Published on June 21st, 2013 | by Guest Contributor0
Wind Development As ‘Sustainable Entrepreneurship’
Below is an excellent guest post from researchers at Utah State University’s Jon M. Huntsman School of Business. These researchers have been doing some wonderful work related to “green messaging,” with a special focus on wind power issues. Enjoy the read:
The public discourse about energy in the West often centers on federal government policies and their impact on economic development, land use, and protecting the environment. The issues are complex, but are often simplified into discordant narratives, such as America’s need for “energy independence” and an “all of the above strategy” to “drill, baby, drill” to the “war on coal” and the promise of “green jobs” to the federal government’s “picking losers,” as in the case of Solyndra, a failed solar company that received federal loan guarantees. Such framing of issues into catchphrases and bumper sticker slogans ultimately proves obfuscating and politically divisive, leading to policy gridlock and uncertainty for energy markets and business development.
While federal policies are important issues, make-or-break decisions about energy development are made ultimately at the local community level in the chambers of city councils and town hall meetings. Renewable energies, such as wind, solar, and geothermal technologies, increasingly pose significant, if novel economic opportunities to revitalize Western, rural communities and steer them onto cleaner, more sustainable paths. What’s often left out of public conversations, however, is how private businesses and entrepreneurs might step up and dare to navigate the renewable energy development process, especially in communities that haven’t hosted renewable energy projects before. Our research indicates that it takes vision, perseverance, business and political acumen, and daredevil risk-taking to commit the time, talent, and money necessary to transform renewable energies into viable businesses.
Over a four year period, we witnessed firsthand how an idealistic entrepreneur, Tracy Livingston, and his engineering colleague, Christine Mikell, took on Utah’s utility industry to build the state’s first commercial wind power plant. Their efforts resulted in a small 18.9 megawatt project of nine turbines at the mouth of Spanish Fork Canyon in 2008, sufficient to power over 6,000 homes in the community annually (Hartman et al., 2011). Livingston’s company, Wasatch Wind, had to not only convince skeptical utilities, policymakers, and citizens about the viability of wind energy as a cleaner, more sustainable alternative to Utah’s traditional fossil fuels (coal, natural gas), but also demonstrate how the wind farm would create worthwhile local benefits, including local job creation, lease payments to local landowners, and property tax revenues for community services, such as the funding of schools, libraries, and fire protection (see Hartman et al. 2011). Some tasks were unanticipated and appeared beyond the scope of traditional business entrepreneurship, but reflect renewable energy development’s on-the-ground realities.
Our case research about the Spanish Fork Wind Project has resulted in our publishing numerous academic articles, papers and educational materials as well as our co-producing the award-winning documentary, Wind Uprising (2010), with filmmaker, Michelle Nunez of GreenTech Films. We’ve been presenting our research to stimulate discussion in rural communities across Utah and the West.
An emerging concept called sustainable entrepreneurship provides an informative lens for uncovering insights about how renewable energy development can create a “win-win” for both entrepreneurs and local communities.
Sustainable entrepreneurship is defined as the exploitation of business opportunities to create goods and services that sustain the natural and/or communal environment and provide economic and social gains for others (Patzelt and Shepherd 2011). Whereas traditional entrepreneurship uses finance and business acumen to transform innovations into economic goods (such as new products or technologies) for business gains, by contrast, sustainable entrepreneurship leverages those business skills to transform environmentally-protective innovations (such as renewable energy) into economic and social gains for the entrepreneurs and other relevant groups, such as local host communities.
Patzelt and Shepherd (2011) assert that sustainable entrepreneurs engage in a three-step process to evaluate sustainable business opportunities: (1) recognition of environmental problems and their solutions; (2) evaluation of the market feasibility of those environmental solutions and self-assessment of one’s acumen to implement those solutions as a viable business; and (3) actual implementation of the business and environmental solution. In our interviews for the documentary, Livingston explained to us that in the early 2000s, he recognized Utah’s dependence on coal for electricity and air quality challenges. He also followed ongoing news reports about Utah’s dwindling “economically-viable” coal reserves, and the need for utilities to diversify their electricity portfolios. With a desire to make a “difference in the world,” Livingston believed he could advance wind energy as a viable business in Utah (see Wind Uprising 2010).
Our analysis of Livingston’s and Mikell’s journey identified four key interrelated entrepreneurial sub-tasks or roles that were essential for establishing the Spanish Fork Wind Project. As business entrepreneurs, Livingston and Mikell had to identify locations conducive for a wind project, attract investors, and sell its energy. That, however, was just the beginning.
Livingston and Mikell found that how federal laws were going to be implemented adversely-affected wind development. Consequently, they brought their concerns before regulators to enact change, taking on the task of policy entrepreneurs, defined as individuals or organizations that operate from outside government to establish and promote policy or institutional changes (Weissert, 1991).
Additionally, Livingston and Mikell had to identify and incorporate local community benefits into their wind project to win approval, taking on the role of social entrepreneurs, defined as individuals or organizations that seek to develop opportunities to enhance social gains (Zahra et al., 2009).
Finally, Livingston and Mikell found that it literally “takes a village” to develop a wind project and playing collaborative entrepreneurs, they initiated coalitions and forged networks with other groups and supporters to tap the necessary expertise, resources, and assistance to overcome myriad political, siting, market, and social barriers facing their novel wind project. In short, sustainable entrepreneurship requires engaging successfully in multiple functions, often simultaneously, to bring sustainable innovations to market. It is through this lens that we recount some important milestones of the Spanish Fork Wind Project story to distill important lessons for entrepreneurs, policymakers, and community leaders.