Assessing the Economic Impact of Wind Power
Kathy Draeger, Statewide Director of the Regional Sustainable Development Partnerships, sent me a copy of a report, “Community vs. Corporate Wind: Does it Matter Who Develops the Wind in Big Stone County, MN?�, authored by Arne Kildegaard and Josephine Myers-Kuykindall in the Department of Economics, University of Minnesota-Morris. Some excerpts from the report’s Introduction set the stage:
Big Stone County on the western extreme of west-central Minnesota is in many ways emblematic of the challenges facing rural America in general, and the Great Plains in particular. Aging, declining population and stagnant agricultural incomes in many cases directly threaten the sustainability of communities. Often it is the high fixed-cost rural schools and other government and community institutions that feel the pinch first.
One of the few promising opportunities in the region is the possibility of commercial development of the wind resource—and in fact, in Big Stone County, there are presently several projects in various stages of development. …
Recently, a number of researchers have focused on how the development of wind takes place, and what consequences this has for local incomes and economic development. Wind developments can be categorized as either corporate- or community- owned. …
An increasing body of empirical research indicates that corporate and community wind development structures are not equal in terms of their local economic impacts, not limited to the owners themselves. In particular, mounting evidence points to the idea that community wind has greater economic impacts on local economies during the operational phase of the project, due to local spending multiplier effects associated with the higher income streams.
The study concludes
Our simple scenario analysis for a 10.5 MW project suggests that community wind has 5 times the economic impact on local value added, and 3.4 times the impact on local job creation, relative to a corporate-owned development. These numbers should probably be considered an upper bound on the differential impacts, since most projects in practice will involve an outside-the-region equity partner, or at the very least a discounted sale of the PTC.
The report is online at http://cda.mrs.umn.edu/~kildegac/CV/Papers/IREE.pdf. It was supported by IREE (Institute for Renewable Energy and the Environment) and the West Central Regional Sustainable Development Partnership. As Kathy Draeger says, “It is a wonderful example of University research supporting and empowering community owned renewable energy.�