Duluth’s Energy Future: Economic Modeling of Proposed Biomass and Solar Initiatives
In early 2015, several dozen community leaders from Duluth’s city government, local businesses, electric utility company, nonprofit organizations, and the University of Minnesota Duluth participated in a charrette to determine an Energy Future Vision for the city. The goal of the charrette was to capture “the ambitions and concerns” of the key stakeholders, with relevant economic, social, environmental, [and] sustainability aspects.” One of the group’s priority conclusions was the need to understand jobs and economic development impacts of different energy options. They asked the Energy Transition Lab to help Duluth analyze the economic and jobs implications of more locally produced energy from biomass and solar energy. The Energy Transition Lab partnered with UMD’s Bureau of Business and Economic Research (BBER) to model the potential economic impact of of five proposed projects on Northeast Minnesota. Each of the five projects was selected based on local feasibility and interest. Projects selected for modeling included the following:
- The Grand Marais Biomass District Heating System
- The Duluth Energy Systems Plant Retrofit and Biomass Conversion
- A Torrefaction Processing Plant
- Two Biorenewable Chemical Production Plants
- The Installation of Solar Power Production Arrays in the Region
These five projects, were they to occur, could represent a significant increase in the use and production of renewable energy in the Arrowhead region. Four of the five projects included in the analysis involve the use of biomass as a fuel source or feedstock. The total economic impacts from the construction of these four projects could support nearly 1,600 jobs in the eight-county region, an additional $83 million in labor income, and would contribute roughly $154 million in value-added spending to the region’s Gross Regional Product (GRP). The combined effects for a typical year of operations from the four projects would equate to more than 1,000 new jobs in the eight-county study area, an additional $54 million in wages, benefits, and proprietor income, and an $80 million contribution to the region’s GRP.