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Doyle announces $80M renewable energy strategy

Madison, Wis. - Gov. Jim Doyle today proposed a joint public-private initiative to allocate $80 million in state funds for the development of renewable energy programs in Wisconsin.

Doyle said the money - which includes tax credits, low-interest loans, and grants that would come from business development fund allotments and the sale of state bonds - would leverage an additional $370 million in private investment to marshal economic resources around biofuels.

"As I've always said, when it comes to our energy future, we should be more dependent on the Midwest and less dependent on the Mideast," Doyle said.

Doyle could ask for the money in his next budget if he wins the 2006 gubernatorial election against his Republican challenger, U.S. Rep. Mark Green, R-Green Bay, in November. The Legislature would then have to approve the funds.

The fund
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The plan includes the creation of a fund that would make $50 million in loan guarantees and low interest loans available to Wisconsin companies looking to expand production and use of renewable fuels and energy.

Based on results achieved through similar economic development programs operated by the Wisconsin Housing and Economic Development Authority, the Wisconsin Manufacturers Extension Partnership, and others, it is estimated that the fund could spur $100 to $150 million in private sector investment

Leaders from agriculture and forest industries, private utilities, and academic institutions would oversee the administration of the fund.

Tax incentives

The plan also includes a plan to distribute tax credits to gas stations and private fleet operators, such as Schneider National or Ashley Furniture, to invest in E-85 and biodiesel tanks and pumps.

The proposed state tax credit would equal 25 percent of the cost to retrofit or install a new pump up to a maximum credit of $5,000 per pump, explained Matt Canter, a spokesman for Doyle. It is estimated that the initiative could lead to the addition of approximately 400 new pumps, each costing an average of $25,000.

Also, angel and venture capital investors will be able to access tax credits through Act 255 to advance renewable technology. This expansion could generate an additional $20 million in private investment for every $5 million increase in Act 255 tax credits, Doyle's office estimates.

The grant program

Through the Wisconsin Energy Independence Grant Program, the state would provide $20 million in grants for companies and researchers that are developing new technologies to increase renewable fuels and are speeding the commercialization of new renewable fuel and energy technologies.

One $5 million grant would be earmarked to bring the first cellulosic ethanol manufacturer to Wisconsin to build the first plant of its kind in the nation. This plant would be able to process ethanol from woody forest, switchgrass, and timber materials.

Based on information contained in a U.S. Department of Energy cellulosic ethanol grant application, the total project investment would be about $150 million.

That investment would leverage $240 million from private investors, according to an estimate based on the results achieved from the recent $1 million biogrant program and agriculture diversification grants administered by the Wisconsin Department of Agriculture, Trade and Consumer Protection.

Solar testing facility

Doyle kicked off his initiative by presenting $20,000 to Madison Area Technical College to fund start-up costs associated with the development of the Northern Solar Testing and Certification Facility, which will be housed at the college. An additional $100,000 will be allocated for the facility's completion.

Homeowners can receive tax credits and state rebates for installing solar panels, but must first obtain certification by a testing lab to prove the panels are energy efficient. The NSTCF will resolve a backlog of solar panel certifications that has occurred because there is only one other testing lab in the country.

"This testing facility will help clear up that logjam and make our solar manufacturers more competitive," Doyle said.

Bill Beckman, director of UW-Madison College of Engineering's Solar Energy Laboratory, said harnessing solar energy in Wisconsin could alleviate energy demands. He said that with the right devices in place, the energy that falls on the roofs of most houses could be used for electricity or heating the water supply.

Job creation

In July, Doyle announced his declaration of energy independence, setting a goal for the state to generate 25 percent of electricity and 25 percent of transportation fuel from renewable sources by 2025.

"It calls for us to build a good part of our economy around this effort in renewable energy," Doyle said.

The initiative would push Wisconsin to capture 10 percent of the market share for the production of renewable energy sources by 2030. Achieving this goal would bring $13.5 billion annually and 17,000 high-paying energy and fuel jobs into Wisconsin's economy by 2030, according to Doyle.

The job creation estimate is based on information from the Minnesota Department of Agriculture and the Wisconsin Department of Administration - Division of Energy.

According to a 2001 report, 13.7 million megawatt hours of renewable energy will generate up to 6,000 jobs, depending on the mix of renewable technologies used to generate the electricity.

Additionally, an estimate from the Minnesota Department of Administration indicates that approximately 12 jobs are needed per million gallons of renewable fuel produced. By extension, producing 920 million gallons in Wisconsin could be expected to generate 11,000 jobs.

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