Submitted by: Kathryn G. Spritzer, City and County of Denver Asset Manager
On April 14, 2009, NAIOP Colorado’s breakfast meeting featured a panel of speakers discussing Renewable Energy. The program moderator, reporter Steve Raabe of The Denver Post introduced the renewable energy experts on the panel to over 250 attendees at the Downtown Marriott City Center. The program was designed to give the audience an overview of the renewable energy industry in Colorado, and discuss the impact of the new energy economy from a real estate perspective.
Doug Arent, Director of Strategic Energy Analysis, of the National Renewable Energy Lab (NREL) gave the audience an overview of NREL’s impact on our economy. Mr. Arent joked that NREL’s slogan could be “30 years to overnight success”, as NREL has been present here for 30 years but only recently has had a significant impact on the economy. This year, for example, NREL has a robust budget and plans to add 300-400 jobs, despite the slow economy. Steve Raabe noted that companies locating in Colorado often cite NREL as an influence for coming here. Mr. Arent pointed out that all types of renewables have shown exponential growth over the past 7 years. However, he went on to say that renewable energy still represents only a small fraction (6%) of energy usage in the U.S. (compared to 13% worldwide). This figure is expected to grow modestly to 9% (14% worldwide) by the year 2030. In addition, developers of real estate who build or retrofit to “green” standards will be better able to attract tenants and lower operating expenses. In many cases, payback periods are very fast and fixing what you have can make a bigger impact than building new. And for more bang-for-the-buck, many states provide lucrative incentives for developing renewable energy resources. For a comprehensive listing, Mr. Arent recommends visiting the Database of State Incentives for Renewable Energy (DSIRE). Click Here to view Mr. Arent’s presentation.
Rick Gilliam, Director of Western States Policy for SunEdison, a solar energy firm who has developed an 8.2 megawatt photovoltaic solar energy facility in Colorado’s San Luis Valley, spoke next. Mr. Gilliam noted that SunEdison sells energy back to the grid and provides power for users including Whole Foods, Staples, WalMart and Kohl’s. He stated that buying land for photovoltaic facilities can be very complex, with buyers needing to consider not only land cost, but property taxes, neighboring landowners' concerns, nearby uses and transmission concerns. Later in the program, Mr. Gilliam addressed the economic benefits of solar in terms of job creation: the development and installation process employs 15 to 30 people per megawatt, but there is little work once the facility is up and running. For this reason, he noted that SunEdison subcontracts their services for one-off smaller installations in between major developments.
Nick Lenssen, Senior Specialist in Market Intelligence for Vestas-American Wind Technology, Inc. gave a brief overview of Vestas. A Danish company, Vestas is the world's largest producer of wind turbines. Vestas has a large wind turbine blade plant located in Windsor, Colorado, and is planning the world's largest wind tower factory in Pueblo. He expects that at full build out, Vestas will employ 2,500 people in Colorado. Mr. Lenssen noted that Vestas chose to locate in Colorado because of the state's central location, making it easy to ship parts up and down through the "wind belt". When asked who the competitors are in wind turbine development, Mr. Lenssen cited GE, Mitsubishi, and Siemens. He noted that most of these competitors produce wind turbines overseas and while none of them currently have plans for Colorado facilities, there is increased interest in expanding into North America.
The next question was directed to Stew Mosko, Senior Vice President at Fuller and Company, and the broker who represented Conoco-Phillips in their purchase of the Storage-Tek site in Louisville. Mr. Mosko noted that at full build out, the 450-acre Conoco-Phillips campus could employ 12,000 people in Colorado; however, construction is moving slowly because of a year-long "green demolition" process and additional work to shore-up floor loadings. When asked what attracted Conoco-Phillips to Colorado, Mr. Mosko joked, "Really good brokerage."
Closing the program was a discussion about real estate challenges in installing renewable energy plants. Doug Arent of NREL talked about the challenges of achieving adequate transmission, particularly when it comes to dealing with the Western Renewable Energy Zone, interconnect studies, siting lines, private property rights issues, and so-called "NIMBY-ism". Most people do not realize that solar panels are only five feet high and are located away from other people, said Mr. Arent. He noted that opposition decreases if there is a positive benefit to neighbors, such as in the case of wind farm cooperatives where all the farmers in an area share in the revenues of a wind turbine.
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