Economic Development from the New Energy Economy Suzanne Tegen Suzanne.Tegen@colostate.edu
Jobs in Clean Energy Buildings, wind, solar, hydropower, geothermal, biomass, electric vehicles, batteries, power electronics, …
Jobs in Energy Efficiency 2.3 million workers spent some or all of their time working with EE technologies and services n 2018.
Project Development & Onsite Labor Impacts • Sample job types • Truck driving • Crane operation, hoisting, rigging • Management, support • Earth moving • Panel installation • Cement pouring • Siting Photo Credit: NREL 16733 Photo Credit: Suzanne Tegen Photo from Sally Wright, Renewable Energy Research Lab - Umass, NREL 15160 Photo: GRID Alternatives
Local Revenues, Turbine or Panels & Supply Chain Impacts Sample Job Types • Steel mill jobs, parts, services • Equipment manufacturing and sales • Module, blade and tower manufacturers • Property taxes, financing, banking, accounting NREL Image Gallery 14711 Photo from iStock 8384987 Photo from iStock 7792082 Photo from iStock 4088468 Photo from iStock 8433850
Induced Impacts are real Photo from iStock 9774681 Photo from iStock 8783332 Photo from iStock 4363756 Money spent in the local area on goods and services from increased revenue, including: hotels,sandwich shops, grocery stores, clothing, other retail, public transit, cars, restaurants, and medical services. Photo from iStock 3275965 Photo from iStock 8007815
Example from Colorado: Rush Creek Wind Farm Multiplier Effect on Colorado Local Revenue, Turbine and Supply Chain Impacts Induced Impacts On-site Impacts • Construction Phase • 1,843-2,616 jobs • $412.7 million -$564.2 million in economic output • Operational Phase • 96-102 jobs • $22.2 million-$23.3 million/yearin economic output • Construction Phase • 289-378 FTE jobs • $26.8 million- $35.6 million in economic output • Operational Phase • 24-28 jobs • $1.9 million- $2.2 million/year in economic output • Construction Phase • 840 jobs-1,166 jobs • $128.7-$178 million in economic output • Operational Phase • 55-58 jobs • $8.8 million-$9.3 million/year in economic • output Construction Phase: 18 months Operational Phase: 25 years
Rush Creek Wind Farm Multiplier Effect: 4-county Impacts Induced Regional Impacts Regional Revenue, Turbine and Supply Chain Impacts On-site Regional Impacts • Construction Phase • 543-858 jobs • $67.9 million-$107.3 million in economic output • Operational Phase • 28-29 jobs • ~$7 million/year in economic output • Construction Phase • 28-29 jobs • $7 million-$7.1 million in economic output • Operational Phase • 7 jobs • $1.1 million/year in economic • output • Construction Phase • 14-18 FTE jobs • $1 million-$1.3 million added to GDP • Operational Phase • 12 -13 jobs • ~$1 million/ year in economic output Construction Phase: 18 months Operational Phase: 25 years
Wind Energy Supports Landowners Financially • Wind energy is a cash crop: • $289 million in landowner lease payments in 2018 across U.S. • $1.8 million = annual estimated landowner lease payments from Rush Creek. • Additional income provides stability for farmers and ranchers. Payments help offset decrease in farm revenues during drought and other hard years. Rush Creek Wind Farm, 2018
“Cash Crop” for Farmers and Ranchers • 70 percent of the revenue from wind energy goes to landowners who live in counties with below average incomes, providing a welcome source of new income (2015). • Landowners with wind turbines on their property invest twice as much money into their farms for things like home improvements, outbuildings, and equipment, than landowners who lived in townships without windfarms. • They also purchase more farmland and plan for their farm to continue in the future. (Mills, 2014) “Wind energy is helping me pass our fourth-generation farm to our son. I’ve been nothing but happy with my turbines and the whole process,” said David Hanson, a landowner that hosts 3 Lakefield Wind turbines on his property. (Minnesota) Photo: Red River Mutual Source: https://windonthewires.org/blog/40/smart-choice-wind-energy-puts-farmland-to-work-in-a-new-way
Economic Development Impacts from Clean Energy • Construction jobs in rural areas • Long-lasting, well paying operations jobs in rural areas • Manufacturing, supply chain, logistics jobs • Domestic manufacturing content is high for wind power • Indirect jobs (steel, cement, trucking, water, business services) • Increased revenue for local businesses • Land-owner payments for leased land and “good neighbor” payments • Property tax revenue for rural counties (for schools, roads, etc.) • Rural areas can save schools, keep young families in the area • American (regional, state) energy independence • Cleaner air, cleaner water, less pollution, fewer asthma cases
Federal Subsidies for Fossil Fuel In 2005, Congress authorized $1.5 billion in credits for integrated gasification combined cycle properties, with $800 million of this amount reserved specifically for coal projects. Nonconventional Fuels Tax Credit (ended 2014). Created by the Crude Oil Windfall Profit Tax Act of 1980 to promote domestic energy production and reduce dependence on foreign oil …this credit provided $12.2 billion to the coal industry from 2002-2013. Chemical & Engineering News: [Coal] aid runs deep and comes in many forms—state and federal tax breaks for mining and use; technological support for mining and exploration; national resource maps to encourage exploration and development; tariffs on foreign coal; and aid to steel smelters, railroads, and other industries that burn coal to encourage greater use and develop a steady market for coal. Nuclear – the Price-Anderson Act of 1957 requires the federal government to indemnify utilities in case of a nuclear [power] disaster. The study quotes utility officials speaking in the 1950s who warned that without [it], the industry could not exist.
Thank you. Center for the New Energy Economy Suzanne.Tegen@colostate.edu
References and Resources on Energy Economics and Clean Energy • WINDExchangewww.windexchange.energy.gov • Jobs and Economic Development Impacts models: www.nrel.gov/analysis/jedi • U.S. Energy and Employment Report (2019) by NASEO and the Energy Futures Initiative • Wind on the Wires https://windonthewires.org/blog/70/new-study-shows-local-economic-benefits-of-wind-farms • Clean Transportation Deployment https://www.nrel.gov/transportation/deployment.html • Renewable Energy Integration and Optimization (REopt): https://reopt.nrel.gov/tool • Advanced Vehicles and Alternative Fuels Laws and Incentives by State: https://www.afdc.energy.gov/laws/state • Wind energy and wildlife/birds by Audubon: https://www.audubon.org/magazine/spring-2018/how-new-technology-making-wind-farms-safer-birds
Land-based wind Jobs and Economic Development Impacts (JEDI) model first developed in 2004 to estimate impacts from wind energy development and operations. Models available for solar, geothermal, biomass, biogas, ethanol, wind, and many other resources. JEDI is meant to be easy to use yet economically sound, and produces gross, not net, impacts. Default data used for general estimates. Model users can update data with their own to provide estimates that more closely reflect specific projects. The JEDI model’s outputs are reported in full-time equivalent (FTE) jobs. Onsite impacts are validated periodically (e.g., Billman and Keyser, 2013). Installed costs and O&M costs are updated annually. Search NREL JEDI model or go to nrel.gov/analysis/jedi/ Free Tool That Estimates Jobs: NREL’s Jobs and Economic Development Impacts Models