Energy Transition Lab Report: Renewable Energy Projects Offer Big Jobs Potential for Duluth Area

A new report from the University’s Energy Transition Lab (ETL), which is based at the Law School, finds that more than 2,000 renewable energy jobs could be added to the northeast Minnesota/northwest Wisconsin economy if a range of biomass and solar projects come to fruition.

The report, titled “Duluth’s Energy Future: Economic Modeling of Proposed Biomass and Solar Initiatives,” was produced in partnership with the Bureau of Business and Economic Research at the Labovitz School of Business and Economics, University of Minnesota, Duluth (UMD). Community leaders from Duluth’s city government, local businesses and nonprofit organizations, Minnesota Power, and UMD provided early-stage input regarding their visions for the area’s energy future.

“This report shows how investments in biomass and solar projects today could result in future economic, employment, and environmental benefits across the region,” said Ellen Anderson (’86), executive director of the Energy Transition Lab. “Additionally, the energy and products mentioned in the report will be produced by local resources rather than imported fuels.”

The report analyzes the economic impact of five proposed projects: 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, and solar power production arrays. The geographic scope of the report includes the seven Minnesota counties of the Arrowhead region (Aitkin, Carlton, Cook, Itasca, Koochiching, Lake, and St. Louis) and Douglas County, Wisconsin.

Among the report’s key findings:

• The total economic impacts from the construction of the four biomass projects could support nearly 1,600 jobs in the eight-county region.
• The jobs mentioned above would result in 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.
• According to project stakeholders, the four biomass projects included in this study would require approximately 625,000 tons of biomass each year, the equivalent of approximately 300,000 cords. This represents roughly 9% of 2012 harvest levels.
• Overall, an additional $320 million in annual local production (i.e., sales and revenue) would be created in the region as a result of the four proposed biomass facilities.
• For both construction and operations, the largest effects come from the biorenewable chemical plants, which represent more than 70% of the combined effects from construction of the four projects and roughly 90% of the impacts from operations.

 “It is important for the state to be considering new economic options as the mining sector undergoes transitions,” said Monica Haynes, director of the Bureau of Business and Economic Research. “These renewable energy jobs could prove to be very beneficial to the Arrowhead region.”

The Energy Transition Lab is a strategic initiative of the University of Minnesota's Institute on the Environment in partnership with the Office of the Vice President of Research and the Law School. For more information, visit energytransition.umn.edu.

The report was made possible by funding from the McKnight Foundation. Duluth Energy Systems, Ecolibrium 3, the Great Plains Institute, Innovative Power Systems, and the Natural Resources Research Institute contributed data to the analysis.