Clean innovation ecosystems: Lifting distressed communities in Appalachia with clean energy

Research question

What factors contribute to lifting distressed communities in a Clean Innovation Ecosystem and have their citizens to flourish?

Research design

Our design aims to combine the research methods of literature review and artifacts. The literature review will provide a critical analysis of existing academic literature, while using artifacts will enhance the depth and richness of the data collection process. Artifacts can provide rich, detailed data that may not be available through other data collection methods. Second, artifacts can validate or confirm data collected through other methods, providing a more robust and reliable dataset. Integrating these two research methods, the study aims to explore the research problem from multiple perspectives and validate the findings through triangulation.¹⁰

Data collection

Data gathering was done by thoroughly researching relevant literature, including scholarly articles, official reports, industry magazines, and the most recent periodicals. This literature review is useful in discovering the present state of the research subject and getting new ideas for potential solutions. Artifacts can be used as a source of data in three ways: as a means of generating data, as a means of verifying data, or as a means of complementing other data sources.¹⁰ Artifacts, whether physical objects like photographs, videos, or documents, or digital media like websites or social media posts, play a pivotal role in our research. They provide crucial contextual information and serve as a strong validation of the findings from other data sources. For instance, photographs and videos offer visual evidence of certain phenomena, while documents and reports provide detailed information and official perspectives. Digital media, such as websites and social media posts, offer real-time data and insights into public opinion and emerging trends.

To support our research, we have prepared a supplementary section with 17 links to websites and digital articles documenting and detailing the emergence of a Clean Innovation Ecosystem in the Greater Appalachian Voltage Valley. This supplementary section serves as a comprehensive resource, offering a wide range of perspectives and up-to-date information on the development of clean innovation in this region. These resources include government reports, industry analyses, academic studies, and news articles, providing a well-rounded view of the subject matter. We have made a conscious effort to include resources from various stakeholders, ensuring a diverse range of perspectives.¹¹

Data analysis

The information collected from the literature review and artifacts is studied with content analysis. This method is utilized to locate patterns and subjects in the data, and then use them to form ideas of where government funds should be invested to establish Clean Innovation Ecosystems.¹²

Findings

The findings of the study encompass a recap of the literature review, artifacts, the results of the content analysis, and the proposals for the maximum and most efficient government investments in forming Clean Innovation Ecosystems.¹³

Conclusion

The study’s conclusion includes a review of the research findings. The conclusion will validate the findings through triangulation, comparing the results from the literature review with the insights derived from the artifacts. We will then review the implications for practice and policy, study limitations, and suggestions for potential future research¹³

Playbook for lifting distressed communities

What factors contribute to lifting distressed communities in a Clean Innovation Ecosystem and have their citizens to flourish? See Figure 2 for a graphic representation.

Figure 2. The factors that explain how to lift distressed communities with RVVBC as a moderator.

Source: Created by the authors based on the research findings presented in the article, may be used without permission. - article citation of F1000 publication is all that is required for use work or paper.

Hypotheses:

Our literature review shows that hypotheses 1–4 have a positive effect on lifting distressed communities. We extend the literature exploring hypothesis 5. The literature and artifacts explain our findings in Hypothesis 5.

The recent phenomenon of Regional Voltage Valley Business Clusters (RVVBC) will act as a moderator, amplifying the effects of Hypotheses 1-4.

To lift distressed communities, the following four items are recommended by literature and our research:

Specific Appalachian university programs

West Virginia University: The university’s National Research Center for Coal and Energy has been actively involved in research related to hydrogen production and utilization. The university also offers a graduate-level certificate program in Alternative Fuels and Vehicle Technologies that covers topics related to hydrogen fuel cell technology.²²

Virginia Tech: The university’s Center for Power Electronics Systems has researched fuel cells, including hydrogen fuel cells, as a potential power source for transportation applications. Additionally, the university offers a course on fuel cells as part of its mechanical engineering curriculum.²³

Ohio University: Russ College of Engineering and Technology research focuses on sustainable energy technologies, including hydrogen fuel cells. The university’s Institute for Sustainable Energy and the Environment has also researched hydrogen production and storage.²⁴ ARC has provided funding to the Voinovich School for Leadership and Public Affairs and to other partners at Ohio University to create two programs to facilitate social entrepreneurism: Social Enterprise Ecosystem (SEE) and one to assist communities with maker spaces and incubators – LIGHTS. The SEE and LIGHTS programs provide no-cost services and access to capital for social entrepreneurs and small businesses in the social sector and early-stage product development.²⁵

Marshall University: The university’s Center for Environmental, Geotechnical and Applied Sciences has researched hydrogen storage and has collaborated with industry partners on the development of hydrogen storage technologies.²⁶

Trade organizations are critical in facilitating communication, collaboration, and workforce development initiatives in the hydrogen hub industry. These organizations have extensive knowledge and experience in the field and can provide a platform for industry professionals to share information and best practices.²⁷

In addition to promoting collaboration and communication, trade organizations also offer specialized training programs and certifications for professionals in the industry. One such organization is the Appalachian Hydrogen and Carbon Capture Center (AHCCC), based in Morgantown, West Virginia. The AHCCC is a non-profit organization that supports the development of hydrogen and carbon capture technologies in the region. It provides a forum for communication and collaboration between industry stakeholders, research institutions, and government agencies, to advance the development of a hydrogen economy in Appalachia.²⁸

Another organization that supports hydrogen hubs in the region is the National Energy Technology Laboratory (NETL), which is also based in Morgantown, West Virginia, and has additional locations in Pennsylvania and Oregon. The NETL conducts research and development related to energy technologies, including hydrogen production and storage, and supports the development of a skilled workforce through education and training programs.²⁹

In addition to these organizations, there are also trade associations at the national level that support the development of hydrogen hubs in Appalachia. The National Hydrogen Association (NHA) and the Fuel Cell and Hydrogen Energy Association (FCHEA) are two such organizations. These associations provide a platform for industry stakeholders to communicate and collaborate on workforce development initiatives, offer specialized training programs and certifications for professionals in the industry, and advocate for policies that support the growth of the hydrogen economy.^30,31

Appalachian social entrepreneurship ecosystem

Ricket et al.³² posit the emergence of an ecosystem that is a convergence of the Social Entrepreneurial Ecosystem (SEE) and Community Sustainability. In this model, social entrepreneurs use their business for good, not just to make a profit but to positively impact the triple bottom line profit—people, planet, and profit. This is a departure from the “urban-centric economic policies [that] have historically used rural areas as “sacrifice zones”: areas environmentally degraded to produce goods (and human capital) necessary to feed, literally and figuratively, urban centers.^33–36 A driving force for this change is investment by government agencies that have set a criterion for the award – there must be a positive socioeconomic effect on distressed communities. Public sector investment rules, combined with a new accountability of the economic development in the private sectors, are pushing the normative business process towards social entrepreneurism.³⁷

A way we have seen social entrepreneurship take hold in other rural areas is the Mondragon Cooperative.³⁸ The Mondragon Cooperative Model³⁹ has over 80,000 people with sales in more than 150 countries. It is a worker-owned cooperative, meaning the employees collectively own and manage the business. The model is named after the town in the Basque country of Spain, where the first cooperative was established. In this model, the employees are the owners and decision-makers of the business. They elect a board of directors, who are responsible for managing the day-to-day operations of the business. The board of directors is accountable to the general assembly, which comprises all the worker-owners.³⁹

The Mondragon Cooperative Model has several distinctive features. One of these is its commitment to social responsibility. The model emphasizes the importance of creating sustainable jobs, promoting social justice, and contributing to the local community.³⁹ Mondragon believes that profitability allows enterprises and ecosystems to afford their chosen values. Mondragon solidarity brings “ordinary people together achieving extraordinary things”.³⁹ Another key feature of the model is its emphasis on education and training. The Mondragon cooperatives have established a network of education and training centers, which provide workers with the skills and knowledge they need to succeed in their jobs and advance within the cooperative.³⁹

Triple bottom line profit and innovation

John Elkington is a sustainability thought leader who introduced the concept of the “triple bottom line,” which considers not just financial profit but also social and environmental impact.⁴⁰ A Clean Innovation Ecosystem is an interconnected network of organizations, individuals, and resources that work together to develop and deploy sustainable solutions to environmental challenges. The triple bottom line profit advises the Clean Innovation Ecosystem and is specific in its approach to solving the existential threat of climate change – deploying sustainable solutions to environmental challenges.⁴⁰ The literature guides many models for successful innovation.⁴¹

To maximize social benefit for federal, state, and local agencies in a Clean Innovation Ecosystem, the success of the Clean Energy Ecosystem is not in a model, but in the execution of the relationships. It is essential to foster collaboration, innovation, and equity while setting clear goals and standards and regularly monitoring progress and adapting strategies as necessary.⁴²

The National Science Foundation suggests that the ’Valley of Death’ for Innovation Hubs is not just a phase, but a critical one. It’s a phase where research funding and public investments cease before commercial success has been established to ensure a sustainable enterprise. The literature suggests that cultivating successful relationships must be intentional and practiced before the Regional CIE (Centers for Innovation Excellence) location receives research funds or resources.⁴³

The innovation ecosystem comprises various actors, entities, and intangible elements. These intangible elements include the complex relationships and interactions that gradually transform the steep, formidable Valley of Death into a more navigable and supportive Challenge Basin, facilitating smoother progress and greater collaboration within the ecosystem.

ESG, Net Zero, and Fortune 500 companies

Investors use environmental, social, and governance criteria to evaluate the societal impact and sustainability of companies. ESG criteria include factors like a company’s carbon footprint, diversity and inclusion policies, employee relations, and ethical business practices. ESG is used to evaluate a company’s short- and long-term risks, which directly affect the company’s stock price and return on shareholder equity.⁴⁴ Net Zero, Fortune 500, and ESG are all related to the growing global concern about sustainability and responsible corporate behavior. The European Union, United Kingdom, and United States are all in the process of developing the mandatory reporting requirements for ESG and expect to have them in place by 2024.⁴⁴

’Net zero’ is a term used to describe a state where the amount of greenhouse gas emissions released into the atmosphere is balanced by the amount removed from the atmosphere. The goal is to achieve this balance by reducing emissions as much as possible and compensating for any remaining emissions through methods like carbon capture and storage or reforestation. In simpler terms, it is like a scale where the weight of emissions on one side equals the weight of emissions removed on the other, resulting in a balance.⁴⁴

Scope 1, 2, and 3, as defined by the World Economic Forum 2022, are terms used to categorize the different sources of greenhouse gas (GHG) emissions from a company or organization. These scopes are defined by the Greenhouse Gas Protocol, which is a widely used international standard for GHG accounting.⁴⁴

To achieve net-zero emissions, companies must first measure and understand their emissions in all three scopes. Then, they must set targets to reduce emissions and develop a plan to achieve them. The plan should include strategies to reduce energy consumption, switch to renewable energy sources, and develop more sustainable supply chains. Companies must also engage with suppliers, customers, and other stakeholders to encourage them to adopt sustainable practices.

In summary, understanding and addressing emissions across all three scopes is essential for companies to achieve net-zero emissions and contribute to global sustainability efforts. The relationship between these concepts is that achieving net-zero emissions requires significant changes in how companies operate. The Fortune 500 companies, as major players in the global economy, have a crucial role in achieving net-zero emissions and sustainable development. Investors are also increasingly interested in companies that prioritize ESG considerations, and those that do are likely to be more successful.

The Intergovernmental Panel on Climate Change (IPCC) has identified 2050 as the deadline for achieving net-zero emissions. To limit global warming to 1.5°C above pre-industrial levels, many countries and companies have set ambitious intermediate targets for 2030 and 2040 to achieve net-zero emissions by 2050. Intel has pledged to achieve net zero by 2040. Companies must lay out their plans and report on their progress to targets.⁴⁴

Greater Central Appalachian Voltage Valley

In an era where the world is facing pressing challenges related to climate change and economic transformation, a shining light is emerging in the heart of America - the Voltage Valley. This region, Greater Central Appalachia encompassing states such as Kentucky, West Virginia, Ohio, Upstate New York, Tennessee, Michigan, and the Central Appalachian communities, is poised to become a driving force behind saving the planet and reinvigorating American manufacturing. Voltage Valley represents a new type of business cluster, one that supports electric vehicle battery plants, data centers driven by artificial intelligence and machine learning, integrated circuit chip manufacturing, recycling facilities, and other large-scale endeavors related to digital transformation and electrification. The Voltage Valley created in the CIE helps pave the way for a more sustainable future.⁴⁵

Figure 3. GCAVV market service area one day freight radius.

Source: Ohio University PORTSfuture Program, funded by a grant from the US Department of Energy Office of Environmental Management Portsmouth/Paducah Project Office. This has been reproduced with permission of Ohio University.

The leading indicator of the Voltage Valley revolution is the surge in manufacturing construction spending. Over the past two decades, the United States has invested between $20 billion to $100 billion annually in manufacturing infrastructure – a yearly average spending of approximately $60 billion annually. As of July 2023, manufacturing annual run rate construction spending has skyrocketed to over $200 billion. Another $600 billion of Voltage Valley projects are in the U.S. as of the third quarter of 2023.⁴⁵

For many years, Silicon Valley on the West Coast of the United States was the epicenter of innovation and wealth creation. It produced groundbreaking solutions and entrepreneurial success stories and ignited the growth of venture capital firms primarily concentrated in the San Francisco Bay Area. However, a significant part of the Silicon Valley success story involved outsourcing manufacturing to countries like China and Asia, which shifted the U.S. economy towards a service-oriented one. Unlike the Silicon Valley era, where most manufacturing jobs were outsourced, Voltage Valleys generated employment opportunities during advanced manufacturing plants’ construction and operation phases. This means jobs for hardworking makers and doers, individuals who build and create the products that drive the digital age.⁴⁵

The story of Voltage Valley is not confined to a specific city; it is a phenomenon occurring in regions that were once at the forefront of the Industrial Revolution, such as Greater Appalachia. As the 21st century unfolds, we are witnessing the birth of a new industrial revolution – GCAVV the Voltage Valley Revolution.⁴⁵

Our case study, as documented by the artifacts, focuses on the Greater Central Appalachian Voltage Valley (GCAVV) forming in Ohio, West Virginia, Kentucky, western Pennsylvania, upstate New York, and parts of Michigan (Figure 3). We have named this region the Greater Central Appalachia Triangle as it spans from Central Appalachia to the Great Lakes of New York, Ohio, and Michigan. The combined GDP of this geography across these six states is approximately $2 trillion, the equivalent of a top 8 country in the world, between Italy (8) and France (7).⁴⁶ Once we have set the economic conditions of the Greater Central Appalachian Voltage Valley, we will discuss the 56 distressed counties in Central Appalachia, situated within the tri-state region of Ohio, West Virginia, and Kentucky. The 13-state region of Appalachia is among the most economically distressed in the country, including 82 distressed counties. As shown in Figure 1, the Appalachian Regional Commission has assigned the “distressed area” designation to many counties; 56 of the 82 counties were identified as distressed areas.⁴⁷

The GCAVV region is experiencing a new industrial revolution centered around integrated circuit chips, electrification, and information mining with artificial intelligence and machine learning as the region transforms into the Greater Appalachian Voltage Valley. The construction of these advanced manufacturing facilities and the long-term jobs created by these factories can potentially grow the defined region’s economy. The actual factory locations are in or around these distressed counties. The government investment criteria to impact distressed communities and this economic surge provides a generational opportunity to lift the people in these geographies. Maximize the social impact of government investment. This is a review of the artifacts we found in our study.⁴⁸

The construction value of the defined region’s new unbuilt Greater Central Appalachian Voltage Valley is more than $50 billion over the next five years for this region. According to the Associated Builders and Contractors, every additional billion dollars spent in a region contributes 6,300 additional construction jobs. Assuming an incremental construction build of $10 billion over the next five years, that is an incremental 63,000 construction workers in the Greater Appalachian Voltage Valley projects.⁴⁹

The General Motors 2.8 million square feet gigacity Ultium battery plant Gigafactory started operation in Lordstown, Ohio, in August 2022. Construction of the GM Gigafactory started in 2020, providing 5,000 construction jobs and over 2,000 operation jobs at the factory. The cost was over $2 billion. Since 2020, in the Greater Appalachian Voltage Valley, there have been many project announcements of similar scope and community benefit—a Ford electric vehicle plant in Avon Lake, Ohio, two Ford EV battery plants in Glendale, Kentucky, Cleveland-Cliffs Steel investments in Toledo, Nucor Steel in Mason County (classified at risk), West Virginia, Honda EV Battery Plant and Innovation Center in Marysville, Ohio, Cirba Solutions lithium battery recycling in Lancaster, Ohio, and Li-Cycle in Rochester, New York. When fully operational, these two plants will recycle enough lithium ion to make over 250,000 EV car batteries. Another example is Hemlock Semiconductor’s silicon refinery in Lansing, Michigan, which will create 170 permanent jobs and supply polysilicon to the semiconductor and solar industries. Integrated chip manufacturers are opening Intel facilities outside of Columbus, Ohio, and Micron facilities located in the greater Syracuse, New York area. The cost of these facilities is $20 billion and $50 billion, respectively.⁵⁰

All the companies establishing their operations in this region are doing so because of access to reliable power and transmission lines. Voltage Valleys need reliable, resilient, and sustainable power to drive advancements in artificial intelligence, blockchain, machine learning, faster IC chips, and robots used in manufacturing, recycling, and product manufacturing that support electrification.⁵¹

Moreover, each of these companies has net-zero carbon goals for 2050 based upon ESG plans. The Greater Central Appalachian Voltage Valley ecosystem presents a unique opportunity for the reshoring of advanced industries. The clustering of advanced manufacturing in this region would allow companies access to sustainable power and clean industrial inputs.⁵²

Rewriting the manufacturing playbook for the 21st century

One of the most vital assets of Central Appalachia is its people; they are “makers” and possess the know-how and the “can-do” spirit needed to manufacture products at scale.⁵³ The makers and the region’s already strong manufacturing base and growing Voltage Valley business cluster provide an excellent foundation upon which to make American manufacturing great again. Advanced manufacturing also requires access to trains, ports, feedstocks, and water. These needs are precisely why the Ohio River Valley has historically been a manufacturing powerhouse.⁵⁴

We anticipate high-value, energy-intensive manufacturers making sizeable investments in the Greater Appalachian Voltage Valley to keep up with market demands. The development of these new facilities will require the production of silicon, polymer, and glass inputs essential for the booming electric vehicle, semiconductor, and photovoltaic industries in the area. Fortunately, the Ohio River Valley has the proven ability to take on large energy-intensive projects, and it possesses many assets that can be utilized. In solar manufacturing, Illuminate USA announced a $600 million project to establish a solar panel manufacturing factory in Pataskala, Ohio. The development is expected to create 850 jobs in March of 2023.⁵⁵

When the Piketon Gaseous Diffusion plant opened in 1952, it consumed 5% of all electricity consumption in the United States. At its peak, it used up to 40 million gallons of water each day for cooling. After a decade of inactivity, the Department of Energy decommissioned the facility in 2011. For the first stage of recommissioning, 248 acres of the site will be revitalized by Trillium H2 Power.⁵⁶

This $1.5 billion endeavor includes 250 megawatts of power generation capacity and carbon sequestration. The power plant provides 500 metric tons of clean hydrogen daily, which will be utilized for the primary production of silicon and green ammonia, as well as powering a 65-acre greenhouse farm with the waste heat from the power plant.⁵⁶

The building and operation of these facilities will require the use of a digital twin as well as project teams that use human-machine collaboration. The Trillium integrated manufacturing facility in Piketon, Ohio, intends to use a digital twin to design, build, and operate the facility. The way it will work is that the architects and designers create a 3D model of the Piketon project – the digital twin. This requires the participants in the project to collaborate and the digital model - Human-machine collaboration. As the participants go through the process of human-machine collaboration, the region’s digital capability grows.⁵⁶

In our interviews with Trillium H2 Power officials, they are looking at the Mondragon system of operation and a citizen share model. The farm’s production will be owned by the individuals who work at the co-op. The coop will target the sale of the garden’s fresh vegetables in the local community. The coop sells the surplus in the surrounding cities if there is an incremental product. In the Mondragon model, profit is good; this cooperative wants to take it a step further, creating a citizen share. A citizen share would be 15% of the profits distributed to the employee’s non-profit of choice.⁵⁶

In the hills of Kentucky, the world’s most invaluable fossil fuel deposits are not too far away. Kentucky’s Blue Gem Coal seam contains ultra-low sulfur coking coal, which is highly sought after by semiconductor manufacturers. This feedstock is mixed with raw silica and put into arc furnaces to make 99.9% pure silicon for semiconductor production. Ferro’s global arrangement to supply silicon from its Beverly, Ohio, foundry to the Renewable Energy Corporation (REC) plant in Montana speaks to the length’s companies are willing to go to get premium feedstocks.⁵⁷

Hemlock Semiconductor is investing $375 million in a silicon refinery in Lansing, Michigan. Currently, the United States produces 310,000 metric tons of metallurgical grade silicon each year, split between REC and Hemlock. Owing to the surging number of onshoring projects for semiconductor and solar manufacturing, U.S. silicon demand is predicted to double in the coming years. In this case, the Appalachian Triangle and Pennsylvania offer an optimal clean manufacturing ecosystem to produce additional metric tons of metallurgical-grade silicon. Nucor Steel announced a 3 million ton of steel facility in February 2023.⁵⁸

On the shores of Lake Erie, Cleveland-Cliffs, the most extensive producer of flat stock steel and iron ore in North America, has built a steel manufacturing plant in Toledo, responsible for 25% fewer carbon dioxide emissions per ton of steel. This facility uses clean hydrogen to reduce iron oxide instead of coal. In Ohio alone, nearly 30,000 acres of solar power plants are either being developed or assessed. This could bring about comprehensive decarbonization throughout the steel manufacturing supply chain of the Greater Central Appalachian Voltage Valley.⁵⁹

Future research opportunities of interest

Limitations

In addition to future research opportunities, there are other important considerations for the development and operation of Clean Innovation Ecosystems in Greater Central Appalachia. One consideration is the identifying and inventorying of assets available in the region, particularly of former fossil fuel sites and their infrastructure that can be repurposed and built back better as part of a CIE. Another key area for research is identifying appropriate business clusters for CIE and how to establish these clusters in the region. It is also important to identify the obstacles and their mitigation options for developing a conducive regional business environment in which a CIE can be established and flourish. Additional Research should explore how to create Community Advisory Boards (CABs) across governmental boundaries and whether multiple CABs can exist across the CIE region, and if so, how can they be coordinated. Finally, to promote public buy-in and support, it is essential to develop effective ways to educate and inform the public of a CIE’s development and its impact on the community, especially in the distressed communities.⁶¹