Colorado Case Study Demonstrates In-State and Rural Economic Impacts from Wind Manufacturing and Plant Construction
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 Farm, 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.