Iowa hopes to stay ahead in the race for green job

Iowa got off to an early lead in the global race for green jobs. But staying out in front may prove more difficult.

After gaining an edge in biofuels production in the 1990s, Iowa expanded its biofuels margin in the past decade and took a leading role in recruiting wind-power-equipment manufacturers and development wind energy. The state's green economy is one of the reasons Iowa's unemployment rate stands at 6 percent when the nation as a whole has a 9.1 percent jobless rate.

The Corn Growers Association figures, for example, that ethanol has contributed more than 70,000 jobs to the state's economy. The Office of Energy Independence reports that more than 2,300 jobs are committed to wind manufacturing in the state.

Competition for investment in renewable energy and other “clean tech” fields has been heating up, according to a recent report from the International Economic Development Council.

Compared to five years ago, 80 percent of state economic development officials surveyed by the council said they were “much more” active in targeting renewable energy for economic development purposes.

Research and development investment in renewable energy is the most hotly pursued area, the survey found, followed by wind energy equipment manufacturing, biomass production, solar equipment manufacturing and wind power production.

The challenge to stay out front is acknowledged by Debi Durham, director of the Iowa Department of Economic Development.

“We have staked a competitive claim in this platform, and we will continue to grow from it,” Durham said, “and not just in wind.

“There are a number of solar opportunities we've looked at. Nuclear is something the Governor's office and this office also support, along with natural gas.”

But the renewable energy initiative for which Iowa was most prominently noted in the International Economic Development Council has been mostly dismantled under the Branstad administration.

Iowa created the Iowa Power Fund, which provided $25 million per year to finance renewable energy R&D projects and helped fill gaps in financing for green energy initiatives, under the Chet Culver administration.

The fund, administered by an 18-member board, distributed more than $60 million in direct investment over its lifetime, helping to leverage $546 million in mainly private investment in at least 45 projects.

Durham said the problem with the fund was that it “tried to become all things to all people,” receiving assistance requests for any kind of project involving energy. She said the department now assists businesses directly, or refers the projects to other state departments that are more closely aligned with the needs of business, such as the Iowa Utilities Board or the Department of Agriculture.

The state is working to leverage resources and deploy them “in a more strategic manner,” Durham said. It also is working closely with Iowa State University to use its research in emerging biotechnologies.

The Iowa Wind Energy Association this year urged the Iowa General Assembly to set a new goal to triple the state's wind power to 10,000 megawatts of installed renewable energy capacity by 2020, and to double that to 20,000 megawatts of capacity by 2030.

Meeting the 20-gigawatt goal would mean 9,567 new jobs, $23.8 million in additional land lease payments and $6.1 billion in property tax assessed valuation, according to the group. It estimated the goal would generate $248.8 million in new salary income.

With demand for more wind generation in Iowa, “more and more of the supply chain would follow just because of the visibility of the industry in Iowa,” said Harold Prior, executive director of the Iowa Wind Energy Association.

Durham said raising the renewable portfolio standard is not supported by the Iowa Department of Economic Development because the state has far surpassed the original standard set during Gov. Branstad's previous terms in office, and Iowa is continuing to make strong progress in expanding renewable power.

One of the coveted green energy businesses that has selected Iowa is Acciona, a Spanish company that chose the former Sauer-Danfoss plant in West Branch in 2006 for its first North American wind turbine plant.

Adrian LaTrace, the former Acciona general manager who oversaw the site selection, earlier this month said Iowa has a lot going for it - including good logistic access to wind power equipment markets, an excellent work force and state support.

He noted Iowa even paid Acciona to send its new hires to Spain, where it could learn how to manufacture wind turbines the Acciona way from experienced technicians.

“Iowa, under Gov. Culver's leadership, was very progressive in the wind space,” LaTrace said. “Since then, states like Michigan have been more involved in attracting clean tech. Minnesota has, and Governor (Pat) Quinn in Illinois.”

LaTrace is now the principle of LaTrace & Associates, a Chicago-based consultancy in the clean tech field.

Acciona in West Branch cut its staffing in March 2009. It's now at about 116, down from a peak of 180 before the financial crisis and uncertainty over whether Congress would renew federal tax incentives for wind power generators.

Demand is returning, but not enough to warrant a big expansion in work force.

The company has benefitted from state and local incentives well beyond training. Other pluses include one of the final Iowa Power Fund grants to help commercialize a larger new wind turbine that will be made at West Branch, and the widening of the Interstate 80 ramps at West Branch to allow the extra-long trucks hauling the turbines to turn on and off safely.

Acciona CEO Joe Baker noted the company could benefit from a higher renewable portfolio standard in the state. But one of the main things that would help it grow is beyond Iowa's control - companies that buy wind turbines need long-range certainty on the future of a federal treasury grant program that incentivizes development of wind farms.

Baker said Gov. Terry Branstad has listened carefully to the company's needs at several meetings and seems to be tuned in to the needs of business.

“He's sincere,” Baker said, adding that he thinks Branstad would be open to consideration of any legitimate business need Acciona presented.

Iowa's largest biofuels industry group isn't not concerned about Iowa losing its edge.

“I can't think of another state that has more green jobs or is better positioned to have more green jobs in the future,” said Iowa Renewable Fuels Association Executive Director Monte Shaw.