In November, our Regional Roundtable program team traveled to Lexington, Kentucky for a conversation on Manufacturing an Advanced Energy Future in Kentucky. Why the Bluegrass state? Over the last four years, Kentucky has seen a boom in announcements of new facilities to produce batteries and electric vehicles, as well as inputs throughout the advanced energy supply chain like steel for offshore wind monopiles, battery components, and critical minerals recycling. These new facilities will bring thousands of jobs to communities across the state, while helping to build out an American-made supply chain for advanced energy products.
Kentucky’s workers and industries helped build the American energy industry–for more than a century, the state has been a top producer of coal. However, as global demand for advanced energy products like renewables, electric vehicles, and lower-carbon industrial goods has skyrocketed in recent decades, new opportunities for the same communities and workers that were the backbone of the American coal industry may now place them at the center of the new American energy economy.
At our roundtable in Lexington, we heard from leaders representing companies, state and local government, utilities, economic development agencies, academic institutions, and others across the state about what this opportunity looks like in Kentucky and how additional, targeted investment can help ensure communities reap the benefits of the advanced energy economy.
Across the event, several key themes emerged:
Companies are driving the transition to more sustainable products and energy sources.
As participants in a global market that increasingly values environmental sustainability, companies are some of the loudest voices calling for greater access to renewable energy, lower-carbon industrial processes, and more robust clean energy supply chains. Because of companies’ internal emissions reduction targets, some of the key considerations when they site new facilities include whether they will be able to source renewable power—and the sites that can enable this access are the most attractive.
Federal incentives are catalyzing clean energy investments in Kentucky’s communities.
Federal grants and loans have helped major investments like Ascend Elements’ planned $1 billion “Apex” facility in Hopkinsville, which received $480 million in matching funds through the Bipartisan Infrastructure Law. The facility is projected to create more than 400 jobs and will recycle lithium-ion batteries into enough new materials to power more than 250,000 electric vehicles per year. Nearby, Wieland Copper Recycling’s Shelbyville recycling facility received a $270 million grant through the Industrial Demonstration Program that will enable it to expand, create an additional 200 local jobs, and grow American copper production capacity. In both cases, the initial federal funds have catalyzed private sector investment, doubling the impact of the grant.
In addition to direct investment in projects, tax credits are helping to flip the switch on the economics of advanced energy manufacturing in Kentucky. We heard from participants that credits supporting advanced manufacturing, as well as incentivizing products made in America, have driven billions of dollars of investment. One such example is Ford Motor Co. and SK Innovation’s $6 billion BlueOval SK EV battery plant coming to Hardin County. The plant will employ 5,000 workers and serve as a hub for Kentucky-made batteries to power Ford’s electric vehicles.
These tax credits have another bonus for many Kentucky communities deploying advanced energy projects like solar and wind, with an additional 10 percent of the credit’s value added if they are built in Energy Communities (that is, communities with high concentrations of coal-dependent jobs). In an area with historically low electricity prices, this bonus can be the deciding factor in a project’s near-term profitability. As we heard from participants, this bonus is a major driver in companies’ interest in investing in new advanced energy generation projects across Kentucky’s counties; more than 80 percent of which qualify for this bonus credit.
Community and workforce development are central to people’s ability to access these new opportunities.
Roundtable participants pointed out that, unless individuals are able to meaningfully share in the benefits of these new investments in Kentucky’s economy directly, these new projects aren’t going to measurably improve the communities that will host them. We heard a lot about the need to invest in workforce development and training, both for mid-career workers and for young people entering the field for the first time, to make sure local workers are ready to fill the many jobs coming to their region.
Efforts are underway to begin mapping advanced manufacturing jobs to the skills students need to develop in K-12 and postsecondary education programs, and participants were excited about opportunities to scale these efforts and increase investments in programs that help students develop transferrable skills that can help them succeed in continuously evolving advanced energy industries.
In addition to workforce development, participants also discussed the need for investment in community infrastructure to help communities attract new companies and then access new facilities. This could include efforts like redeveloping shuttered coal plant sites to be ready for new development or investing in transportation networks like highways and public transport. Participants also recommended investing in housing and childcare access, particularly in rural communities where limited access to these services can severely impact the ability of workers to participate in the local workforce, and the community’s attractiveness to prospective residents
On the whole, the conversation in Kentucky was optimistic, and we left feeling inspired by the state’s new opportunities ahead and the drive of the folks in the room to take advantage of them. As part of the event, C2ES facilitated a policy design exercise, where participants developed recommendations that can begin addressing some of the needs raised in these key themes. These will be included in our forthcoming discussion summary and policy brief – watch this space for updates!