Wind Power has the Ability to Maintain Rural Communities
August 12, 2011
As the economy has suffered and unemployment has stayed high, there's been a lot of talk about green jobs and the green economy. Some critics claim the green economy isn't real—or is at least oversold. But for National Renewable Energy Laboratory energy analyst Eric Lantz, it's all about the opportunity for jobs—and particularly where those jobs are created.
Wind energy development, according to Lantz, has the power to maintain communities in rural areas of the country. Areas that have been under-invested in for years and are losing families and youth, he says, have the biggest opportunity to see job creation and increased income. He says the primary direct income contribution is through annual land lease payments that often go to the nation's farmers.
"A lot of times we see payments that are on the order of four to six-thousand dollars per megawatt. And each turbine may be one-and-a-half to three megawatts. It can add up to a relatively substantial amount. In addition, wind projects make relatively sizable property tax payments to the local government. Often times property tax payments are on the order of seven-thousand dollars per megawatt, so again, those property tax payments can add up rather quickly."
Lantz says that has a ripple effect—providing for additional economic activity at multiple layers. He notes local purchases and manufacturing provides for tremendous indirect economic development activity in the state or local community. And because of transportation costs, Lantz says manufacturers want to locate in areas of demand—those with a great wind resource, which are typically in rural America.
"We've seen a number of OEM equipment manufacturers locate kind of throughout the wind corridor, the central Plains of the U.S. And that includes Texas, Arkansas, Kansas, Nebraska, Wyoming, Colorado, and then Iowa. In addition, some of the lower-tier manufacturers, those people who make bearings, gear boxes and other components, they provide a significant new opportunity for manufacturers in the Midwest."
That's one reason Lantz says it's beneficial to build wind energy projects as opposed to other conventional sources of electricity generation. He says new manufacturing in the U.S. boosts the economic development potential from wind power.
"Most recent estimates estimate that domestic content in the wind energy is about 60 percent. And what that means is that from an economic development perspective, we can provide a very large amount of our labor and our equipment for wind energy projects in the U.S. That obviously benefits the local communities where projects are sited, as well as the rest of the supply chain. And that's not something that's true of all types of power generation."
That doesn't mean Lantz believes the use of local goods should be required. He says the way to maximize the economic development potential of wind energy is providing incentives or training programs that can attract manufacturers to an area. He says making the environment more competitive is the best way to increase the local share of goods and services that go into projects.