NREL, Sept. 16, 2019
In-state wind turbine manufacturing and installation support both short-term and long-term jobs and account for other economic impacts, according to a National Renewable Energy Laboratory (NREL) case study of Xcel Energy’s 600-MW Rush Creek Wind Farm—Colorado’s largest wind energy project. NREL researchers who conducted the study also gained a deeper understanding of how wind plant construction impacts the economies of rural communities, where wind plant construction often occurs.
The recently published report, Economic Impacts from Wind Energy in Colorado—Case Study: Rush Creek Wind FarmPDF, provides the results of quantitative and qualitative analyses. By using modeled and empirical data, the NREL team developed an informative picture of the economic impacts of wind energy development in rural Colorado—results that could apply to other states as well.
Highlighting the importance of domestic manufacturing, the study focused on the economic impact of jobs, earnings, gross domestic product (GDP), and gross economic output during the relatively short construction phase and the longer-term operation and maintenance phase.
“Rush Creek is unique because its 300 2-megawatt (MW) wind turbines were all manufactured in Colorado facilities,” said Jeremy Stefek, NREL researcher and lead author of the report. “This gave us the opportunity to study the jobs and economic activity supported by wind energy’s manufacturing and supply chain in Colorado.”
The Rush Creek Wind Farm spans four rural counties on the Colorado’s eastern plains (see Figure 1). Installing wind turbines manufactured in the same state increased the farm’s economic impacts to Colorado. Using an in-state manufacturer also decreased transportation time and costs, as wind turbine components were delivered to the installation site by truck rather than rail. Wind turbine components, such as the blades, towers, and nacelles, were manufactured and assembled in Colorado using several in-state suppliers for subcomponents. Some parts and materials, however, were sourced from out of state. For example, nacelles were assembled in Colorado, but the subcomponents within the nacelles (such as generators and electronics) were manufactured elsewhere.
Quantitatively, NREL’s Jobs and Economic Development Impact (JEDI) Wind Energy Model was used to estimate the gross economic impacts from the Rush Creek Wind Farm. JEDI models are user-friendly screening tools that estimate some of the economic impacts of energy projects.
Using empirical data, modeled data, and market research, NREL researchers created a set of assumptions to represent the economic scenario for the Rush Creek Wind Farm. Based on the analysis, the Colorado statewide economic impacts from Rush Creek are shown in Figure 2. Another JEDI analysis estimates the economic impacts of Rush Creek in the area where the development is located.
The JEDI analysis shows that it’s not just the construction phase of a wind plant that creates economic impact. The Rush Creek Wind Farm will support 180 long-term jobs and $20 million in GDP in Colorado annually throughout the operation and maintenance phase of its anticipated 25-year lifespan. In addition, Rush Creek will provide an estimated $45 million in landowner lease payments and approximately $62.5 million in property taxes during the 25-year life of the project.
Qualitatively, researchers interviewed 39 community members near the Rush Creek Wind Farm to collect empirical economic data as well as first-hand knowledge of community-level impacts during wind farm construction. Interviewees included local business owners, managers, employees, county commissioners, and economic development office representatives. Providing insight into actual effects of the wind farm on the local people and economy, most interviewees stated that the Rush Creek Wind Farm is one of the reasons business had increased over the past year.
“Our research into economic development from wind energy in rural communities can inform other communities across America as they consider future wind development,” Stefek said. “The idea of engaging communities to understand the on-the-ground effects of wind development makes this research unique and offers a powerful message about wind energy’s economic impact.”
The empirical research found that:
- 67% of businesses experienced increases in revenue from the previous year—and 11% saw significant increases
- 28% of respondents hired new people in the previous year
- 56% of employees worked more hours than the previous year.
Although interviewees were overall supportive of wind development, many reported challenges from wind farm construction stemming from the influx of temporary workers to their communities, including:
- Local housing shortages
- Increased housing prices
- Lack of infrastructure to house temporary workers
- Inability for some local businesses to keep up with increased demand
- A small pool of qualified local candidates from which to hire.
However, even in the face of these challenges, community members indicated that local businesses and business development organizations support wind construction.
By considering the results of this Colorado case study, rural communities can be better informed and prepared to maximize local economic benefits of future wind development and address the challenges as well.
During the construction phase, the Rush Creek Wind Farm supported 620 jobs in the four counties where the project is located and increased the region’s economic output by $78 million.
The NREL report also examined the supply chain impact of the project on the statewide economy, because all of the wind turbine blades, towers and nacelles were built in Colorado at facilities owned by Vestas Energy. Statewide, Rush Creek’s construction supported 2,970 jobs while adding $570 million in economic output.
With the construction phase complete, the local economy will see 47 new jobs and $9 million in economic output supported by the wind farm every year, according to NREL. Statewide, the project’s annual economic footprint will be 180 jobs and $33 million in economic output.
Those jobs, by the way, will have average salaries of about $64,000 per year, well above the state average.
Next, there’s tax revenue. NREL estimates Rush Creek will generate $62.5 million in property taxes over the next 25 years.
These revenues will support public schools, libraries, fire departments and other essential services – and the estimates do not include millions of dollars in additional permitting fees and sales and use taxes tied to the project.
The NREL report also examines the lease payments due to farmers, ranchers and other property owners with turbines on their land. Those lease payments are estimated to be worth $45 million over the life of the project, which will “help farmers and ranchers maintain financial stability when commodity prices are low or bad weather hits the region.”
Overall, the authors of the report found that 72% of locals interviewed support the development of wind energy in their community. Likewise, 67% of local businesses experienced a positive impact from the project, according to the report.
These findings are remarkable enough on their own. But the Rush Creek story is even more noteworthy because this large-scale wind farm was built in a conservative corner of the state that strongly supports oil and natural gas development.
Consider the following: As a group, Elbert, Kit Carson, Lincoln and Cheyenne counties voted Republican in last year’s gubernatorial election in Colorado by a margin of 74% to 20%. At the same time, these four counties voted no on Proposition 112 – a ballot measure that would have all but banned oil and gas development in Colorado – by 76% to 24%.
Elbert, Kit Carson, Lincoln and Cheyenne counties also produced over 1.5 million barrels of oil and more than half a million cubic feet of natural gas last year, according to state data. And they did it while fully embracing the expansion of renewable energy in Colorado.
Because here in eastern Colorado, “all of the above” isn’t a political slogan – it’s just the way we do things. It’s also an example the rest of the country would do well to follow.
Rod Pelton (R-Cheyenne Wells) represents House District 65. He is a farmer and rancher. Greg Brophy is a former state legislator from the Eastern Plains and the Colorado director of The Western Way (www.thewesternway.org), a conservative nonprofit that seeks pro-market solutions to environmental challenges.