Buffalo Niagara Where Industry Creates Energy A comprehensive report on the green economy & Western New York’s alternative-energy manufacturing potential KWR International, Inc. Buffalo Niagara: Where Industry Creates Energy acknowledgments KWR International, Inc. (KWR) would like to thank Buf- Finally, KWR would like to thank the entire project team falo Niagara Enterprise (BNE) for commissioning, and who spent many late nights researching and tirelessly National Grid for funding, this report. dedicating themselves to this report. In particular KWR would like to thank Thomas Kucharski, Keith W. Rabin, President, July 2009 Graham Smith, Christopher Finn and David Griggs from BNE; Brian Reilly, City of Buffalo; Ed Kowaleski, Empire Prepared by: KWR International, Inc., New York, N.Y. State Development Corp.; Harvey Stenger, Jr., UB Dept. Research, Communications and Consulting Services for of Engineering & Applied Sciences, Sam Magavern, UB the Public and Private Sector Law School; Tim Leyh, The Center for Industrial Excel- www.kwrintl.com lence, Patrick Whalen, Buffalo Niagara Medical Campus, Tel. 1-212-532-3005 Mayor Paul Dyster, Joe Collura, Mike Casale and Lawrence Witul, City of Niagara Falls; Greg Stevens, RiverWright © 2009 KWR International, Inc. and Buffalo Niagara Bio-Fuel; Lee Payssa, Globe Metallurgical; Bob Knoer, The Enterprise Knoer Group; Dennis Webster, Moog; Brian Meredith, Praxair, Inc.; Jack Pedersen, Linde Inc.; and Jeff Peter- Lead Analyst & Project Director: Keith W. Rabin son, NYSERDA for their help, support and insights. KWR Contributing Editor: Rodney C. Hensel would also like to thank John Bohn, California Public Utili- Researchers: Suzanne Harvey, Laura Fulton, Brandon ties Commission; Gen Hajime Ito, Japan External Trade Rabinowitz, Alex Rabin, Alexandra Cohen, Dana Pills- Organization; Scott B. MacDonald, Aladdin Capital; Jeff bury-Tietavainen, Richard Wallace, Lindsey Snyder, Xin Siegel, Green Chip Stocks; and Michael Berry, Discovery Ye and Estelle Kone Investing for taking time to discuss this project and their Design & Layout: John Fulmer/East Mill Street Studio own views on the renewable energy sector. Cover Photos: iStock Other photos: as credited BUFFALO NIAGARA: WHERE INDUSTRY CREATES ENERGY Commissioned by: Buffalo Niagara Enterprise www.buffaloniagara.org Prepared by: KWR International, Inc. Funded by: www.kwrintl.com National Grid www.nationalgridus.com I KWR International, Inc. Buffalo Niagara: Where Industry Creates Energy Buffalo Niagara: Where Industry Creates Energy Foreword This report attempts to define the he U.S. Conference of Mayors estimated in 2006 Tthat the number of green jobs in the Buffalo Ni- green economy and to examine agara region of Western New York (Buffalo Niagara*) opportunities for job creation with could rise from an estimated 2,017 in 2006 to 15,959 an emphasis on manufacturing in 2038. Recent trends and developments, however, opportunities in Buffalo Niagara. indicate growth will be much faster as nations come to understand the accelerating importance of green ener- gy. These technologies promote energy independence, and services. This will create additional job possibilities lessen environmental degradation and stimulate de- in a multiplier effect across each link of the chain. mand during an increasingly severe global slowdown. Even more vital, they constitute the only means to pro- Buffalo Niagara offers a number of advantages to busi- vide the resources needed to sustain development and ness-creating green jobs. Its industrial capacity, proxim- growth in consumption in the emerging markets that ity to Canada and highly populated Northeast and Mid- are likely to drive global growth in the 21st century. west U.S. markets, Great Lakes location, transportation infrastructure and capacity, cost structure, academic This report attempts to define the green economy and to excellence, labor force and manufacturing heritage all examine opportunities for job creation with an emphasis provide distinct advantages to green companies. on manufacturing opportunities in Buffalo Niagara. By matching the needs of the green economy to the re- The renewable-energy industry is usually divided into gion’s assets, opportunities for job growth can be identi- five main sectors: wind, solar, hydro, biomass and fied. These opportunities can then be examined in terms geothermal. Some analysts also incorporate nuclear of strengths, opportunities and the competitive land- power within a wider category of alternative energy. scape. This will help to define strategies that can attract What these sectors have in common is that they all new growth as well as the programmatic recommenda- produce energy, on a large and small scale. There are tions to position Buffalo Niagara as a desirable “Center for also non-energy producing sectors that have potential Excellence” where “Industry Creates Energy.” to create jobs. This includes the smart grid and energy storage, transportation, green building and solid waste Bringing new green jobs to, and increasing economic management. activity within, Buffalo Niagara will position the region to participate in the development of the new green and To generate jobs in the new green economy it is im- renewable energy products that will increasingly drive portant to look—not only at the technologies—but also economic growth in the years to come. at related equipment and component manufacturing across entire supply and value chains. A value chain encompasses the steps needed to create related prod- *For the purposes of this study, Buffalo Niagara is defined ucts and the materials, products, people and services as comprising the eight counties of western New York, including Allegany, Chautauqua, Cattaraugus, Erie, Gen- needed in the process. The resulting end products—in esee, Niagara, Orleans and Wyoming. The U.S. Conference particular those that promote diversification toward of Mayors report cited, however, defines the region as Al- cleaner energy sources—create a demand for goods legany, Chautauqua, Erie and Niagara counties. II KWR International, Inc. Buffalo Niagara: Where Industry Creates Energy TABLE OF CONTENTS EXECUTIVE SUMMARY Nuclear sector overview 27 Pages 1-6 Opportunities 27 Processing & component manufacturing 28 I THE NEW GREEN ECONOMY II-C OTHER GREEN ECONOMY SECTORS Green jobs 7 Renewable energy 8 Energy-generation sectors 8 Energy Transmission & Storage The smart grid 29 II GREEN ECONOMY GROWTH SECTORS Microgrid opportunities 30 Bulk energy storage 30 Processing & component manufacturing 31 The value chain of the green economy 9 Potential green economy job creation 11 Green Buildings Technologies 32 II-B GREEN ECONOMY ENERGY SECTORS Appliances 32 Buildings 33 Solar sector overview 13 Leadership in Energy & Environmental Design 33 Technologies 13 Opportunities & outlook for sector 34 Market opportunities 13 Raw materials 14 Transportation Processing & component manufacturing 14 Technologies & opportunities 36 Processing & component manufacturing 37 Wind sector overview 15 Technologies 15 Solid Waste Management Market opportunities 15 Sector overview 38 Raw materials 16 Market opportunities 39 Processing & component manufacturing 17 Brownfields 39 Carbon sequestration 39 Geothermal sector overview 18 Recycling 40 Technologies 18 19 Market opportunities III BUFFALO NIAGARA & Raw materials 20 Processing & component manufacturing 20 THE GREEN ECONOMY Hydropower sector overview 21 Buffalo Niagara’s strengths Technologies 21 Geographic location 42 Market opportunities 21 The Great Lakes 42 Processing & component manufacturing 22 International trade 43 Transportation 43 Biomass sector overview 23 Low cost of living 44 Market opportunities 23 Manufacturing base 44 Technologies 24 Work force 45 Raw materials 24 Research & education 45 Processing & component manufacturing 26 Green economy synergies 46 III KWR International, Inc. Buffalo Niagara: Where Industry Creates Energy Qualitative & quantitative Hydropower sector 105 research methodology Biomass sector 109 Intra-Buffalo Niagara NAICS analysis 47 Nuclear sector 114 Total Buffalo Niagara revenue/firms Energy Transmission & Storage sector 118 with NAICS demonstrating statistical error 47 Green Building sector 121 Comparative analysis 48 Transportation sector 126 Intra-sectoral comparison 48 Solid Waste Management sector 130 Individual sectors & NAICS value chain analysis V INTERVIEWS & ANALYSIS Solar 49 Wind 51 Are renewable energy-related products Hydropower 53 ready to be commercialized? 134 Geothermal 56 How essential are government Biomass 58 stimulus & incentive programs? 135 Nuclear 61 Is excess capacity positive or negative Energy Transmission & Storage 63 in terms of seeking investment? 135 Green Buildings 65 How important is location & Buffalo Transportation 67 Niagara’s proximity to Canada? 136 Solid Waste Management 69 Is the sum of renewable energy worth more than individual sectors? 136 Buffalo Niagara weaknesses Can Buffalo Niagara serve as a laboratory Location 74 for a new U.S. industrial future? 137 General economic conditions 74 Is success simply a case of better promotion Government initiatives 74 & outreach? 140 Plan implementation 75 Do investors & site selectors help those Local assistance 76 who help themselves? 140 Buffalo Niagara opportunities Green community VI CONCLUSIONS & Canada RECOMMENDATIONS Wind Solar Conclusions of the report 141 Hydropower Education Major conclusions 143 University involvement in Buffalo Niagara Other models Additional findings 144 Notable colleges &