What's powering your community?
Welcome to our fourth installment of our new article series, Data for Development. Today, we’re going to discuss the broad categories of energy availability and costs.
Energy availability – both the quantity and the source of that energy – has become a major focus area for corporate location decision-making, especially for energy-intensive industries facing pressure to shift to adopt more sustainable practices.
And, of course, costs are an important factor when it comes to such a critical line item in a company’s operation.
Our series tackles the top location factors as identified by corporate executives and insiders. We compile and visualize the data that can be used to benchmark communities (primarily at the metro level) against each other.
This series is designed to equip economic developers with the awareness, knowledge, and skills to accomplish three things:
- Find the data they need to understand and tell their community’s economic story
- Generate the insights they need to guide economic development decision-making
- Visualize and synthesize these insights so that all stakeholders – economic developers, business executives, site consultants, elected officials, and residents – can work together to support growth
To accomplish these objectives, we’ll use Area Development’s 37th Annual Corporate Survey and 19th Annual Consultant Survey, which ranks 31 location decision factors by importance to corporate executives and site consultants, as our roadmap for this series.
Energy usage in manufacturing
The availability of energy and its costs were among the most important location factors cited by corporate executives and consultants (see figure in the “About our Data for Development series” section above).
Of course, the importance of this factor varies greatly by industry, with manufacturers caring far more about energy than professional services providers, for example. And then, within manufacturing, the importance of energy availability likewise varies greatly based on the type of manufacturing.
Nonetheless, it should be no surprise that energy availability and costs rank high in any location decision. Although energy costs account for a very small sliver of operating costs (see the figure below from an American Council for an Energy-Efficient Economy report), businesses cannot operate without plentiful and affordable energy.
Defining energy availability and costs for our purposes
We cover a range of energy categories in our visualization. We also identify utility providers by metro area to allow for easy comparisons across geographies and providers.
- Energy rates by end use. We use Energy Information Administration (EIA) average rate data for utilities in 2021 covering residential, commercial, and industrial end uses. The utility data is the average for each utility provider in a given state.
- Power generation. We analyze the energy sources for each power plant in a given state and total them by provider to estimate renewables’ share of power generation for each utility.
By power plant
- Plant nameplate capacity. We look at nameplate capacity (MW) by plant from the EIA.
- Renewable energy share of power generation. We look at each plant’s energy sources, categorized between renewables and non-renewables.
- Power generation mix. We use 2021 data from the EPA’s Power Profiler to track the sources for each state’s electricity.
- Energy production. We source 2020 data from the EIA for 11 inputs using standardized measurement in trillion Btus.
We use EIA data from 2021 to measure three figures:
- SAIFI. System Average Interruption Frequency Index is the number of non-momentary electric interruptions (5 minutes or more), per year, that the average customer experienced.
- SAIDI. System Average Interruption Duration Index is the minutes of non-momentary (5 minutes or more) electric interruptions, per year, that the average customer experienced (i.e., how long is the power down?).
- CAIDI. Customer Average Interruption Duration Index is the average number of minutes it takes to restore non-momentary electric interruptions (e.g., how long does it to take to restore power).
In the Tableau visualization below, we compare electricity rates and generation mixes by community and utility. We also include two pop-ups with additional details by power plant and by state.
** Our dashboard visualizations run best on a desktop and have been disabled for mobile. **
About EDai and Located by EDai
EDai helps business leaders and economic developers make better, faster location decisions using advanced analytics. We add value through our self-serve analytics portal, Located by EDai, and tech-enabled consulting.