Two big new-energy factories along I-76. The takeaways?

Colorado has rapidly been adding clean-energy sector jobs. That includes in Pueblo. But will any end up in the coal capital of Craig?

by Allen Best

Two companies in the blossoming new and renewable energy sector in late June announced plans for factories along Interstate 76 on metropolitan Denver’s northeastern fringe.

Together, the two companies say they will have upwards of 1,200 workers and will invest $440 million in their factories that will produce photovoltaic solar panels and advanced energy-dense batteries. They offer well-paying or better jobs.

Very pointedly, these factories will not be in the coal towns of Colorado. I’ll get back to that.

In explaining their businesses, both cited the advantages of location. Each factory will be within a mile of Interstate 76, with straight-forward connections to both I-70 and I-80 as well as I-25 and E-470. Both also cited the proximity of Denver International Airport.

VSK Energy, a new manufacturer of solar photovoltaic modules, also cited Colorado’s “central location” in the United States as a factor.

Amprius battery factory site in Brighton

Amprius Technologies plans to move into this warehouse in Brighton that was formerly used as a distribution center for Sears and Kmart. Top, VSK Energy plans a solar photovoltiac production factory about a mile away in Brighton. Both are along I-76. Photos/Allen Best

Amprius Technologies, which hopes to begin production in 2025 of energy-dense lithium-ion batteries, cited the proximity to Montana, the source for silicon that is key to the company’s “secret sauce.” The silicon derivative is to replace graphite on the anodes on its batteries, increasing their capacity by as much as 10 times. As such, these energy-rich batteries will be able to charge to full capacity in six minutes and can double the range of a Tesla to 650 miles. The company says this will provide greater value to both drones and to aircrafts. If true, this sounds like a game-changer.

Andrew Huie, the vice president of infrastructure for Amprius, also pointed to easy access to the quantities of electricity that will be needed. The company is taking over 775,000 square feet of an empty 1.3 million square-foot building that had previously been used as a distribution center for Kmart and Sears.

Building a new facility or one requiring new electricity capacity could otherwise take years. He knows from experience, as in a previous career stop he helped expand the Panasonic battery manufacturing capacity, including a 2.7 million square-foot factory in Kansas that is to cost $4 billion.

Huie said Colorado’s drier climate was advantageous when manufacturing batteries compared to the more humid climates of Texas and Georgia, other finalists in the selection process.

Both companies also cited the availability of a skilled workforce suitable to their needs. Amprius will employ 300 people, with everything from $30/hour jobs to those paying $200,000 a year. The California-based Amprius will also need six Ph.D.s in its research department in Brighton. Amprius also cited the proximity of Colorado School of Mines, the University of Colorado-Boulder and Colorado State University as a benefit.

The solar factory, to be located at the recently completed 76 Express Commerce Center, will get more than $9 million in performance-based tax credits from Colorado during the eight-year ramp-up if it delivers the predicted jobs with minimum average annual wages of $65,312.

Both companies similarly cited what Vikram Solar’s Ashwini Agarwai called a “strong cultural fit.” Supply chains matter, but it helps that Colorado has shown initiative in wanting to be a national leader in the energy transition.

“Colorado and Gov. Polis are embracing clean energy, and batteries align with Colorado’s clean energy goals,” said Huei. “There may be synergies,” he added.

Of note, too, is that both companies have leadership from Asia. VSK, the solar company is a majority U.S.-owned and operated joint venture between one of the largest solar energy solution providers, Vikram Solar, and other partners.

Kang Sun, the chief executive at Amprius, holds a Ph.D. in materials science and physical chemistry from Brown University but got his first degree, in macro molecular science and engineering, at China’s prestigious Nanjing University.

Brighton, site of the two factories, has had a stake in the energy transition since Vestas, the Danish wind company, arrived in 2010 to manufacture nacelles.

Now, other companies have proliferated. The Denver Business Journal points to three other battery companies in the northern Front Range: Thornton-based Forge Nano uses nanotechnology to precisely engineer materials that can make lithium-ion batteries and hydrogen fuel cells significantly more effective. Louisville-based Solid Power also plans a battery materials production site in Thornton. A Fort Collins company, Prieto Battery, also plans a production facility.

Vestas opened a factory in Pueblo that manufactures towers for wind turbines. Citing incentives in the Inflation Reduction Act, current owner CW Wind America has launched a major expansion. File photo/Allen Best

Federal policy also matters. The 2022 Bipartisan Infrastructure Act and, more important, the 2023 Inflation Reduction Act, give clear direction to the market through various incentives. Sriram Das, chairman of VSK Energy, called out the latter as a “landmark moment.” His company, he said, was “taking a decisive step toward achieving solar technology self-sufficiency, fortifying America’s energy security and propelling large-scale solar development.”

Amprius has no direct impetus from the law, however.

Here’s one final major takeaway, and it’s a bit troubling for those of us who would hope to see all of Colorado emerge from this energy transition strongly. These factories are not going in Craig and Pueblo, where the coal plants are being closed in roughly six and a half to seven years, perhaps less. They’re going on the edge of the metroplex.

Pueblo has fared relatively well in this energy transition, although major questions also remain.

In 2009, Pueblo gained a factory to produce towers for wind turbines. The current owner, CS Wind America, in April broke ground on an expansion that will produce at least 850 new employees by the time the expansion is completed. The building then will encompass 1.58 million square feet.

In announcing the expansion, CS Wind cited the Inflation Reduction Act’s encouragement of American clean-energy supply chains and expansion of clean energy jobs.

It’s adding solar and storage capacity that would have been almost inconceivable a decade ago.

Jeff Shaw, president of the Pueblo Economic Development Corporation, said he expects announcement of other renewable-sector projects in the Pueblo area and probably throughout the state during the next 12 to 18 months. “A lot of it has to do with the Inflation Reduction Act,” he said, and in particular the law’s buy-American provision.

But Pueblo is still weighing its opportunities for life beyond burning coal. Xcel Energy, the primary owner of the two remaining units at Comanche, has pledged to continue paying property taxes to 2040. All the new solar and storage don’t come close to replacing Comanche.

Hydrogen? Nuclear? There are ideas, but nothing more, for what how the Craig coal-burning site can be used once combustion ends in 2030. File photo/Allen Best

As for Craig, it’s future remains littered with question marks.

It’s 90 miles from the closest interstates, north and south. It has a skilled workforce, but not a metropolitan area from which to solicit workers. It has a great location, if you love the outdoors. No traffic jams on I-70. But it tends toward bitterly cold winters.

It does have infrastructure, both the Craig Generating Station and, about 15 miles away, Hayden Generating Station.

Can this massive infrastructure built for the combustion of coal somehow be reconfigured to other good purposes in this new energy economy?

There was hope for hydrogen, but Xcel Energy’s Pawnee plant, in northeastern Colorado, got first on Colorado’s blessings.

Might nuclear replace coal? There’s hope – bolstered by billions of new federal aid, even if boosters have a habit of downplaying costs. The Economist got it exactly right in its headline for a June article: “American aims for nuclear-power renaissance: The Biden administration is pouring billions into the industry. The payoff isn’t certain.”

In every transition, there are winners and losers. Please note the demise of Colorado’s oldest newspaper, the Rocky Mountain News, and – well, every newspaper this writer ever worked at full time.

Maybe Craig will figure out its next career soon. Or maybe not.

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