U.S. Department of Energy Office of Energy Efficiency and Renewable Energy U.S. Department of Energy Energy Efficiency and Renewable Energy
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Wind Energy: Powering Economic Development for Colorado (Part 1a)

Summary

  • Estimates the economic impact of using wind power to meet one-half of Colorado's new energy demand from 2002 through 2012 (part 1a) and three quarters of Colorado's new energy demand from 2002 through 2020 (part 1b). Compares economic impact of using wind to meet this demand as compared to natural gas.
  • Estimates positive impact from wind installations on employment during manufacturing, installation and operation and maintenance phases, indirect employment, landowner revenue, local tax income, avoided water use from displaced conventional energy generation, and electricity pricing impacts.
  • Summarizes other state policies supporting wind energy, including those in Texas, Iowa, and Minnesota.
  • Suggests implementation of renewable policies, including renewable purchase obligations, tax incentives for renewable energy equipment, and service charges to fund renewable energy development.
  • Details Colorado's wind energy potential and summarizes Colorado's renewable energy industry.

Citation: The "Wind Energy: Powering Economic Development for Colorado" report was available from the Environment Colorado Web site.
Author(s): Travis Madsen, Stephanie Bonin, Matt Baker (Colorado Public Interest Research Foundation)
Report Date: Nov. 2002

Project Size: 1,800 MW
Number of Turbines: n/a
Location: CO
Geographic Scope: Colorado
Turbine Ownership: n/a
Type of Study: Prospective
Timeframe of Data: 2002 - 2012

Model: n/a

Data Sources: Electric Power Research Institute;

Assumptions: Wind turbines will be able to operate more efficiently over the next 20 years; capacity factors are assumed to increase one percent every two years, average capacity in 2002: 30%. Building cost/MW: $900,000. Manufacturing and installation: every MW of wind energy capacity installed creates 2.06 year-long manufacturing jobs; 10% of manufacturing will happen in-state; every MW of wind energy capacity installed creates 0.5 year-long local installation jobs; direct "construction" jobs are one-year jobs; 20% of these jobs are estimated to be installation and 80% to be manufacturing. Operations & Maintenance: "operations" jobs are long-term and include operation and maintenance; every 6.9 MW of capacity requirers one full-time employee to operate, monitor and service it. Indirect jobs: 1.15 indirect jobs are created for every direct wind energy job. Landowner income: estimated at 2.5% of the yearly sale of electricity at 3 cents/kWh, escalating with projected growth in wind power use. Future dollar values do not include inflation or discount estimates. Property tax: uses the average Colorado county property tax rate of 1.59%.

Special Considerations: Report is based on a conservative scenario in which Colorado wind power meets half of new demand through the next ten years (5,110 GWh or 10% of Colorado's total electricity needs) and then three-quarters of new demand in the following decade (12,600 GWh/year by 2020 or 20% of Colorado's total electricity needs; see "Wind Energy: Powering Economic Development for Colorado" 1b).

Jobs Construction Operations (jobs/year) Total
Direct 1,290 (1 year jobs) 260 1,550
Indirect 1,500 (1 year jobs) 300 1,800
Induced      
Total 2,790 (1 year jobs) 560 3,350
Jobs/MW 0.717 (1 year jobs) 0.144 0.861

 

Income Construction Operations Total
Direct $48,000,000 $10,000,000/year $58,000,000
Indirect      
Induced      
Total $48,000,000 $10,000,000/year $58,000,000

 

Taxes Direct Indirect Total
Local/State     $74,000,000
Income      
Property      
Sales      
Total     $74,000,000

Developer Incentives: Varying tax rate for renewables (not yet implemented).

Lease Payments: $20,000,000

Other Remuneration: Conservation of 6.8 billion gallons of water (when compared with natural gas), with water rights worth more than $47 million at current Front Range prices; in-state manufacturing for wind farms could create 840 person-years of manufacturing employment through 2020 (payroll value of these jobs would be $33 million).

Conclusion: Meeting new electricity demand with wind power instead of natural gas would result in roughly twice the total economic benefit to Colorado over the next two decades. Wind power could provide 70% more one-year jobs and more than three times as many permanent jobs as natural gas. Wind power could also provide property tax payments to local governments distributed across a wider area of the state, conserve water that natural gas plants would otherwise consume, and pay royalties to farmers, ranchers and other rural landowners.