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missing industries with some local impacts

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Jesse Kaczmarski

I am part of a research team working on a project evaluating the economic impact of the installation of a microgrid in Bernalillo County, New Mexico.  We are having trouble understanding exactly how we should input project costs so that they are interpreted correctly by IMPLAN.

The microgrid has several component costs which we have categorized as follows:

storage battery capital cost -> storage battery manufacturing (333)

PV capital cost -> construction of new power and communication structures (52) 

electrical components cost -> Other electronic component manufacturing (310)

control components cost -> Data processing, hosting, and related services (436)

generator capital cost -> Turbine and turbine generator set units manufacturing (281)

All costs mentioned include equipment and labor cost.

The issue that we are running into is that industries 333 and 281 don't exist in our study area (Bernalillo County). Although we are currently attributing all costs of the "PV capacity cost" to industry 52, a similar issue exists in that industry because PV manufacturing doesn't exist in the region. We don't expect this project to result in the creation of any of these industries in the county, but want to acknowledge that some of the costs will happen in-state.

In order not to overestimate impacts, the approach we are taking now is to parse out the labor component of the "battery storage cost" and “generator capital cost” and input that as employee compensation in industry 52. We have very little detail on cost breakdowns, only an estimate of the percent of cost that is attributed to labor. Because we do not believe these industries will be created due to this project, our understanding is that it would not be correct to customize the region/create the new industry in this case.

Would you be able to provide any recommendation for how we should proceed when this type of issue is present in order to ensure credible results?

Thank you in advance!

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    Sean Ryu

    Thank you for the additional information! For this case, you should have one event for the construction of the microgrid which will include labor, hard costs such as materials, and soft costs such as architectural, engineering & legal fees. Not included in the construction event would be furniture, fixtures, & equipment (FF&E), opening costs, working capital & contingencies, PILOTs, bid fees, & Industry specific license, and land values. If you have the FF&E values that you would like to include, you can model them in separate commodity events and set the LPP to SAM, but those should not be included in the construction event. If the Inverter and module will be purchased out of state, do not include those your analysis.

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    Sean Ryu

    Hi! We would like a little more clarification to better assist you. Are you looking to model the impacts of the investment in a new microgrid (which would include the construction, equipment, and installation of the FF&E), the operations of the microgrid facility itself, or both?

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    Jesse Kaczmarski

    Hello, thank you for your response. To clarify, we are interested in modeling the investment in a new microgrid only (so construction, equipment, and installation). For example, for the PV capital cost category, we have the following sub categories: contingency, engineering and development overhead, grid interconnection, land prep & transmission, permitting and environmental studies, sales tax, balance of systems equipment, installation labor, installer margin and overhead, inverter, and module. We believe everything but the inverter and module can be attributed to Bernalillo County. Inverter and module will be purchased out of state. In this example, would it be correct to attribute the remainder to industry 52 - construction of new power and communication structures (in the appropriate categories like output, employee compensation, etc)?

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