Recent Research: Wind Power Promises Big Returns for State Economies

Wind power is the fastest-growing method of renewable power generation in the U.S. This new attention is due to the fact that, over the past 20 years, the cost of harnessing wind for the production of electricity has fallen 90 percent. The relative affordability of wind power has made wind a prime target for investment by states looking to increase their energy independence and to reduce their contribution to global climate change. A recent study suggests there might be another justification for this investment. The National Renewable Energy Laboratory (NREL) reports that wind power offers greater direct economic returns on state investment than other sources of power, including coal and natural gas.

 

The NREL study examines the economic impact of building and operating the various components necessary to introduce electricity generated by commercially available technologies. Coal, natural gas, and wind facilities in Colorado, Arizona and Michigan were used as models to evaluate the economic impact new power generation can have for a state. Having a diverse portfolio of energy sources can attract a wide range of associated businesses and can assist states in leveraging outside funding to commercialize new technologies. This particular study, however, confines its investigation to the direct economic impacts of new plants and distribution networks. This includes all new investment within a state in the construction and upkeep of new facilities, including:

• Construction of physical infrastructure;
• Materials and labor for operation and maintenance;
• Materials and labor for fuel extraction and transport;
• Project financing;
• Landowner revenues; and,
• Property taxes.

Results differ for each state, depending on the available resources and infrastructure, but wind power investments tend to provide greater economic returns in large part because of the potential state revenue from property taxes. Wind requires a greater number of facilities for production than other methods and tends to rely on in-state workers. Coal and natural gas production also can have a significant impact on a state economy, but only if natural reserves of these resources are available within that state.

 

The report confirms the findings of a study released late last year by the New York State Energy Research and Development Authority (NYSERDA). That investigation suggested the state of New York could expect a return of $9.71 to $10.66 in new capital and employee salaries per megawatt hour of electricity produced by wind projects. The NYSERDA study also observed that, although wind farms are more common on the West Coast, wind projects in the Northeast stand to generate greater economic benefits for state and local economies. Higher land values and property taxes, as well as the regions topography, put Northeast states in a unique position to profit from wind investment.

 

Read the NREL report Comparing Statewide Economic Impacts of New Generation from Wind, Coal, and Natural Gas in Arizona, Colorado, and Michigan at: http://www.nrel.gov/docs/fy06osti/37720.pdf

 

Read the NYSERDA report Major Economic Impacts of Utility-Scale Wind Projects in New York at: http://www.powernaturally.org/programs/wind/MajorEcoImpactsUtilityScaleWind.pdf

 

Links to these papers and more than 4,000 additional TBED-related research reports, strategic plans and other papers can be found at the Tech-based Economic Development (TBED) Resource Center, jointly developed by the Technology Administration and SSTI, at: http://www.tbedresourcecenter.org/.

 

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