Opportunity

Our Clean Energy Agenda: Creating jobs & powering the new economy

We’ve seen high tech and biotech change the economic landscape of New England. Now many believe that clean energy—technology and services that support energy efficiency and renewables, while reducing harmful greenhouse gas pollution—can be the region’s next economic engine of change for decades to come, but only if we build the correct foundation. The Council’s mission is accelerate New England’s clean energy economy to global leadership by building an active community of stakeholders and a world-class cluster of clean energy companies.

Massachusetts should be in a leadership position in this emerging industry. Our leading-edge universities, strong entrepreneurial culture, well-educated workers, and access to capital provide a sound foundation.

Clean Energy – A Booming New Sector

According to CleanEdge, an independent analyst firm, the market for renewable energy expanded from $9.5 billion in 2002 to over $55.4 billion in 2006, nearly a six fold increase in just four years. By 2016, it is expected to grow to over $226 billion.

Moreover, in 2006, “Cleantech” investments—which include clean energy as well as other industries focused on resource sustainability—became the third-largest North American venture capital investment category, exceeding traditional segments such as telecommunications and medical devices. Total North American venture capital invested in cleantech companies reached $2.9 billion in 2006, an increase of 78 percent over the $1.6 billion invested in 2005. (1)

This correlates directly to new job creation. According to a May, 2006 report by E2 and the Cleantech Network, every $100 million in venture capital funding spurs the creation of 2,700 direct jobs in new clean energy companies.

Clean Energy Stimulates New Job Creation

The recent Clean Energy Census showed that the Massachusetts’ clean energy cluster supports 14,400 jobs and is poised to be 10th largest industry in the state with a growth rate projected at over 20% per year. (2) Furthermore, it extends throughout the State, with clean energy businesses in the Berkshires, around Springfield & Worcester, and up and down the Massachusetts coastline.

Moreover, jobs in renewables, efficiency and demand-side management are applicable to workers at every level of the academic and skills ladder. Clean energy jobs run the gamut from Ph.D research to solar panel installation, energy audits, weatherizing buildings and maintenance of wind turbines. Not only can these jobs not be outsourced, but with proper training, they are also appropriate for low-income and disadvantaged workers.

Renewables are a better investment than fossil fuels from a job creation perspective as well. An independent study found that “the renewable energy sector generates more jobs per megawatt of power installed, per unit of energy produced, and per dollar of investment, than the fossil-fuel-based energy sector.” (3)

Clean Energy Lowers Costs & Increases Capacity Energy efficiency is the quickest, cheapest, cleanest answer to the looming energy crisis. For every $1 invested in energy efficiency, more than $3 is saved. Efficiency programs deliver energy savings at about 3.2 cents per kilowatt hour while energy supply costs customers about 10 cents per kilowatt hour. (4) Energy efficiency reduces rates overall by lowering demand; reduces the need for new and expensive power plants; and pays dividends to customers in the form of lower bills.

The combination of renewables with energy efficiency is even more powerful. A report by the American Council for an Energy Efficient Economy (ACEEE) showed that if policy initiatives to increase investment in energy efficiency and renewable energy were implemented, natural gas prices would fall by about 20% within five years, saving over $100 billion nationwide. (5) In a report focused on Texas, the ACEEE concluded that cost-effective investments in the combination of energy efficiency and alternative generation technologies could reduce overall electricity costs, boost net employment, and reduce air pollutants within the state. For example, by 2023, businesses and households in Texas could enjoy a net savings of more than $5 billion and show a net employment increase of about 38,300 jobs.(6) Surely if Texas—a major producer of oil and natural gas—sees the wisdom of this strategy, Massachusetts needs to act quickly to gain a competitive advantage.

Massachusetts and the 21st Century Energy Economy The new energy economy is coming whether we like it or not. In the next 50 years our economy will almost certainly be powered by something other than fossil fuels.The question is whether Massachusetts will be a significant supplier of renewable energy and related technologies—or merely a large consumer. The time is now to ensure that, in the future, our energy dollars flow to Massachusetts workers and companies—rather than to those in other states. (1) Cleantech Venture Capital: How Public Policy Has Stimulated Private Investment, May 2007, E2 & Cleantech Venture Network (2) Massachusetts Clean Energy Industry Census, August 2007, Massachusetts Renewable Energy Trust (3) Kammen, D., Kapadia, K., & Fripp, M. “Putting Renewables to Work: How Many Jobs Can the Clean Energy Industry Generate?” Energy and Resources Group/Goldman School of Public Policy at University of California, Berkeley. (2004) (4) Climate Change Roadmap for New England and Canada, Environment Northeast, 2006 (5) Impacts of Energy Efficiency and Renewable Energy on Natural Gas Markets, ACEEE, April 2005 (6) The Economic Benefits of an Energy Efficiency and Onsite Renewable Energy Strategy to Meet Growing Electricity Needs in Texas, ACEEE, September 2007