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NORTH CAROLINA
From Site Selection magazine, September 2010
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Power Play

Energy industry jobs are the ‘North Star’ of a Charlotte-area
sector-building initiative. It’s working.

by MARK AREND
M
Cincinnati-based Fifth Third Bank has moved 250 employees into its new North Carolina headquarters at 201 North Tryon Street in Uptown Charlotte. The building is now known as Fifth Third Center. The bank occupies 71,000 sq. ft. (6,600 sq. m.) of space in the building and has room to expand. The move is part of the bank’s plan to grow aggressively in the state in the next three years.
Cincinnati-based Fifth Third Bank has moved 250 employees into its new North Carolina headquarters at 201 North Tryon Street in Uptown Charlotte. The building is now known as Fifth Third Center. The bank occupies 71,000 sq. ft. (6,600 sq. m.) of space in the building and has room to expand. The move is part of the bank’s plan to grow aggressively in the state in the next three years.
Image courtesy of Charlotte Center City Partners

ove over, banking. The Charlotte region's energy sector is on a roll, coalescing into an economic force with a critical mass large enough to attract new players of all sizes. From alternative energy start-ups to multinationals working on nuclear energy projects, the sector has been logging about 1,000 new jobs annually since 2007, bringing energy-related employment to about 24,000.

Banking and financial services remains a signature industry for Charlotte. Bank of America'sheadquarters is gaining a 32-story, 700,000-sq.-ft. (65,000-sq.-m.) office tower that will be LEED Gold certified. And Citgo Fund Services (USA) Inc., a global hedge fund administrator, is investing US$3 million in Mecklenburg County to open an office that will employ more than 250 with an average salary north of $78,000 per year. William Keunen, the company's divisional director, cited Charlotte's "vast financial industry and infrastructure" as a key location factor.

But the region's energy infrastructure is no less vast, and it extends well beyond Charlotte city limits and even state lines. The entire Southeast is an energy powerhouse, and a move is afoot to brand Charlotte as its base. In fact, an initiative was launched by Duke Energy and Piedmont Natural Gas in April 2009 to put flesh on the many bones of the Charlotte area's energy infrastructure by forming a coalition of energy companies, utilities and economic developers united in making "Charlotte: The New Energy Capital." To their credit, Duke Energy and Piedmont merely got the ball rolling; the initiative, under the auspices of the Charlotte Regional Partnership (CRP), is run day-to-day by Scott Carlberg, an energy industry veteran and principal of Talking Points LLC, a public affairs and project management firm.

"We have a dual strategy of talking to people outside the region as well as within about what we are, because this is about something that existed but had not yet been defined," says Carlberg. Even 10 years ago, people in the 16-county region thought of the energy industry as being Duke Power and Piedmont, he relates. "Now, they talk about those companies as well as Areva, Shaw Power Group, Fluor, URS, Celgard, FMC Lithium and many others. We've helped redefine what energy is, and we have evolved our New Energy Capital presence with the way the definition of energy is changing. That's a real key of our success. We didn't limit our scope, but we also are not outrunning our headlights in terms of what [energy] means. If we did that, it would become so abstract we would lose credibility."

Bottom Line: Paychecks

CRP research has identified 248 energy or energy-related companies in the Charlotte region employing more than 24,000 people. "Paychecks are the basis of economic development," says Carlberg.

George Baldwin, managing director, Legislative and Community Affairs, at Piedmont Natural gas, puts it this way: "Our strength is that the Charlotte Region has aggressively defined a diversified and strategic approach to what a positive energy future can look like. We see the industry as a mosaic of business, education, research, government and nonprofits who, in our region, all pull in the same economic development direction. We help our differences mesh, and that translates into a durable fabric of success."

More than 125 energy industry representatives attended the first New Energy Capital gathering — as did Gov. Beverly Perdue — in April 2009. In April 2010, an Energy Summit organized by the Charlotte Business Journal, called Energy Inc., featured a panel with the top executives of Siemens Energy, Areva U.S. and the power companies. Senators Richard Burr and Lindsey Graham, of North Carolina and South Carolina, respectively, also were present, giving the initiative, in Carlberg's words, "credibility concurrence." About 360 people attended that event.

Where does the initiative go from here? The Charlotte: New Energy Capital initiative includes task forces charged with formulating regional energy policy in work-force development, technology development, business development and public policy. Several dozen people lend their expertise to these efforts regularly, says Carlberg. Another goal of the initiative is to develop the privately funded ReVenture Energy Park on a 667-acre (270-hectare) Superfund site — it would be the first such site to be de-listed from the Superfund inventory in North Carolina — complete with biomass plant, solar array, a light manufacturing zone dedicated to energy businesses and a Charlotte-Mecklenburg waste-water treatment plant.

The project could create up to 1,000 jobs, says Carlberg, who also is facilitating the start-up of the Energy Production and Infrastructure Center (EPIC) at the University of North Carolina at Charlotte. The university has one of the fastest-growing engineering schools in the U.S., says Carlberg. A state-funded facility, EPIC is to be run by a combination of academic and energy-industry practitioners. "We have the companies here. This is about making sure we have the work force, too," he explains, stressing the importance of the regional community colleges and other universities, as well.

"Our North Star is paychecks," says Carlberg. "Anything we do is about ample, well-trained, stable energy employment. Energy is a long-term issue, regardless of the price fluctuations people may see in some commodities.

"Energy headlines have been with us since 1979," he adds. "It's a constant topic." Just as broadband capability is now considered an essential area asset, which was not the case a decade ago, reliable and affordable energy is high on the check list of today's site selectors. "We are going to help provide stable, ample energy, but we are also going to export our skills and products worldwide, rescuing dollars and bringing them back to the Charlotte region in the process," says Carlberg. A case in point, he illustrates, is nuclear energy, for which Charlotte serves as a hub. "We have people traveling all over the world on design, engineering and maintenance of nuclear facilities, and we are extending that work to other kinds of energy."

URS' Nuclear Option

One such traveler is James L. Little, senior vice president, nuclear energy programs, at URS Corp., based in nearby Rock Hill, S.C. In mid-July, Little spoke with Site Selection shortly after returning to the Charlotte area from London, U.K.

Forty percent of the U.S. population will live in the Southeast U.S. by 2030, Little observes, so the Charlotte region is well situated to serve as an energy hub for the region now and in the future. "The Carolinas have a robust nuclear energy industry to start with, and this is the consensus place to be," says Little, a 37-year veteran of the nuclear energy industry. "It's the greatest concentration in the United States, and frankly, it's why we moved our nuclear operations headquarters here two years ago." But it's about more than a pre-existing nuclear energy base, says Little.

The broader energy industry, including numerous alternative energy companies, the education component with UNC Charlotte's EPIC facility (Little is a board member there) and other infrastructure and the involvement of the public sector in building the energy sector are a powerful combination, says Little.

"The other dimensions that add to that in terms of attracting and retaining employees are the quality of life, the cost of living and the education systems," he says. "And it's an international city with air links to Europe and Asia."

On the Cusp

Is the Charlotte region an energy cluster or not? Technically, it is. It just may not be recognized as such by those outside the area or the industry.

"In a sense, it's a cluster, but now we have to make it real," says Little. "That's what this initiative is all about. We have to brand this energy capability, which requires involvement from education, government policy, suppliers and others. Ultimately," he says, "it's about jobs and the economy. A nuclear power plant takes 4,000 people to build, it's a $5-billion investment, but it employs people. Once it's built, it employs staff with a $45-million payroll across all economic levels, not just engineers. And it's a very stable energy source that is not dependent on hurricanes or accidents in the Gulf or global warming and so on. The economic opportunities that energy provides — batteries, solar and others — are huge. It's like stepping out of the Industrial Revolution days and exploiting resources to generate growth and move forward. Charlotte is ideally positioned to take advantage of that, because we're making the connections. You can have the pieces, but you have to make the connections. The energy initiative gives people throughout the energy sector a common vision and a common reason to be here."

URS employs about 200 in the Charlotte area but is ramping up by virtue of work it is beginning with Mitsubishi on a nuclear power plant for Dominion Virginia Power as well as a project in Texas. It's also expanding to service nuclear projects closer to Charlotte — 52 percent of South Carolina's power is nuclear, notes Little, which is more than North Carolina or Tennessee.

'Region of Excellence' For a Battery Supplier

Celgard LLC, a wholly owned subsidiary of Polypore International, is also expanding in Charlotte. The company, a global supplier of microporous separators used in lithium-ion batteries, is headquartered in Charlotte. It announced earlier this year a new manufacturing site in nearby Concord, N.C. The expansion is expected to create more than 200 jobs in the state and generate about 1,000 more at Celgard contractors and suppliers. Celgard plans a 150,000-sq.-ft. (14,000-sq.-m.) facility in Concord's International Business Park for new separator production capacity to support increased demand in the electric drive vehicle market.

"There were many factors that impacted the decision to locate a second facility here, including the availability of a quality work force and opportunities to work with regional academic and federal labs," says Mitch Pulwer, vice president and general manager. "The Charlotte region has great assets in each of these categories. We also had the proximity of the existing Charlotte Celgard facility to consider — the new site in Concord is about 45 minutes by car, hopefully EV or PHEV in the near future. Finally, the level of interest and support at the state and local level for green energy business and jobs was extremely high. Other locations in the Southeast were investigated and some of these could have been good choices, but they did not match the Charlotte region's assets in the final calculation."

Part of that calculation, says Pulwer, is the area's many energy players and resources, particularly in Celgard's niche. "Charlotte has other major commercial participants in the lithium battery industry," he explains, "and several regional university and federal labs have great capabilities in lithium battery research and development. Celgard has working relationships with many of these labs and in fact, graduates of local universities are employees at the company. So, for lithium battery work, Charlotte is a region of excellence in the U.S.

"At the same time," he continues, "there are an overwhelming number of companies in Charlotte participating in the other areas of energy work, such as Duke Energy, Areva, Siemens Energy and Toshiba, just to name a few. This means the region has the breadth and the critical mass to be attractive to people who want to work in energy, in the same way it is attractive to people who want to work in the banking industry."

Capital in the Monetary Sense, Too

Smaller players have a role in the region's energy cluster, as well.

Greenfield Power, for example, is a small shop developing solar-power and biomass energy systems that Tom Kepper, president, says "make sense in North Carolina."

Utilities in North Carolina must produce 12.5 percent of their electricity from renewable resources by 2021, and some are now purchasing electricity from Greenfield Power sites. The benefits of the New Energy Capital initiative to young enterprises like Kepper's include the rich networking opportunities with other regional power sector participants and access to such suppliers as solar panel manufacturers, engineering firms, contracting firms and others. "All we're missing is an inverter manufacturer, but there are some people talking about doing that," says Kepper.

"Charlotte is still a financial hub," he says, adding that Greenfield and others need to be able to finance their projects appropriately. "Next to New York, this is one of the best places to be in terms of access to capital. That's part of the secret sauce of being here in North Carolina."

Kepper is all for identifying the nuclear energy industry in the Charlotte region as a "cluster" but is hesitant to apply the term to the broader energy sector right now. "In the renewable space, it's starting to form, and the rest of the energy industry here is well on its way to being a true cluster."

Kepper says he "picked Charlotte intentionally" for the location in which to grow Greenfield Power after working on the West Coast doing site-selection work for Intel Corp. "Quality of life, access to capital and an ample supply of large companies headquartered here" are among the key reasons he chose Charlotte over other Southeastern metros. "I looked very hard at Atlanta before moving back East, and it was a little bigger than what we were looking for. It's a great city, but we have the sports amenities and theatres and museums in Charlotte, too."

Adding to the mix was North Carolina's commitment to renewable energy on the state legislative level, says Kepper. "I will tell you that the City of Charlotte and some elected officials are in the process of taking that to the next step. They understand the importance of the energy industry in Charlotte."

The New Energy Capital initiative participants, for their part, are just getting started on their work, including work-force development, which in Mitch Pulwer's view is one of the most important.

"For Charlotte and for Celgard, this mission never ends," he says. "It is also important to have a robust environment where people and companies can take concepts to commercialization quickly. The high-tech companies and investors that can help accelerate the process exist in this region, so ensuring that they come together productively is something that I am sure will get more and more attention in 2011."

Charlotte's energy industry has an increasingly global following. Nuclear Energy Insider, a unit of U.K.-based FC Business Intelligence Ltd., hosted its Nuclear Supply Chain Conference in Charlotte in June 2010, for example.

"We ran this important industry meeting there, because many leading new-build stakeholders have located offices around the city and because of the excellent work the Carolinas Nuclear Cluster is undertaking to ensure the region is a center of excellence for nuclear energy," says James Taylor, head of sector, The Nuclear Energy Insider Team. "We will continue to run our market-leading conferences there as it is clearly the hub for nuclear development in the U.S. and because of the level of support we experienced." For more information on Nuclear Energy Insider, visit www.nuclearenergyinsider.com. The group will also host its 2nd Annual Nuclear Construction Summit in Charlotte in October.


Story in Pictures

James Little, senior vice president, nuclear energy programs, URS Corp.
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