Wednesday, March 24, 2010

Renewable Energy as State Export Candidate

Through a macro-economic lens, renewable energy can be considered an export commodity. In the global economy in which we live today, the U.S. is always looking ways to exert reversal pressures on the never-ending trade imbalance. However, unless renewable energy-based electricity is used to create say, hydrogen, it isn't feasible to export to other countries. Instead, the argument could be made that creating a commodity (electricity) that can be sold to other states creates financial benefits more local in nature.

This is not meant to be a debate on "sending our electricity to out-of-staters" or any other such arguments. Rather, it is meant to be a glimpse into the opportunities that lie before every state and the competitive forces that (like it or not) exist between the states for a resource that can be "manufactured" and sold to other states.

It is no secret that California has the most challenging goals for the portion of power that is to be created from renewable energy by the year 2020 at 33%. Sure, their totals include hydroelectric-based generation, but the point is clear: they are aggressive. On Monday, Colorado's Governor Bill Ritter signed into law a bill calling for 30% of that state's power to come from renewable energy sources by 2020. Previously, Colorado's target was 20% by 2020. “Today we continue to chart a new course for Colorado’s New Energy Economy and America’s clean energy economy,” Ritter said in a statement. “Colorado is giving every state and the entire nation a template for tomorrow. This is a game-changer. We are transforming the future of Colorado and our country.”

Let the games begin!

Just as renewable energy is (for now) a small part of the U.S. energy picture, so is the competition between the states for how much of this commodity they are able to create, use and potentially export to other states. Bringing macro-economics closer to the micro: the more of a state commodity that can be exported, the more flow of revenue into the state that occurs. Nothing is wrong with this picture.

How do we get into the game? Education.

By providing our students with a comprehensive education including renewable energy, we are laying the groundwork for innovation and commercialization of a valuable commodity for the state. Studies show that when students must go out of state for their post-secondary education, we often loose them to other states or countries when they complete their education. By providing that educational opportunity locally, we are more apt to keep our students local - and keep the societal and financial benefits that come with that.

Dave

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