TAEBC releases updated economic impact report for advanced energy sector
By Tom Ballard, Chief Alliance Officer, PYA
It’s been a big week for the Tennessee Advanced Energy Business Council (TAEBC). First, the member-based organization held its “Statewide Energy Incentives and Programs Webinar” on Tuesday (see article that follows this one). Then, TAEBC followed that two-hour event with the release yesterday of its every three-year “Tennessee Advanced Energy Economic Impact Report.”
The latest edition of the report shows that the advanced energy sector in the Volunteer State is outpacing the overall state economy across the board, employing nearly 394,000 Tennesseans in more than 20,300 businesses that contribute almost $46 billion to the state’s gross domestic product (GDP). That’s a significant contribution to the $1.4 trillion global advanced energy market.
Key findings from the 2021 report include:
- Advanced energy is a job-creation engine for Tennessee. The AE economy in Tennessee employed nearly 394,000 workers in 2019—a ten percent increase since the last report—and accounts for nearly 15 percent of all jobs in the state. These jobs were held in over 20,340 establishments, nearly a 12 percent increase since 2016.
- Advanced energy boosts average salaries. AE provides high quality opportunities for Tennesseans, with workers in the sector earning an average wage of $64,000, significantly higher than the state’s economy-wide average of $48,000.
- Advanced energy is a boon for both the state and local economies. Tennessee’s advanced energy sector generates nearly $46 billion in the state GDP, 12.2 percent of total state GDP. Output generated by the overall AE sector grew by 8.2 percent since 2016, a very healthy pace of growth.
- Tennessee’s advanced energy sector is growing faster than the overall state economy by a significant margin. At the state level, growth in employment, payroll spending, and the number of establishments in the AE sector since 2016 has outpaced total growth for the overall Tennessee economy. The AE sector is continuing to expand in Tennessee and is creating more and more opportunities for the business community and state residents.
Those are captured in a graphic provided by TAEBC.
The 2021 report builds on data first analyzed by TAEBC’s 2015 “Economic Impact Report,” which was updated in 2018. The current findings detail the scale and scope of the state’s advanced energy sector, quantify its vast economic impact, and chart the trends in advanced energy since the 2015 baseline study was released. It identifies the number of jobs and businesses associated with advanced energy, as well as calculating the sector’s contributions to state GDP and state/local taxes.
Research for the just-issued report was conducted by the Howard Baker Jr. Center for Public Policy at the University of Tennessee (UT), Knoxville. Funding for the report was provided by UT and the Tennessee Valley Authority.
By TAEBC’s definition, advanced energy is technology-neutral and includes any technology that makes energy or transportation cleaner, safer, more secure, and more efficient. Examples include wind, solar, and new nuclear technologies, electric and plug-in hybrid vehicles, lightweight composites in the automotive industry, natural-gas fueled trucks, bioenergy, pollution-control equipment, smart grids, combined heat and power, high-performance buildings, more efficient industrial technologies, and power reliability. Advanced energy represents a booming market that’s nearly twice the size of the worldwide airline industry and nearly equal to global apparel revenue.
In addition to statewide data, the 2021 report analyzed Tennessee’s advanced energy sector by metro area, including regional information on advanced energy in Nashville, Memphis, Knoxville/Oak Ridge, Chattanooga, Tri-Cities, Clarksville, Morristown, Jackson, and Cleveland. It further tracks Tennessee’s advanced energy economy down to county-specific data. The analysis is based on NAICS code and Census Bureau data from 2019 (i.e., pre-pandemic), the most recent year for which this information is available.
The Nashville metro area is the largest contributor to Tennessee’s advanced energy sector, accounting for 30.5 percent of state AE employment. The Memphis metro area comes in second, with over 55,000 workers in advanced energy and healthy growth (7.4 percent) in the number of AE establishments doing business. Even with these concentrations in urban areas, advanced energy reaches all 95 counties in Tennessee because the sector is a cluster of diverse industries with strong growth potential not tethered to urban areas alone.
For the sponsors of the report, the findings reinforced their organization’s respective strategies and priorities.
“Today’s businesses choose locations served by dependable and environmentally conscious power companies that, like TVA, can help them achieve their sustainability goals,” said Joe Hoagland, TVA Vice President for Innovation and Research. “We are supporting their targets and the future of the Valley by innovating with advanced energy solutions. Highly reliable, low-carbon and low-cost power creates a compelling competitive economic advantage.”
“The University of Tennessee is proud to play a significant role in the advanced energy economy in the state and isn’t surprised to see the impressive growth this sector has made over the last several years,” said Stacey Patterson, UT Vice President for Research, Outreach and Economic Development. “This vibrant global market aligns with the skills we engender at UT, such as conducting essential R&D, forging lasting private-public partnerships, creating a pipeline of world-leading talent, and supporting burgeoning and established entrepreneurs and innovators. The gains being made by advanced energy will continue to boost Tennessee’s economy and set the state apart as a leader in innovation.”