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Energy News Network: Advocates See Missed Opportunities as Virginia Lags Its Neighbors in Clean Energy Manufacturing

Posted by Elizabeth McGowan on May 28, 2024

Energy News Network reports on the growing gap between Virginia and its neighbors in clean energy manufacturing, quoting United's Kim Jemaine on the unlikelihood that Governor Youngkin will be able to support Virginia in catching up to other states in the Southeast.

When the nonprofit Environmental Entrepreneurs (E2) began tracking where financial incentives from the Inflation Reduction Act were spurring clean energy manufacturing growth and jobs nationwide, Zach Amittay figured Virginia would snag the top slot in the Southeast.

So he was startled that the state has consistently lagged behind South Carolina, North Carolina and Georgia since E2 began its research after the IRA became law in August 2022.

Through April, companies have announced at least 305 major clean energy projects in 40 states and Puerto Rico, according to data E2 has gathered. Those projects are tied to 105,400-plus jobs and more than $123 billion in capital investments.

Of those 305 projects, just four — two connected to offshore wind, one to hydrogen and one to modernizing the electrical grid — have Virginia connections.

Meanwhile, Georgia has lured 27 projects, South Carolina, 24, and North Carolina, 19. 

E2, a national, nonpartisan group of investors, business leaders and professionals, launched its research project to bring more clarity to the IRA allocation process.

“For the average layperson, it’s inscrutable,” Amittay said. “We figured we could dedicate staff time to aggregating information and making it more digestible.”

Virginia has its share of success stories but needs to double down on efforts to entice more manufacturers that are part of the renewable energy supply chain, he noted. Deploying solar panels and wind turbines is only half of the clean energy equation.

“When it comes to attracting investments, the state is missing out by doing the opposite and, it seems, pushing them away.”

Christian Martinez, spokesman for Republican Gov. Glenn Youngkin, countered that take.

He pointed to the administration’s 2022 all-of-the-above Energy Plan as underscoring Virginia’s commitment to being a premier business location while also recognizing energy as a crucial productivity driver.

Without citing specifics, Martinez noted that Youngkin “looks forward to sharing details on several economic development opportunities … when they are ready.”

Rejecting EV battery plant set wrong tone

While state leaders can’t control company whims, Amittay and other clean energy advocates do directly blame Youngkin for nixing a proposal by Ford Motor Co. in late 2022 to build a plant to manufacture electric vehicle batteries on an industrial site in Pittsylvania County on the North Carolina border.

The automaker’s decision to partner with a Chinese company posed too high of a security risk, Youngkin said at the time.

Youngkin’s concerns about China’s influence in this country could have been navigated so Virginia’s opportunity for the battery facility didn’t go up in smoke, Amittay said.

“At the time, he was trying to establish a national brand because he had bigger political ambitions,” he said about Youngkin’s presidential aspirations.

In February 2023, Ford announced that the battery plant would be built in Marshall, Michigan.

That loss not only hurt Virginia, Amittay said, but also cued companies that the state might be wary of rolling out the welcome mat to clean energy innovation.

IRA a magnet for hydrogen, wind, grid upgrade 

At its core, the Inflation Reduction Act is a massive package that dedicates $369 billion over 10 years to clean energy innovation via tax credits, rebates and other incentives. Many of its programs are designed to boost domestic manufacturing jobs as the country transitions away from fossil fuels.

The latter is a signal to stateside and international businesses, Amittay said, that the United States is serious about tamping down the emissions of heat-trapping gases that are causing climate change.

Thus far, the pull of the IRA’s promise has convinced four companies, Hitachi Energy, Fugro, Lyon Shipyard and Topsoe, to either expand or put down roots in Virginia, according to E2’s database.

The Virginia investment is just a tiny slice of the $1.5 billion Hitachi is pouring into its transformer capacity globally as demand for electricity explodes because of the growth of everything from data centers to electric vehicles.

Can Virginia catch up?

“We’re still in the early innings, but this is going to be transformational for the U.S.,” Amittay said about IRA infusions. “It’s complicated because there are a lot of technical details, a lot of agencies involved and some funding programs haven’t been rolled out yet.”

Despite those hurdles nationwide, Kim Jemaine, Virginia director for Advanced Energy United, isn’t confident that Youngkin has the will or the wherewithal to catch up with other states in the Southeast.

Her organization represents businesses intent on accelerating a clean energy transition.

In her eyes, the governor has spent too much time undermining the Virginia Clean Economy Act and promoting far-off energy sources such as small modular nuclear reactors.

“By touting an all-of-the-above policy, he’s missing research and development and manufacturing opportunities in other investment spaces,” Jemaine said. “What about batteries and long-term storage? There’s a ton of untapped potential there.”

She’s also worried that some of the initial excitement about transforming the Hampton Roads region into an offshore wind hub has fizzled since Youngkin took office in 2022. That political landscape means it’s easier for existing companies to expand than for new ones to move in.

With so much ground to make up, Amittay agreed, waiting around isn’t an option.

“We all know that the best time to plant a tree is 30 years ago, but the next best time is today. It’s time for Virginia to think about how it can plant some trees.”

Read the full article here.

Topics: State Policy, Virginia, United In The News, Kim Jemaine