An energy technology company’s decision to open a new manufacturing facility in Pikeville, Kentucky, the heart of Appalachia coal country, has delivered a ray of hope to a region hard-hit by the downturn in U.S. coal production.
The company, EnerBlu Inc., last week officially moved its headquarters from California to Lexington, Kentucky. The company is now turning its attention to building the manufacturing facility in Pikeville — a complex that will be called Energy Innovation Park. The facility, located on the site of the former Marion Branch coal mine, will feature a lithium battery factory.
EnerBlu, previously based in the Los Angeles area, develops battery technology that serves the traditional power grid as well as microgrids. The company also has a division that produces batteries for commercial electric vehicles.
EnerBlu’s decision to open a manufacturing facility in eastern Kentucky marks one of the biggest successes in the region’s attempt to diversify its economy. For several decades, the town, situated in the valleys of eastern Kentucky, has seen its coal jobs vanishing.
When coal production started to decline about 10 years ago, efforts intensified to help unemployed coal workers find other jobs, especially those in the clean energy sector. Attracting new industries would produce new jobs and sustain the tax base of local jurisdictions. Many people viewed Appalachia’s coal region as ideal for a transition away from a fossil fuel economy to one that is more sustainable and equitable.
“Struggling coal mining towns offer an abundance of highly trained workers, many of whom are eager for new opportunities and stable jobs,” Jim Marston, vice president of the Environmental Defense Fund’s clean energy program, wrote Tuesday in a blog post.
Not everyone, though, is waiting for out-of-state companies to move their operations to Appalachia. Dan Conant, founder of Solar Holler, a full-service developer and installer of solar projects in West Virginia, said it doesn’t make sense to wait for outsiders to come in.
“We’re focused on building up a local industry by and for West Virginians,” Conant said Thursday in an interview with ThinkProgress.
Solar Holler provides training for residents of coal communities in southern West Virginia, especially younger people who no longer have the option of getting jobs in the coal industry like their fathers and grandfathers did.
Conant’s company currently has 20 employees that on average install two solar systems per week in West Virginia. They undergo an intensive training program and get their electrical licenses before they go onto roofs to install solar systems. Solar Holler also pays for them to get their associates degree at a local community college.
Solar Holler has focused in particular on recruiting employees from Mingo County, West Virginia, which lost about 40 percent of its jobs between 2012 and 2016 due to mine closures.
The transition away from coal to other industries, however, is going to be gradual. Job training programs have been only modestly successful, especially if there is no demand for the workers’ services after they complete the programs. As a remedy to this issue, Solar Holler makes sure it has enough demand for its solar energy installations before it recruits workers into its training program.
And announcements by companies like EnerBlu are expected to remain infrequent. “For too long, we’ve been hoping for a big company to come in and provide jobs. But you just end up waiting and waiting for that to happen,” Conant said. “We’re focused on building this up locally and doing it ourselves.”
So far, Pikeville’s ability to bounce back has proven to be unique in coal country. Even before EnerBlu announced its plans to build a manufacturing facility in Pikeville, the town was starting to see signs of an economic turnaround. Unlike surrounding Pike County, where the poverty rate is high, the town of Pikeville has witnessed a growth in population.
Pikeville already had gained attention as the home of Bit Source, which trains former coal industry workers in software development. The retrained workers now design and develop websites, tools, games, and apps.
“Appalachia has been exporting coal for a long time,” Justin Hall, the company’s president, said in an interview with IEEE Spectrum in 2017. “Now we want to export code. We’ve got blue-collar coders. It’s the vision of the future of work: How do you train a workforce and adapt it for technology.”
In order to attract new industry, Kentucky has been offering tax incentives to companies. EnerBlu, for instance, is eligible to receive up to $30 million in tax incentives from the state to open the new manufacturing plant in eastern Kentucky and its headquarters about 140 miles away in Lexington. Pikeville also proved attractive to EnerBlu for its lower labor costs, land availability, availability of a skilled workforce, and partnerships with local colleges.
The EnerBlu plant will manufacture rechargeable lithium titanate batteries that power transit buses, commercial trucks, military vehicles, and other equipment. Construction is scheduled to start in mid-2018, with the opening in 2020. “The area is rooted in the challenging coal industry, which leads to a population with a strong work ethic, perseverance, loyalty, tenacity, dedication, and broad and transferable skill sets,” EnerBlu said in a recent blog post.
Retraining workers often is a time-consuming and difficult process. According to study by the Hamilton Project, retraining programs must be highly targeted at the workers who will likely benefit. “That means younger workers with some postsecondary education who are motivated to follow through, and who are able and willing to relocate to places with more job opportunities. Many of the unemployed coal miners of Appalachia do not fit those criteria,” a 2016 MIT Technology Review article said.
Based on studies, EnerBlu is expected to remain the exception when it comes to energy technology companies moving their operations to Appalachia. Most of the solar industry is concentrated in California and these businesses are “unlikely to pull up stakes and move their businesses to Appalachia,” according to the MIT Technology Review article.
Nonetheless, local officials in Kentucky are touting EnerBlu’s decision to move its operations to Kentucky. When the company announced its plans last December, U.S. Rep. Hal Rogers (R-KY) described the investment as a big step toward creating “Silicon Holler,” where the economic base is gradually evolving into a center for high-tech manufacturing and renewable energy.
Coal-producing regions of Kentucky and West Virginia have seen the departure of thousands of families who lost high-paying coal mining jobs. Kentucky officials believe EnerBlu’s investment and the startup of other new companies will result in a reverse migration to the eastern part of the state.
Solar Holler, with offices in Shepherdstown and Huntington, West Virginia, also is working to find ways to keep younger people in their hometowns. Thirty years ago, new generations would have gone into the mines. But those jobs don’t exist anymore. “What we are doing is getting them into the solar industry now so that they don’t have to leave home,” Conant said.
West Virginians also have grown tired of seeing their wealth of resources get extracted by out-of-state companies, leaving little behind for them.
“For too long, we’ve been a colony state,” Conant said. “We’ve got this awesome opportunity as the energy world is changing rapidly. We’ve needed this transition for a long time. The natural gas boom and the renewables boom is making it more urgent that the transition happens here.”