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Jump Starting Minnesota's Green Economy

May 28, 2010 By Salman Mitha, PhD, Minnesota 2020 Fellow

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Minnesota is a national leader in green technology. Leadership by the state legislature has put Minnesota on the path to produce 25 percent of its electricity by wind and other renewable sources. Minnesota is also a leader in producing and using ethanol for transportation. Minnesota has the largest network of E85 ethanol-blend fuel pumps in the United States. Our leadership in the green technology sector has greatly benefited us; wind and ethanol revenues put millions of dollars directly into Minnesotans' pockets. By getting into green technologies early, Minnesota has gotten a head start into the new economy. But the rest of the world is catching up.
 
Climate and economic concerns are pushing national and local governments worldwide to attract and develop green businesses. The Chinese leadership in particular is turning their focus toward the green technologies. The world's fastest growing economy is starting to produce and consume green technologies such as solar panels, electric cars and fast trains. The Scandinavian countries have already demonstrated that it is possible to simultaneously reduce CO2 emissions and grow the economy. In the last three decades with good leadership, Norway and Denmark have consistently reduced their energy consumption and delivered strong economic growth. These countries are well positioned for economic revolution.
 
Minnesota needs to stay in the race. Minnesota is a highly educated state with a very strong university system. We have all the right resources to form a green technology industrial cluster. Minnesota's track record of forming clusters for cutting edge technologies like supercomputers in the past to medical devices today. With strong leadership, we are well positioned to take advantage of the changing economic climate.

The objective of this report is to inject business and technical discipline into Minnesota's green economy policy framework. Minnesota already has had success in improving our state's economy and environment by developing well thought out policy such as the wind mandate.  This was due to a consensus between government and industry based on sound science and good business practices.  This report develops a methodology to identify ways to develop the green economy and back it up with specific and detailed ideas where Minnesota can and should act.



Key Findings

The business communities, including venture capitalists, have already turned their focus toward green technology as the next growth sector. Strong leadership in the state can provide a coherent business friendly approach to developing Minnesota's green economy. This report reviews seven specific opportunities for green technology growth in Minnesota. Based on Minnesota's current economy, knowledge base and geography, the following projects are the best positioned to jump start Minnesota's green economy and stimulate job growth in the coming years.

Green Fertilizer from the Wind: Minnesota has enormous wind power capacity, far more than the grid can absorb in the foreseeable future. This surplus wind power can be used to produce ammonia for fertilizer. Minnesota's own fertilizer needs can inject $300 million per annum in to our economy and use up to 2000 MW of wind power.

Solar Powered Roofs:  Minnesota has more potential for solar power than New York and Boston due to a large number of sunny days year round. If only 25 percent of homes had solar panels installed, they would represent 10 percent of Minnesota's electricity generation capacity. The benefits from the installation process, if spread over 10 years, could easily produce over $500 million per year.   

Electric Cars in Minnesota: Minnesota is surprisingly well positioned to become a leader in mass market electric cars. Minnesota possesses two key skill sets: existing car manufacturing (Ford Plant) and a broad supply of electrical and electronic engineers from the MedTech and automation industry clusters. The mass market car industry is undergoing a disruptive change on which Minnesota could capitalize. The prize is very big. Even one percent of the US car market is $3 to $4 billion per annum in sales.  

Heat Pumps:  Heat pumps are the most efficient way of heating homes, and they can do it without burning anything. While there is a common misconception that heat pumps don't work in very cold weather, a Minnesota company has been making cold weather heat pumps for over two decades. Installing heat pumps in 25 percent of Minnesota's homes over a 10-year period would generate $700 million per year.

Smart Grid:  According to the American Wind Power Association, Minnesota has about 75,000 MW of wind, but we are currently using only 2.5 percent of the total capacity. Even after all the wind mandates have been fulfilled, Minnesota will be using less than 10 percent of the state's wind capacity. The remaining 90 percent is waiting for a smarter grid with better control and energy storage.  

Green Gasoline from the Farm:  One of Minnesota's greatest natural resources is agricultural waste from corn farming. Most of the corn stover is tilled back into the ground, but it is the single largest, easily available source of biomass. Corn stover can be converted to syngas, which in turn can be converted to gasoline. Minnesota's corn stover can produce 400 to 600 million gallons of gasoline a year. In the foreseeable future this could add $2 to $3 billion annually to our economy.

Suburb to Suburb Bus Transport: Most commuters travel solo. The Twin Cities alone have an estimated 500,000 commuters who commute alone and from suburb to suburb. A specialized bus system would offer these commuters easy transport plus recovery of their commute time. If 25 percent of the commuters used such a system, Minnesota would save 25 million gallons of gasoline. If the commuter bus time was put to productive use, Minnesotans would recover $30 million in wasted labor-hours worth around $1 billion annually.

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