During the recent
economic downturn, Montana’s wind industry has been a welcome bright spot, creating jobs, revenues for landowners and supporting county and state treasuries.
One important question now facing Montanans is how the state can leverage its renewable resources to cultivate a broader green economy that generates jobs, taxes and investments.
Headwaters Economics recently completed a report — “Clean Energy Leadership in the Rockies: Competitive Positioning in the Emerging Green Economy” — that compares how Montana, Colorado, New Mexico, Utah and Wyoming are taking advantage of clean energy opportunities.
The states with the best early results and strongest competitive position are those able to capture new energy opportunities — not only power generation facilities and manufacturing jobs, but investment and employment in the myriad technologies, products and services related to a growing worldwide demand for clean energy.
A rural state with a small economy, Montana faces a number of challenges.
On the positive side, Montana’s wind energy development is growing rapidly, mirroring regional and national trends. According to the governor’s office, installed wind energy in Montana is now at 376 megawatts, a dramatic increase from only 1 MW in 2004. One MW of wind generates about as much electricity as 275 households use.
Montana also has made a strong commitment to addressing transmission bottlenecks that hinder growth in clean energy.
Overall, however, Montana lags behind its neighbors. Montana’s green jobs were only 4 percent more numerous in 2007 than 1995. By comparison, regional clean energy leaders like Colorado and New Mexico experienced growth in green jobs of 30 and 62 percent, respectively, over the same period.
Montana also has missed important investment opportunities. Colorado and New Mexico collected close to $800 million and $239 million respectively in clean technology venture capital from 1999-2008. There was zero venture capital investment in clean technology in Montana during this time.
Public funding tells a similar story. Montana ranked last in the country in the competition for clean energy-oriented federal stimulus dollars in 2009.
These missed opportunities are significant: Clean technology was among the most resilient sectors of the global economy during the recent economic downturn. The billions of public and private investment dollars that went to clean energy leaders in 2008 and 2009 (and not to Montana) give states like Colorado and New Mexico a marked advantage in competing for the energy economy of the next decade.
The Clean Energy report concludes with five key steps for Montana and the region to foster future clean energy growth:
1) Strategic pairing of incentives with clear policy goals. Montana must help grow internal markets through clear policy signals. Progress depends on a smart mix of appropriate incentives and policies, such as Renewable Portfolio Standards with meaningful targets and compliance strategies.
2) Encourage and capture large-scale investment. To overcome its difficulty in attracting significant private or public clean technology investment, Montana needs to leverage and match investments to support innovation and entrepreneurship.
3) Cultivate a well-resourced business environment. Increased funding for education and research will attract high technology companies that require skilled workers and access to world class facilities.
4) Leadership. Montana’s governor must continue the strong personal outreach to renewable energy companies, along with support from the state legislature. Developers and manufacturers of clean energy and energy efficiency technologies operate in a highly competitive global environment. They need to see consistent leadership in order to commit to a state.
5) Overcome limited infrastructure
capacity. As one Montana state employee said: “It’s all about transmission” and the state has made a strong commitment to addressing limited capacity. To help grow future renewable energy production, Montana must continue its efforts to overcome an inadequate, outdated, and overstressed electrical grid.
For Montana to maximize its renewable resources, ranking fifth in the nation for wind energy potential is not enough. The state must make itself more attractive for both private and public investment while improving its energy efficiency policies and investing in worker training and research facilities.
— Julia Haggerty, Ph.D., is a policy analyst at Headwaters Economics, a Bozeman-based independent, nonprofit research group. Her e-mail is Julia@headwaterseconomics.org.