan Minnesota Indiana Illinois 4 Iowa Indiana Missouri Minnesota 5 Pennsylvania Minnesota Michigan OHIO Michigan 6 Wisconsin OHIO Pennsylvania Tennessee Missouri 7 Indiana Missouri Michigan Tennessee 8 Tennessee West Illinois Indiana 9 OHIO Wisconsin OHIO Iowa OHIO 10 Missouri Tennessee Wisconsin Wisconsin Iowa 11 Indiana Kentucky Tennessee Kentucky Kentucky 12 West Virginia Iowa Kentucky West Virginia West Virginia *Tied

Ohio’s Energy Workforce A 2017 survey of global CEOs by PwC identified three ᭤ Ohio’s 15,500 manufacturers employ more top priorities when pursuing new opportunities: inno- than 685,000 Ohioans, placing the state third vation, human capital, and digital and technology nationally in manufacturing employment.5 More capabilities.2 At the same time, 77 percent of CEOs than one-third of the state’s energy jobs are surveyed see key skill availability as the biggest threat manufacturing jobs. to their business. For Ohio to capitalize on the oppor- ᭤ Ohio’s potential is growing: The state is home to tunities identified in this report, the state will need 34 accredited engineering programs and grad- to draw upon the strengths of its workforce, and to uates more than 20,000 science, technology, continue to make it stronger. engineering, and math students each year – with ᭤ The more than 100,000 clean energy jobs in more than 50 percent growth in STEM graduates Ohio are good jobs that help Ohio’s working over the last decade.6,7 More than 150 apprentice- families thrive. The median annual wage in Ohio’s ship programs train Ohioans to be machinists, and clean energy economy is between $40,000 and the state supports over 11,000 registered appren- $50,000, helping to maintain a strong middle class.3 tices in construction.

᭤ A 2017 survey by the U.S. Department of Energy ᭤ Innovators call Ohio home: Ohio is home to identified almost 350,000 traditional and clean dozens of corporate and federal research and energy jobs in Ohio.4 Almost half are in the auto development centers, and it has ranked tenth in industry, and just under a quarter are in energy e£- the country in patents since 2010.8,9 ciency. Only 12 percent are associated with coal, oil, or natural gas, including mining, extraction, and electric generation.

A Vision for Growth and Innovative Energy Investment 10 ATTRACT INVESTMENT FROM LEADING COMPANIES

Owens Corning uses a 2.4 MW solar array to power its Toledo headquarters

Source: Owens Corning

11 Powering Ohio ATTRACT INVESTMENT FROM LEADING COMPANIES

I I I I I I I I Attract Investment from World-Leading Companies

he world’s largest companies are making the busi- ness decision to pursue clean energy and using their Many of these T operations and purchasing power to demonstrate their commitment. Nearly half of Fortune 500 compa- nies and 71 Fortune 100 companies have set targets to companies already have increase clean energy use or reduce greenhouse gas emis- sions.10 Importantly, many of these companies already have a presence in Ohio. The a presence in Ohio. The state can expand those existing investments and attract new ones by helping companies state can expand those meet their business and clean energy objectives here. Corporate demand for clean energy is a large and grow- ing market: According to the Business Renewables Center, existing investments corporate renewable energy procurement in the United States and passed 3 GW in both 2015 and 2017, and attract new ones by and the total since 2013 exceeds 10 GW.11 Developing these resources drew investment of at least $20 billion. States that want to capitalize on this trend need to assess helping companies meet their regulatory frameworks. For instance, states like Ohio that allow customers to choose their own energy supplier their business and clean are the easiest states for meeting company energy goals, because maintaining choice and access to competi- energy objectives here. tive energy supply is a key tool these companies use to control costs. Ohio can go further. It can help companies reduce energy market risk by reducing siting barriers so that companies can more easily pair stably priced in-state renewable energy investments with their local facilities. Technology companies needing power for data centers have been among the largest buyers of renewable energy. Industrial firms are also making substantial investments. For instance, General Motors will use a 100 MW wind in Ohio to power its plants in Ohio and Indiana as part of its commitment to reach 100 percent renewable energy by 2050. On-site solar is also an attractive option: JPMorgan

A Vision for Growth and Innovative Energy Investment 12 ATTRACT INVESTMENT FROM LEADING COMPANIES

Chase will build up to 20 MW of on-site For retailers, e£ciency improvements solar at its Polaris Corporate Center, help the bottom line. Kroger has reduced These 39 Campbell Company has installed energy consumption almost 35 percent 9.8 MW of solar at its plant in Napoleon, from a 2000 baseline and is on the way and Owens Corning powers its Toledo to a 40 percent target by 2020. Since Fortune headquarters with an on-site 2.4 MW 2000, the company has saved more solar array. than $50 million.14 Walmart worked 500 with Current by GE to install more than Ohio companies have sometimes 1.5 million LED lights and has upgraded invested outside the state to meet their companies more than 5,000 rooftop heating and commitments: Procter & Gamble uses air conditioning units. In total, these These 39 Fortune 500 compa- 75 percent of the output from a wind initiatives have saved Walmart more nies have made specific clean farm in Texas, through a virtual power than $100 million in energy costs.15,16 energy or climate commitments purchase agreement, to match the needs JPMorgan Chase is partnering with and are among Ohio’s 100 largest of its Lima facility. And in 2015, Owens Current, resulting in reduced energy use employers or have their head- Corning signed one of the world’s largest at about 4,500 bank branches.17 quarters here: wind power agreements by an industrial manufacturer. Through this agreement, Companies are also looking to reduce the the company will use wind from Texas impact of their supply chain. As a result, ALLIANCE DATA KROGER and Oklahoma to match 60 percent of clean energy is becoming more import- SYSTEMS its U.S. electricity use. ant for the smaller companies that supply AMAZON these leading businesses. Walmart, for LOWE'S Just as important as renewable energy, ANTHEM example, has launched Project Gigaton MACY'S energy e£ciency helps attract and retain to reduce greenhouse gas emissions AT&T commercial and industrial facilities. As a NATIONWIDE from its suppliers by 1 billion tons by BEST BUY group of companies wrote to the Ohio NORFOLK 2030. Smaller companies can find it di£- legislature in 2017, energy efficiency CROWN HOLDINGS SOUTHERN cult to follow the leadership of the large “helps large commercial and industrial CSX CORPORATION OWENS CORNING companies featured here because they facilities reduce their energy costs so that CVS HEALTH OWENS-ILLINOIS have less purchasing power and econo- they can compete in global markets.”12 mies of scale. By supporting diverse ways FEDEX PNC FINANCIAL Johnson Controls and Schneider Electric SERVICES GROUP to acquire renewable energy supply and FIFTH THIRD have joined a global initiative of compa- enabling energy e£ciency, Ohio can act BANCORP PROCTER & nies pledging to double their energy GAMBLE to reduce those barriers and help all its FIRSTENERGY productivity by 2030.13 SEARS HOLDINGS companies compete. FORD MOTOR SHERWIN- WILLIAMS GENERAL MOTORS FIGURE 3: Ohio presence TARGET GOODYEAR TIRE & U.S. BANCORP of the 243 Fortune 500 RUBBER UPS companies with clean HOME DEPOT VERIZON energy or climate J.C. PENNEY WALGREENS BOOTS commitments J.M. SMUCKER ALLIANCE J.P. MORGAN WALMART CHASE WHIRLPOOL KOHL'S

13 Powering Ohio ATTRACT INVESTMENT FROM LEADING COMPANIES

Amazon Wind Farm Ohio-Timber Road, owned by EDP Renewables Tech Leaders Photo courtesy of EDP Renewables. Demand Clean Energy

Ohio is actively recruiting new data centers, and it can All of Apple’s U.S. facilities, including o ces, retail increase its odds of success by enabling these energy- stores and data centers, are powered by 100 intensive sites to easily meet their energy needs. This percent renewable energy sources like solar, wind includes access to stably-priced renewable energy. Ohio and micro-hydro power, which Apple generates or will capture economic benefit from both the data centers purchases from local projects. The new campus… and the local renewable energy projects that supply them. will also be powered entirely by green energy.19

Ohio is already home to several large data centers, and Access to cost-eective renewable energy is one both Amazon and Facebook have committed to powering of the primary factors used in selecting our data their Ohio centers with renewable energy. The 100 MW center locations. Unfortunately, procuring such Amazon Wind Farm Ohio-Timber Road, owned by EDP energy solutions is not easy in many locations. Renewables, is already operational. Amazon has said that We want to increase the development of renew- its three Ohio data center sites could each support four able energy resources, and those resources more data centers.18 should be accessible to all companies, regard- less of their size.20 If 12 data centers the size of Amazon’s three existing facilities were built over the next decade and coupled Our goal is using more clean energy to power with wind power, it would bring an investment of $450 our datacenters and operations every year, with million per year in data center construction. The projects a goal of topping 60 percent early in the next would also create at least $170 million per year in renew- decade…. Wherever we operate, we work to bring able energy investment. Together, this would drive 350 new clean energy online through investments jobs each year in construction and grow to over 1,000 and partnerships.21 jobs in the combined operations and maintenance of We believe by putting in place thoughtful policy, the data centers and clean energy generators. Spillover businesses can accelerate and expand invest- economic activity spurred by these investments—rang- ments in new renewable projects, which will ing from building materials supply to wages re-spent in diversify the US electrical energy generation mix the local economy—would more than double this positive where they operate.22 employment impact. We’ll continue to pursue these direct [renew- able energy] contracts as we grow, with an even greater focus on regional renewable energy purchases in places where we have data centers and significant operations. … Our ultimate goal is to create a world where everyone — not just Google — has access to clean energy.23

A Vision for Growth and Innovative Energy Investment 14 LEAD THE TRANSPORTATION TRANSFORMATION

15 Powering Ohio LEAD THE TRANSPORTATION TRANSFORMATION

I I I I I I I I Lead the Transportation Transformation

hio manufacturing faces both great risk and great Ohio is heavily invested in the portions of the auto indus- opportunity from continued evolution in the auto try that will change the most with electrification: internal industry. Roadway transportation is moving away combustion engines, transmissions, and other drivetrain O th from the 20 century model of driving petroleum-fueled components. Converting Ohio’s auto manufacturing risk cars and trucks toward an e£cient, connected, automated, to economic opportunity requires the development of an and electrified future. Mitigating the risks and capturing the in-state EV component supply chain. opportunities presented by the transportation transforma- tion is worth nearly $1 billion in annual Ohio GDP. The connected and electrified future will arrive earlier in some places than others, and the leading locations will Get a Foothold entice innovators and the investment to fund their ideas. If Ohio embraces new vehicle platforms and mobility para- With Fleets digms, it can attract the factories and innovators that will produce them, along with their associated supply chains. Commercial fleets can bolster new vehicle tech- nologies. Fleet owners actively seek out new cost A few facts and figures illustrate the pace and scale of savings—savings that accrue quickly thanks to the the transformation: intensive use of fleet vehicles. In addition, fleets ᭤ Morgan Stanley projects that global sales of internal are obvious choices for testing new fuels’ refueling combustion cars and light trucks will peak within the infrastructure. Ohio’s fleets are natural early adopters next five years.24 Bloomberg New Energy Finance proj- for these technologies: Ohio is a leader in logistics; it ects that U.S. EV sales will grow about 30 percent per has access to diverse and a¥ordable choices such as year from now through 2030.25 natural gas, propane, biofuels and electricity; and it hosts manufacturers of these technologies. ᭤ General Motors will o¥er 22 EV options within the next five years, up from two today.26 By 2022, Ford will o¥er Emerging commercial and government fleet markets 40 all-electric or plug-in hybrid vehicles, up from two include buses that improve local air quality by using today.27 aims to grow sales of electrified vehicles, natural gas and propane, which also o¥er significant including hybrids, to two-thirds of global sales by 2030.28 cost savings compared with petroleum-based fuels. Plug-in electric trucks that export power for tools ᭤ Intel projects that the global market for automated shared negate the need for portable generators. In addi- 29 vehicles may be worth $7 trillion by 2050. Vehicle-to- tion, some fleets achieve substantial e£ciency gains vehicle connectivity is already installed in some GM cars through use of advanced routing and tra£c analysis and is expected to be widely available within a few years to limit idling, driving time, fuel cost, and emissions. after finalization of federal rules and standards.30

A Vision for Growth and Innovative Energy Investment 16 LEAD THE TRANSPORTATION TRANSFORMATION

than 13 percent through 2021.32 Ohio’s advanced automotive Make It Efficient materials sector currently employs more than 10,000 people and has tremendous potential to supply this growing portion 33 Investment, innovation, a skilled workforce, and increasing of the supply chain. fuel economy are driving a thriving automobile supply chain Engine e£ciency and performance will be another essential in Ohio. A 2017 report from the BlueGreen Alliance counts mechanism to increase fuel economy and meet strict more than 27,000 Ohio jobs—and 80 facilities—building pollution controls. Ford’s Lima engine plant manufactures clean and fuel-e£cient vehicle technology.31 This is the third the 2.7 liter EcoBoost V-6 engine for the F-150 pickup. most in the country after Michigan and Indiana. Despite the This engine provides the power of a larger engine but with threatened rollback of federal e£ciency standards for model greater fuel economy. years 2022–2025, policy requirements for increasingly e£cient automobiles and trucks remain around the world. Lightweight components and more e£cient engines with their origins in Ohio will continue to be in demand. Leverage Smart Improving fuel e£ciency and vehicle performance will Connections require incorporating aluminum, titanium, fiberglass and carbon fiber composites, and new steel alloys. Ohio’s The Executive Director of the U.S. Transportation Research manufacturers could benefit from this transition—from Board states that “connected and automated vehicles have raw materials processing through rolling, casting, milling, the potential to radically transform how the world works, and pressing into chassis, frames, and engine components. plays, and lives. It could be the biggest transformation in Research and Markets projects the global automotive light- transportation since the automobile.”34 Ohio has unique weight material market will grow at an annual rate of more resources for developing our future transportation system,

Owens Corning’s Composites business represents about one-third of the company’s revenues, and one quarter of that (or about $500 million/year) comes from transpor- tation.35 Composites o¥er light weight, which improves e£ciency and vehicle handling, but also o¥er tight toler- ance and repeatable moldings, allowing for improved assembly quality. Composites provide these benefits for all automobiles on the market—traditional, hybrid, and electric. Owens Corning supports collaborators ranging from startups to suppliers to major global automakers with design, modeling, and engineering support to enable them to choose composites. Given Ohio’s strengths in industrial research and automo- tive manufacturing, it’s no surprise that extensive work in vehicle light-weighting has taken place here. For example, researchers at the Owens Corning Science & Technology Center in Granville worked with Continental Structural Plastics (based in Michigan but with manufacturing facili- ties in Carey, Van Wert, Conneaut, and North Baltimore), Compose Tooling Expert, Altair Engineering, PPE, Hexion (headquartered in Columbus), and Brandolph to develop Owens Corning a new kind of lightweight body component.36 Combining the best of carbon fiber with glass composites, these HQ: Toledo; R&D: Granville firms devised a way to make components 13 percent lighter than aluminum.

17 Powering Ohio LEAD THE TRANSPORTATION TRANSFORMATION

and for attracting the innovators that will create new vehicle adoption, a growing number of smarter and more opportunities for growth. These resources give Ohio a leg capable cars and trucks will be electric. Electrification pres- up on other states in competing for new transportation ents a risk and opportunity for engine and transmission and mobility businesses. manufacturers: All-electric vehicles do not have engines or traditional transmissions, but they present opportunities for The Smart Columbus program, supported by $50 million electric motor and battery manufacturing. As for plug-in in grants from the U.S. Department of Transportation and hybrid EVs, they require entirely new kinds of drivetrains. Paul G. Allen Philanthropies, is bringing smart systems and Investment and growth in the state’s auto sector is at risk sustainable transportation innovation to central Ohio with if this next generation of vehicles passes Ohio by. the goals of improving quality of life, driving economic growth, improving safety, and fostering sustainability. Based on Synapse modeling informed by Bloomberg New The program includes EV charging, autonomous vehicles, Energy Finance EV market projections, we estimate that phone apps for bus users, and availability information and maintaining a status-quo focus on traditional internal reservation of parking spaces. Smart Columbus has already combustion drivetrain systems would cost Ohio over $740 leveraged the grant money ten-fold: local businesses have million in annual GDP by 2030, with the loss of 7,000 jobs made $500 million in investment commitments. Smart and the associated $675 million in annual wages. Including Columbus was originally housed in a local community-based indirect and induced e¥ects as these losses ripple through innovation center called the Idea Foundry, which is fitting the state’s economy, Ohio is at risk of losing an additional given its potential to inspire and inform local innovators of 18,000 jobs. the opportunities available in smart and sustainable trans- portation. Smart Columbus is also working closely with both FIGURE 4: Drivetrain and electric vehicle the City’s Division of Power and AEP Ohio to integrate system jobs in Ohio, with and without EVs into central Ohio’s transportation vision and pursue transforming Ohio’s auto industry to decarbonization initiatives. keep up with global changes Smart Columbus is not Ohio’s only smart transportation leadership resource: The Smart Mobility Corridor, a 35-mile portion of U.S. Route 33 from Dublin to East Liberty, will be a testing ground for real-world applications of connected and automated vehicles. Combined with the Transportation Research Center in East Liberty, this resource will attract vehicle system entrepreneurs and innovators developing and testing new components and integrated systems. The Ohio Turnpike Commission is also outfitting 60 miles of the turnpike as a testbed for automated and connected vehicles. Make It Electric If Ohio embraces the electrification opportunity, we calcu- Ohio is a top-three state across all aspects of vehicle manu- late that the state’s auto industry could grow. As the market facturing. Its manufacturers focus heavily on the drivetrain: shifts and grows to include both electric and combustion, namely engines and transmissions. Ohio is home to 18 by 2030 Ohio’s auto sector could grow by more than percent of the country’s engine-manufacturing jobs and $180 million in annual GDP if Ohio maintains its share of 15 percent of the transmission and power train jobs. Many, the combined drivetrain market. Ohio could attract more including General Motors, believe that automated vehi- than $6 billion in capital investment in electric drivetrain cles must be EVs.37 Regardless of the pace of automated facilities. With an additional 2,000 jobs and $135 million

2030 GDP 2030 Direct Jobs 2030 Wages Status Quo Risk -$744 million -6,942 -$675 million Transformation Gain +$188 million +2,068 +$135 million Net Opportunity +$932 million +9,010 +$810 million

A Vision for Growth and Innovative Energy Investment 18 LEAD THE TRANSPORTATION TRANSFORMATION

in annual wages, the net opportunity available to Ohio is therefore over 9,000 jobs and $900 million in annual GDP. Competitive companies around the world are investing in Workhorse developing and manufacturing new electric powertrain components. These businesses include GKN and ConMet, Group Inc. each of which has an Ohio presence. GKN Driveline makes Loveland transmission di¥erentials in Bowling Green,38 while its sister 39 plants are powering the plug-in BMW i8 and Volvo XC90. Established in 2007 as AMP Electric Vehicles, the GKN Sinter Metals is making gears, clutch pressure plates, Workhorse Group began by developing electric 40 and torque-converter components in Gallipolis, while its two-seat roadsters. Since then, the company has sister plants are making gears designed for high-RPM electric found a large market and growth opportunity in 41 drive applications. ConMet in Chillocothe supplies inte- powering commercial fleet vehicles. At its Loveland 42 rior assemblies to ; ConMet has partnered with headquarters, Workhouse designs and produces Protean Electric to develop an electric hub with regenerative battery-electric powertrains for its step vans, as well 43 braking. As these and other suppliers follow the growth in as a forthcoming delivery van and pickup. EVs, Ohio could be a natural choice for additional investment if the state can position itself as an EV leader. The E-GEN extended-range electric step van o¥ers four times the fuel economy and lower mainte- nance when compared with non-electric step vans. Drive It and The electric van can provide a three-year payback and save customers more than $165,000 per truck Charge It over a 20-year service life. The market opportu- nity for electric drivetrains is substantial: step vans Just as Henry Ford wanted his employees to be able to alone represent 20,000 potential orders per year. buy the cars they produced, Ohioans should be able to A new colla