Lexington, Kentucky Roundtable on Advanced Energy Manufacturing
Recent investments in facilities to produce advanced energy products in Kentucky—such as electric vehicles and batteries, clean steel, and nuclear supply chain components—have accelerated momentum to make Kentucky a central hub for manufacturing in the new energy economy. This roundtable brought together leaders from across the Commonwealth, including companies, economic development agencies, state government, and nonprofits. Participants explored the opportunity for Kentucky to build on this recent investment momentum, and to develop policy solutions and innovative next steps that can help promote new industries and economic development for Kentucky’s communities.
Manufacturing an Advanced Energy Future in Kentucky
Our November 2024 roundtable in Kentucky explored opportunities relating to advanced energy products manufacturing and produced policy recommendations to promote supply chain and workforce development. Topics for discussion included:
- Investing in manufacturing and a domestic supply chain for advanced energy products in Kentucky
- Leveraging Kentucky’s competitive advantages in the advanced energy supply chain
- Promoting community economic development, including infrastructure and workforce development
Learn more about our Regional Roundtable Program.
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Overall Takeaways
- Kentuckians have long supplied the resources and power underpinning the American energy economy and are proud of their legacy of hard work and sacrifice that built the state’s energy and automotive industries. New energy strategies and investments must honor these efforts and preserve the traditions, culture, and dignity of workers and communities.
- Intentional and equitable statewide investment in community infrastructure and economic development is central to Kentucky’s ability to continue to attract private sector investment, build out new facilities, support a local, highly skilled workforce, attract and retain companies and workers, promote resiliency to extreme weather, and ensure positive health and livelihood outcomes for all Kentuckians.
- Companies are driving the development of clean energy generation, as their sustainability and energy procurement targets encourage new and existing facilities to use greater shares of renewable power. States that are best able to affordably accommodate these needs will be the most competitive in attracting and retaining new facilities.
- Recent federal investments, including funding and tax credits through the Inflation Reduction Act of 2022, have had a significant positive impact on the economics of advanced energy projects in Kentucky, especially in energy communities (which include most of Kentucky’s counties). Federal incentives may be the tipping point for making a project economically feasible in communities across Kentucky.
- Opportunities in Kentucky include production of sustainable aviation fuel, production and utilization of clean hydrogen in collaboration with the Appalachian Regional Clean Hydrogen Hub (ARCH2), production of high-demand inputs for nuclear power generation, and minerals reprocessing to supply critical minerals.
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Domestic and global market competitiveness
- Demand for advanced energy technology and production—such as electric vehicles and batteries, solar panels and wind turbines, clean hydrogen, electrolyzers, heat pumps, and other kinds of low-carbon technologies—continues to accelerate rapidly both globally and domestically. If Kentucky-made products and industries are going to be globally competitive, they will need to integrate advanced energy solutions into their operations.
- Many major companies have carbon neutrality and sustainability targets across their global operations, which drive investment decisions to places that can best facilitate access to low-cost renewable power and sustainable production processes.
- Of the $40 billion of manufactured goods produced in Kentucky annually, $11 billion is exported to Europe, which has recently imposed strong limits on the embodied carbon allowed in certain imported goods. To remain competitive as an exporter, Kentucky must enable access to energy and production processes that support the competitiveness of its companies in European markets.
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Manufacturing infrastructure and logistics
- Kentucky’s central location creates an advantage in supplying inputs and finished products to major markets across most of the United States; access to multi-modal transportation corridors including rail, maritime, and highways can help products reach demand centers elsewhere.
- Sites surrounding current and retired coal plants are rich in physical and human capital that can make them attractive to other advanced energy industries, such as a skilled workforce, electric sector infrastructure (i.e., transmission lines and substations), and rail and maritime transport access. By investing in brownfield cleanup, revitalization, and infrastructure development, at a retired coal plant, for example, companies can save money by utilizing existing energy infrastructure while also developing on a site and in a community accustomed to industrial project development.
- In addition to the coal industry, Kentucky has been a hub for the manufacturing of vehicles and parts throughout the automotive supply chain, as well as other heavy industries. These assets are directly applicable to new industries. Kentucky’s communities and workers have the expertise, infrastructure, supply chain networks, and other core competencies to help them lead in the manufacture of advanced energy products.
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Workforce and skills development
- As new facilities produce thousands of jobs in construction and operations, Kentucky now faces a tight labor market with fewer qualified candidates than job openings. This gap can be filled by recruiting workers from other states, as well as recruiting from groups that may experience higher barriers to entry to the workforce, such as veterans, formerly incarcerated workers, and workers with disabilities.
- Additionally, community leaders, state government, academic institutions, and employers must promote ways to retain workers educated in Kentucky, to ensure Kentuckians feel they can continue to live in their home state and to ensure that enough skilled workers remain in the state.
- Workers need more than wages and skills training—companies and local governments must also facilitate access to jobs by expanding access to wraparound services like childcare, broadband, transportation, opioid abuse prevention and treatment, and housing to develop communities that workers want to move to and stay in.
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Community infrastructure
- Appalachian states, including Kentucky, have a regional identity rooted in a deep history of production for the coal and automotive industries. Efforts to promote community development in this region must respectfully acknowledge and build upon this regional identity rather than trying to combat it.
- Community economic development research and planning must utilize participatory action and bring in communities and workers from the very beginning. This can build buy-in among communities and ensure research and planning efforts are reflective of conditions on the ground.
- Due to the geographic distribution of Kentucky’s population, and the rural nature of many counties, new facilities may create a significant need for jobs in regions geographically removed from where there are greater concentrations of job seekers. Additional transportation infrastructure, particularly highway and rail infrastructure, is crucial to enabling these job seekers to reach sites with employment opportunities.
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Entrepreneurship and Innovation
- Investing in an entrepreneurship and startup-friendly innovation ecosystem across Kentucky could create jobs while helping the state become a key player in the advanced energy economy.
- Regional investment must transcend county boundaries in Kentucky to promote collaboration rather than forcing competition between counties that stretches resources and stifles innovation.
Explore the full discussion summary
The following are policy recommendations developed directly by participants through an interactive workshop during the roundtable.
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Promote the global competitiveness of Kentucky-made products
- To support Kentucky’s global competitiveness in sustainable product/material manufacturing, the Kentucky General Assembly should dedicate resources to establish an interstate regional coalition across the southeast Ohio River Valley and Appalachia focused on transportation, manufacturing, and energy supply.
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Build, expand, and/or retool infrastructure to support access to the new energy economy
- To address the need for greater coordination between state, local, and federal government entities on energy infrastructure buildout, Congress should pass legislation to mandate the U.S. Economic Development Administration (EDA) to establish a federal Office of Community Prosperity for Underserved Communities, with offices in all 50 states, as conduits for state, local, federal, and industry. The Kentucky General Assembly should pass enabling legislation to support the development of a corresponding office at the state level
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Promote workforce development for advanced energy manufacturing in Kentucky
- To increase access to and utilization of workforce development opportunities, the Kentucky General Assembly should fund the creation of a comprehensive online database of workforce development resources and opportunities for area development districts, local governments, and local communities across the state.
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Develop the innovation ecosystem for advanced energy in Kentucky
- To equitably and transparently strengthen the innovation ecosystem in Kentucky, and across the country, Congress should establish a public/private partnership supporting a national Innovation & Entrepreneurship program that drives a graduated K-12 experiential learning program.
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Accelerate the development of the nuclear energy supply chain in Kentucky
- To demonstrate the opportunity for Kentucky to manufacture parts for the existing U.S. nuclear fleet, the Kentucky General Assembly should fund a study to identify the parts and qualifications necessary to expand production in Kentucky. This should include determining a new line within an existing facility, a certification to enable the production of pumps, pipes and valves, and qualifications.
In Kentucky, advanced energy and economic development go hand in hand
As global markets increasingly demand low-carbon and advanced energy products, Kentucky faces an opportunity to leverage its competencies and skilled workforce to become a hub for advanced energy manufacturing. In this blog, C2ES Senior Manager for Regional Programs Stephanie Gagnon digs into some of these recent investments and shares insights from our Lexington Roundtable.
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