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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Variables Affecting Economic Development of Wind Energy

Variables Affecting Economic Development of Wind Energy

File: Variables Affecting Economic Development of Wind Energy

Date: 7/28/2008

The purpose of this research is to look at the specific factors that drive wind-power-related economic development and to better understand the impact of specific economic development variables on new wind project economic benefits. We also compare economic development impacts of wind and coal power.

We used the National Renewable Energy Laboratory's (NREL's) latest Jobs and Economic Development Impacts Wind (JEDI Wind) model to perform a sensitivity analysis of wind-power-related economic development drivers, and economic development benefits for wind and coal were estimated using NREL's JEDI Wind and JEDI Coal models.

Our research shows that economic development impacts can be dramatically enhanced through the development of local wind power manufacturing industries. We determined that if 10% of the wind turbine supply, for 1000 megawatts (MW) of development, is manufactured in-state, then construction-period economic development benefits are 68% greater than if all wind turbines are imported from out of state. On a secondary level, benefits are enhanced by developing and maintaining a skilled operations and maintenance labor force. Preliminary work shows that ownership structures that rely on local equity are likely to enhance in-state economic benefits, but our research suggests the majority of this benefit will accrue from the return on equity associated with a profitable wind project. Finally, we find that the economic development impacts of wind are generally forecast to exceed those of coal (except in some cases when coal consumed in new coal power plants is supplied by an in-state mining industry).

This information was last updated on July 28, 2008