Economic Development Impacts of Community Wind Projects: A Review and Empirical Evaluation
Community wind projects have long been touted (both anecdotally and in the literature) to increase the economic development impacts of wind projects, but most analyses of community wind have been based on expected results from hypothetical projects. This report provides a review of previous economic development analyses of community wind projects and compares these projected results with empirical impacts from projects currently in operation. A review of existing literature reveals two primary conclusions. First, construction-period impacts are often thought to be comparable for both community-and absentee-owned facilities. Second, operations-period economic impacts are observed to be greater for community-owned projects. The majority of studies indicate that the range of increased operations-period impact is on the order of 1.5 to 3.4 times. New retrospective analysis of operating community wind projects finds that total employment impacts from completed community wind projects are estimated to be on the order of four to six 1-year jobs per-MW during construction and 0.3 to 0.6 long-term jobs per-MW during operations. In addition, when comparing retrospective results of community wind to hypothetical average absentee projects, construction-period employment impacts are 1.1 to 1.3 times higher and operations-period impacts are 1.1 to 2.8 times higher for community wind. Comparing the average of the completed community wind projects studied here with retrospective analysis of the first 1,000 MW of wind in Colorado and Iowa indicates that construction-period impacts are as much as 3.1 times higher for community wind, and operations-period impacts are as much as 1.8 times higher. Ultimately, wind projects are a source of jobs and economic development, and community wind projects are shown to have increased impact both during the construction and operations-period of a wind power plant. The extent of increased impact is primarily a function of local ownership and return on investment. As such, policies that prioritize higher levels of local ownership are likely to result in increased economic development impacts. Furthermore, the increased economic development impact of community wind shown here should not be undervalued. As the wind industry grows and approaches penetrations in the U.S. electricity market of 20%, social opposition to new wind power projects may increase. Community wind could provide a valuable strategy for building community support of wind power - especially in communities that are new to wind power. This analysis finds that total employment impacts from completed community wind projects are on the order of four to six 1-year jobs per-MW during construction and 0.3 to 0.6 long-term jobs per-MW during operations. Furthermore, when comparing community wind to hypothetical average absentee projects, construction-period employment impacts are 1.1 to 1.3 times higher and operations-period impacts are 1.1 to 2.8 times higher for community wind. Comparing the average of the completed projects studied here with retrospective analysis of the first 1,000 MW of wind in Colorado and Iowa shows construction-period impacts are as much as 3.1 times higher for community wind, and operations-period impacts are as much as 1.8 times higher. As the wind industry has grown, community wind has largely been a peripheral development model. However, this analysis shows that wind projects are a source of jobs and economic development, and that community wind projects have greater economic development impacts than absentee-owned projects. As such, policies that prioritize higher levels of local ownership are likely to result in increased economic development impacts. While the magnitude of increased benefit is primarily a function of local ownership and project profitability, the increased economic development impact of all community wind projects should not be undervalued. The ability of community wind projects to disperse economic impacts within the states and communities where they are built and to engage local community members in the project could provide a valuable strategy for building community support of wind power especially in communities that are new to wind power.
- Research Organization:
- National Renewable Energy Laboratory (NREL), Golden, CO.
- Sponsoring Organization:
- USDOE
- DOE Contract Number:
- AC36-08GO28308
- OSTI ID:
- 1022397
- Country of Publication:
- United States
- Language:
- English
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