Energy mandate spawning new industry in N.C.

RALEIGH – History is being made in North Carolina with the slow birth of a new industry – the production of electricity from renewable resources.

The latest company in the incubator is one called Economic Power & Steam Generation. Incorporation papers haven’t yet been filed by the company, though the corporate name has been reserved. Yet the Nash County firm says it intends to invest $60 million to build a 20 megawatt biomass power plant.

And the state agency that oversees such matters, the North Carolina Utilities Commission, on Nov. 3 gave the company permission to go forward.

The Nash County company thus became the latest in a growing list of businesses looking to tap a rising demand for renewable energy – an industry that already has become an estimated $3.5 billion business in North Carolina.

The birth of renewable energy companies follows the passage of Senate Bill 3, wide-ranging 2007 energy legislation that set renewable energy generation targets for the state’s electric utilities. Since the law’s passage, both Progress Energy and Duke Energy have been working on their own and with new energy providers to bring more renewable generation into their energy portfolios.

Rules governing how renewable energy would be sold to utilities were finalized in 2008. Paul Quinlan, director of economic research for the North Carolina Sustainable Energy Association, says that since then, energy companies have been ramping up the pursuit of more projects. “Now we’re starting to see the growth of these companies and the expansion of these companies,” he says.

Quinlan co-authored a recent report on the renewable energy and energy efficiency industries. The study, based on surveys of companies in the sector, estimates that the renewable energy industry employs 10,250 full-time workers who helped their companies generate $3.5 billion in revenue in the last year.

Richard Harkrader, CEO of Durham’s Carolina Solar Energy, says the 2007 energy legislation was crucial for his business and others. The law set targets for bringing renewable generation online. By 2021, 12.5 percent of utilities’ generation must come from renewables. The first target is in 2012, when utilities must have 3 percent of their generation from renewable sources.

Preston Curtis, managing director of Economic Power & Steam Generation, referred questions to his business partner, Ralph Haber. Haber says the partners have not built any other energy generation plants. He declined to answer questions about the project, saying much of the information is confidential.

In documents filed with the Utilities Commission, the company says the facility will replace an existing steam generation facility at a Perdue Farms chicken-processing and rendering facility in Bertie County. In the filings, the company says it is pursuing a 20-year contract with Dominion Power in which the Richmond, Va.-based utility, which serves customers in northeastern North Carolina, would buy power produced by the plant.

Quinlan says biomass – wood and wood waste products that can be burned with coal or alone to generate electricity – makes sense for North Carolina because of its abundance in the state. But he says that in the short term solar energy projects are taking hold because they are less expensive and quicker to set up.

Duke and Progress are taking different approaches to the renewable energy requirement. Duke for the most part is building its own renewable energy facilities. Progress has been looking to buy power from third parties. Harkrader, who has several solar facilities that sell power to Progress, says the economic downturn has led a lot of companies to defer projects. But he says he expects that the renewable energy targets will help businesses grow.

“We wouldn’t be here otherwise,” he says. “For years, utilities wouldn’t even talk to us.”