Economist gauges impact of renewable energy

Professor Russell WilliamsRussell Williams, associate professor of economics, ventured into new territory during his spring 2011 sabbatical, serving as lead economist on a study of the economic impact of renewable energy projects on rural areas. The work, examining nine projects in seven states, comprised the U.S. component of an international study sponsored by the Organization for Economic Cooperation and Development (OECD). Based in Paris, the OECD is a 34-nation consortium that seeks solutions to shared economic and social problems. Senior writer Hannah Benoit talked with Professor Williams about his recent work.

How did this project come about?

The OECD realized that a number of countries were involved in renewable energy efforts, but they didn’t know the current state of the technologies, or the economic impacts. For example, are solar or wind power technologies approaching a point where they can be adopted widely, and significantly benefit rural areas? How useful is the pursuit of renewable energy as a strategy to improve rural economic well-being? OECD decided to sponsor studies of renewable energy projects in several countries. In the U.S., the initiative fell under the Department of Agriculture, which was particularly interested in proposals from firms that were women owned or minority owned, which provided an opportunity for new firms to break into this field.

How did you get involved?

My brother Percy is an attorney and a consultant for a firm called Driven Engineering, in Mobile, Alabama, a woman-owned firm that does civil engineering work. Shortly before Thanksgiving 2010, Percy called me and said, “I think this would be a fun project to do together while you’re on sabbatical. What do you think?” I decided to join as lead economist, and by early January Driven Engineering had been selected to do the project, we were beginning to review background material, and we were already traveling to D.C. to meet with the USDA. We began to put together a small team of consultants to work with us. Percy and I directed the research and wrote all nine reports.

What attracted you personally? 

I’ve had a long interest in renewable energy, dating back to a college course in ecology, which built my awareness of the interaction between humans and the environment. This project was an opportunity for me to pick up my interest in the interaction between the sciences and the social sciences, particularly economics—and to explore projects that were on the cutting edge.

What did you study?

We looked at projects involving cellulosic ethanol, land-based wind power and ocean-based wind power, among others, examining feasibility and profitability issues for the initiatives, but also examining how these projects might help rural areas.

Can you give some examples?

We studied an anaerobic digester on a dairy farm in Vermont. Anaerobic digesters use manure, in this case cow manure, to produce electricity. This technology—called “cow power”—has a lot of benefits, one of which is that the farms don’t need to buy electricity from other sources. In fact, they generate so much that they can sell some of the electricity back to the electrical companies. It also reduces the odor on farms, and you don’t have the runoff of manure, possibly into streams. The digesters do not generate many new jobs, but they have a tremendous impact on the profitability of farms. Another interesting project was in Maine, a state that has high costs for electricity and heavy dependency on home heating oil. By the year 2030, Maine wants to produce 5,000 megawatts of electricity through deep-sea offshore wind power. Right now, there are no deep-sea wind farms anywhere in the world, so Maine has the challenge of creating the technology as it goes along. So, they formed the DeepCwind Consortium, a research partnership between colleges and universities, government agencies, nonprofit organizations and private-sector companies in the state. About $5 billion leaves Maine each year to purchase fossil fuels. If, instead of having that money flow out, they could circulate it within the state, Maine would be much better off economically. This project will create jobs directly, and through increased local spending.

You’re an urban economist. Was this project a big change for you?

Yes and no. I’ve done most of my professional work in urban economics, but I grew up in Orangeburg, South Carolina, a small town in a rural state. My paternal grandfather owned a farm in Maryland, where I spent three summers. My maternal grandfather was the Georgia state agricultural extension agent for “Negro” farmers, in charge of reaching out to black farmers throughout the state. So, I’m no stranger to the rural world, and am familiar with urban and rural issues.

What has happened since your study was completed?

OECD gathered the studies from all of the participating countries and held an international conference in 2012. They recently published a synthesis of the findings, Linking Renewable Energy to Rural Development. This continues to be an exciting field.

How did this study inform your teaching?

As a teacher, I find these projects interesting because they involve the intersection of economic, technological, political and social forces creating the future. Understanding the interplay of these dynamics sheds light on the still-developing world within which our students will live, the careers that will be available to them, and the mix of skills they will need to learn to prepare for coming decades. I have used the projects as examples to illustrate ideas I’ve presented in “Introductory Macroeconomics,” “Labor Economics” and “Urban Economics.”