Grapevine Economic Impact and Job Creation aspects of Geothermal Heat Pumps Don Penn, PE, CGD October 3, 2012 Scottsdale
Purpose: To create a large, private-sector infusion of capital into the state s economy; to create new manufacturing; stimulate existing manufacturing; create new jobs; and establish a new, viable industry in the state. Create from this a national / international public relations effort that will brand the Client as the place to find all things solar, geothermal, geothermal heat pumps and other non-petroleum or coal based energy production. This will be financed by the private sector primarily from Energy Savings and will serve as The Model for the Renewable Energy Industry.
The REMI Model 1. REMI is an economic- demographic forecas7ng and simula7on model developed by Regional Economic Models, Inc. 2. REMI is designed to forecast the impact of public policies and external events on an economy and its popula7on. 3. The REMI model is recognized by the business and academic community as the leading regional forecast/simula7on tool available 4. REMI is a dynamic model that produces integrated mul7year forecasts and accounts for dynamic feedbacks among its economic and demographic variables. 5. The opera7on of the REMI model has been developed to facilitate the simula7on of policy changes, such as a tax increase for example, or many other types of events from the opening of a new business to closure of a military base to a natural disaster. 6. The REMI model is also an "open" model in that it explicitly accounts for trade and migra7on flows in and out of the region. 7. The REMI model then automa7cally produces a detailed set of simula7on results showing the differences in the values of each economic variable between the control and the alterna7ve forecast.
The REMI Model Technical feasibility Business / financial feasibility Legal / regulatory feasibility review Environmental feasibility Economic feasibility Sensitivity Analysis Contracted with W.P. Carey School of Business, Arizona State University, Economics Department
Business/Financial Feasibility Must demonstrate a robust business case to all groups of stakeholders. Essential elements of Analysis: Competitor Analysis (if appropriate) this would encompass other methods of substituting conventional HVAC with other renewable systems. A Demand Assessment with demand for systems expressed by type of building/location over time for various exogenous demand variable scenarios. Life Cycle Cost Analysis including all relevant costs
PROJECT DATA SQUARE FOOTAGE 300,000,000 TOTAL ENERGY COSTS $676,514,137 CURRENT ENERGY COST PER SQ FT /YEAR $2.26 PROJECTED GEO ENERGY SAVINGS $253,692,801 PROJECTED ENERGY COSTS WITH GEO $422,821,336 SOLAR ENERGY PRODUCTION $126,846,400 (30% REDUCTION) 250 MW PROJECTED ENERGY COSTS TOTAL $295,974,935 PROJECTED ENERGY COST PER SQ FT/YEAR $0.99 POTENTIAL ANNUAL SAVINGS $380,539,202
ANNUAL MATERIAL/MANUFACTURING REQUIREMENTS MATERIAL/MFGR COST TRANSPORT COST ANNUAL COST GEOTHERMAL WELL FIELD $51,438,898 $1,414,570 $52,853,468 GEOTHERMAL HVAC $98,728,956 $2,715,046 $101,444,002 DUCTWORK $56,065,994 $1,541,815 $57,607,808 ELECTRICAL $19,416,695 $533,959 $19,950,654 SOLAR $129,327,948 $3,556,519 $132,884,467 TEMPERATURE CONTROLS $9,928,196 $273,025 $10,201,222 TOTALS $364,906,688 $10,034,934 $374,941,621
BENEFITS FOR THE CLIENT 1. ANNUAL ENERGY SAVINGS OF $380 MILLION 2. CO2 EMISSIONS REDUCTION PER YEAR OF 2.7 MILLION METRIC TONS. 3. ESTABLISHES CLIENT AS THE LEADER IN COMMERICAL RENEWABLE ENERGY 4. ESTABLISHES 16,000 CONSTRUCTION JOBS A YEAR 5. INCENTIVE FOR RENEWABLE MANUFACTURERS TO LOCATE MANUFACTURING FACILITIES IN ARIZONA: (30% TAX INCENTIVE FOR MANUFACTURERS) GEOTHERMAL HEAT PUMP MANUFACTURERS GEOTHERMAL PIPING MANUFACTURERS SOLAR CELL MANUFACTURER 6. NEED $3.7 BILLION IN MANUFACTURED COMPONENTS IN THE NEXT TEN YEARS: GEOTHERMAL HEAT PUMPS $1 BILLION SOLAR PANELS $ 1.3 BILLION GEOTHERMAL PIPING $ 0.5 BILLION 7. CREATION OF MANUFACTURING JOBS IN ARIZONA 10-20,000 NEW JOBS/NEW INDUSTRY 8. LEADERS IN UNIVERSITY ENGINEERING AND ARCHITECTURAL RENEWABLE ENERGY EDUCATION DEGREES.