Like the rest of the Midwest, Denver has experienced its fair share of financial woes of late due to slumping oil prices. Extracting oil and gas from the nearby Niobrara shale formation added thousands of jobs to the local economy in recent years.
The downturn has thrown some local refineries into the red (some even bankruptcy) and slashed spending. However, Denver’s diverse, bustling economy (which we outlined in our ongoing Silicon Cities series) has been able to weather the storm. Denver hasn’t seen a dramatic reversal of its hot job market or startup activity due to the oil market’s troubles, and even the energy sector isn’t quite dead yet. Renewable energy startups and companies are popping up in the area.
“We’re seeing oil and gas companies vacating office space, but at the same time the Denver area is growing,” says Alexandra Hall, chief economist with the state’s Department of Labor and Employment. “It’s important to keep in mind that at its peak, mining and logging employed 36,000 people out of two million. It’s a really small proportion of direct jobs in our economy, and when it comes to energy there are several renewable firms that are choosing to launch in Denver.”
Hall says that Denver’s diverse economy has absorbed many of the oil and gas employees that stayed in Colorado. Renewables are part of that story. One example is Sunshare, which lets users buy electricity from its solar farms. Last year, the Denver-based company expanded to Minnesota thanks to high demand.
“Oil and gas is experiencing a long downturn, leading to layoffs, suspended operations, and overall lack of economic development,” Jon Sullivan, senior director of project development for SunShare told The Tribune of Greeley, Colorado. “Solar is bursting at the seams all over the country.”
Renewables face encouraging tailwinds from government efforts to promote clean energy. Denver has renewable energy funding plans that encourage clean energy for rural businesses, and Congress is considering extending tax incentives for the renewable sector, a move many experts believe will result in further expansion.
Colorado is home to The National Renewable Energy Laboratory, a government renewable research and development lab, and Denver was recently chosen as the host city for the 2017 U.S. Department of Energy Solar Decathlon a biennial event in which 16 collegiate teams from across the country compete to design, build and operate the best solar-powered house. “As one of the top 10 metro areas for solar installations and sunny days, Denver is a great choice to host the U.S. Department of Energy (DOE) Solar Decathlon,” DOE Under Secretary Orr said in a statement. A bonus for locals: The event will surely shine a light on the city’s renewable startups, too.
On the other hand, a 2015 U.S. Wind Industry Annual Market Report reported a 20 percent increase in wind energy jobs last year, with Colorado ranked in the top 10 for wind production nationwide. Colorado Governor John Hickenlooper highlighted the area’s potential and ongoing investment across the state in an April 12 release. “An investment in the wind power industry and in wind projects generates new jobs, economic development in rural counties and clean air benefits to all Coloradans.”
While the oil and gas slump won’t last forever, renewable energy is making inroads that could help reshape the composition of the energy sector. The 2015 global climate change agreement brokered in Paris last year also augurs for a future that includes a greater share of renewables in the overall energy mix. For a city that has long relied on traditional energy production in the rich oil fields of the Denver Basin, these new economic developments prove that local innovation can help diversify a local economy and provide a valuable hedge against volatile global markets.