Wind energy for rural economic development


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Wind energy for rural economic development

  1. 1. Louis Woodward / PIX 12971 (Jim Lincoln / Courtesy of Farm Credit Bank of Texas)
  2. 2. Warren Gretz, NREL / PIX04082 Dan McGuire, Lincoln, Nebraska – Director of the American Corn Growers Foundation and American Corn Growers Association Wealth from the Wind program “Higher production costs combined with low commod- ity prices paid to farmers spells economic trouble for rural America. That’s why the American Corn Growers Foundation and the American Corn Growers Association promote wind energy. It’s why we developed the Wealth from the Wind program. We support wind farming as both an alternative income stream for farmers and landown- ers and an economic development opportunity for rural communities.” Daniel McGuire / PIX12476 Basin Electric Co. / PIX12152 Larry Widdel, Minot, North Dakota – Farmer who leases his land to Basin Electric Power Cooperative and now enjoys revenue from two 1.5-megawatt (MW) turbines “Who would have guessed that the air above our land might be worth money someday?” Larry Widdel / PIX12550 Craig Cox / PIX11929 John Stulp, Lamar, Colorado – Commissioner for Prowers County, home to the 162-MW Colorado Green Wind Farm “Converting the wind into a much-needed commodity while providing good jobs, the Colorado Green Wind Farm is a boost to our local economy and tax base.” John Stulp / PIX13298 ©2003 GE Wind Energy / PIX12928 Mike Newton, Highmore, South Dakota – Mayor of Highmore, a town that is now home to the 40-MW South Dakota Wind Energy Center “I had heard some rumblings that wind energy was coming to South Dakota. I asked, ‘Isn’t there any way we can harness this energy and make it work around here?’ And the rest, as they say, is history.” Mike Newton / PIX12934
  3. 3. (Jim Yost / PIX10365)Wind Energy for Rural Economic Development Prowers County EconomyIt’s tough to make a living on the family to the economies of 46 states, and the Reaps Rewards fromfarm. In recent years, net farm income outlook for regional economic growthdecreased as dry conditions in much of from wind energy is positive. Wind Colorado Green Wind Farmthe country reduced the forecasted yields energy projects provide new jobs, a The economy turned around for theof corn, soybeans, and wheat. Lower new source of revenue for farmers and depressed rural communities in Prowerscommodity prices combined with higher ranchers, and an increased local tax base County when construction began on thefertilizer and natural gas prices forced for rural communities. And wind energy Colorado Green Wind Farm in 2003. Atfarmers and ranchers to pursue income is homegrown energy that helps secure the height of construction, subcontractorsfrom off-farm sources—as much as 94% our energy future during uncertain times employed nearly 400 workers, providing aof their total income in 2003, according while reducing pollution and conserving boost to local businesses. Local companiesto the U.S. Department of Agriculture. our precious water resources. that provided services also benefited.High unemployment rates also affectedrural families forced to work off the In fact, achieving the goals of the U.S. • Herling Construction built 25 milesfarm. Bankers foreclosed on farm Department of Energy’s Wind Powering of roads and excavated 108 turbineloans in record numbers—for example, America program during the next foundations.Colorado’s foreclosure rate on farm loans 20 years will create $60 billion in capital investment in rural America, provide • Mortensen employed 87 people to pourwas 30% in 2002. As young people move $1.2 billion in new income for farmers 35,000 yards of the city to pursue an alternative wayto make a living, the traditional rural and rural landowners, and create 80,000 • Gate City Steel employed as many asAmerican way of life is disappearing. new jobs. Wind energy is the fastest- 14 people to install 45,000 pounds of growing energy source in the world, and rebar in each foundation.But there is a bright spot on the rural your rural community may be able toeconomic development horizon: wind reap the benefits. • Christensen employed 46 people at theenergy. The wind industry contributes height of construction to install 20 miles of underground cable and buildJobs the substation. • Wilson Construction employedWind energy projects create new jobs 25 people to install more than 50 milesin rural communities in manufacturing, of buried cable and 44 miles of poles andtransportation, and project construction. cables to the new substation.New projects in the Great Plains • Ridge Crane devoted two cranes to theprompted Denmark’s LM Glasfiber to project for three a rotor blade manufacturing plantin North Dakota. Wind turbine tower • All-Rite Paving & Redi-Mix, Inc.and component manufacturing plants supplied concrete for 32 miles of poleshave created new jobs in several states, and for the substation.including Washington, North Dakota, • Country Acres Motel and RV Park,Nebraska, and Wisconsin. Wind energy projects create permanent operations and maintenance (O&M) jobs. (©2003 GE Wind Energy / which provided housing for construction PIX12933) workers, was booked solid for months.Local labor is often used for projectconstruction, like building roads and • Wallace Gas and Oil provided up to twoerecting turbines. Once the projects truckloads per day of fuel and lubricantsare complete, jobs are created in the Wind energy projects generate more for the vehicles and heavy equipment onoperation and maintenance of the new jobs than conventional fossil fuel the site.projects. The wind power plant in Lake projects. According to a study by the • The Hay Stack Steak House experiencedBenton, Minnesota, is now the second New York State Energy Research and a 30% increase in business.largest employer in town. Construction Development Authority, wind energyon Iowa’s major wind farms provided produces 27% more jobs per kilowatt- • Movie rentals at the local Movie Gallery200 six-month construction jobs and hour than coal plants and 66% more jobs increased 20%.*40 permanent operations and maintenance than natural gas plants. *Craig Cox, Colorado Coalition for New Energyjobs at an average wage of $16 per hour. Technologies
  4. 4. The People Want Landowner RevenuesWind Energy Wind energy offers rural landowners a new cash crop. Although leasing arrangements vary widely, royalties are typically around $2,000 per year for a 750-kilowatt wind turbine or 2% to 3% of the project’s gross revenues. Given typical wind turbine spacing requirements, a 250-acre farm could increase annual farm income by $14,000 per year, or more than $55 per acre. In a good year, that same plot of land might yield $90 worth of corn, $40 worth of wheat, and $5 worth of beef.The Municipal Energy Agency of Nebraska (MEAN) ownsand purchases the power from this new 10.5-MW project Wind turbines have a minimal effect onnear Kimball. (Tennessee Valley Infrastructure Group Inc. / farming and ranching operations. ThePIX12088) turbines have a small footprint, so crops can be grown and livestock can be grazedOn a summer day in Nebraska in 2003, right up to the base of the turbine. As Leroy109 people participated in an 8-hour Ratzlaff, a third-generation landowner and Wind turbines have a small footprint, so crops can be grownspecial survey that yielded startling results. farmer in Hyde County, South Dakota, said, and livestock can be grazed right up to the base of theMore than 60% of the survey participants turbine. (Warren Gretz, NREL / PIX06332) “It’s almost like renting out my farm andtraveled more than 100 miles to voice their still having it. And the cows don’t seem toopinions on electricity-generating options mind a bit.”to the Nebraska Public Power District(NPPD). Increased Local Tax BaseThe special survey, known as DeliberativePolling ™, revealed participants’ feelings Property tax payments fromabout continuing, decreasing, or expanding utility-scale wind projectsthe NPPD’s commitment to renewable provide much-needed revenue toresources after reading, discussing, and rural communities for buildingasking questions of experts. The survey new schools, roads, bridges, andrevealed that an overwhelming 96% of the other community infrastructure.participants thought that the NPPD should Property tax payments of 1%move forward with a 200-MW wind project of the assessed value of a windand the costs should be included in the project equal approximatelybase rate. $10,000 per megawatt for rural communities each year. After the Texas Because wind projects are legislature passed more capital intensive than a Renewable conventional power plants, The Texas General Land Office granted permission for Portfolio Standard property taxes for wind projects are often Texas’ first commercial wind energy farm to be built on state lands in the Delaware Mountains in West Texas. (RPS), utilities and two to three times higher This project has added more than half a million dollars wind companies invested $1 per unit of energy than to the Permanent School Fund for use in Texas schools. billion in 2001 to build 912 MW of new wind power conventional plants. (Southwestern Public Service Co. / PIX03615) projects. The results? “The completed plants created Thanks to wind energy, 2,500 quality jobs with a payroll of $75 million, will Pecos County, Texas, added $4.6 million to its $200,000/year in property taxes, or 50% deliver $13.3 million in tax revenue for schools and counties property tax revenue in of the county’s budget (20 MW) and pay landowners $2.5 million in royalty income in 2002 2002 alone. Here are alone. The multiplier effect of this new investment activity • Carbon County, Wyoming: $480,000/year some more examples will stimulate another 2,900 indirect (85 MW) of communities jobs in Texas. Wind power is reaping the benefits • Iowa: $2.5 million/year (320 MW) bringing relief to rural of property tax revenueWind Power Texas and creating jobs state- from wind energy projects: • Stateline project on the Oregon/ Washington border: $1.2 million/yearBrings Relief to wide.”* • Lincoln County, Minnesota: (300 MW)Rural Texas $471,822 in 2003 (155 MW) • Kewaunee County, Wisconsin: • Prowers County, Colorado: $2 million (162 MW).*SEED Coalition and Public Citizen’s Texas office
  5. 5. Minwind I and II: Innovative Farmer-Owned Projects Wind EnergyAre the Wave of the Future Helps MitigateIn 2000, a group of farmers in Luverne,Minnesota, were looking for an investment enough working capital to purchase four NEG Micon 950-kilowatt turbines (two at Natural Gas Pricesthat would provide a source of income Minwind I and two at Minwind II). They Natural gas accounts for 80% to 90% offor farmers and would benefit the local decided that 85% of the shares must be the cost of producing anhydrous ammoniacommunity. The farmers formed two limited owned by farmers; the rest are available for for nitrogen fertilizers. When natural gasliability companies as a vehicle to pursue local townspeople. prices increase, farmers and ranchers arefarmer-owned commercial wind turbines forced to pay higher utility bills and higher(the farmers chose LLCs because they After negotiations, the farmers signed a production costs.allowed them to maximize their ability 15-year contract with Alliant Energy to purchase the electricity. There is so According to the U.S. Energy Informationto take advantage of tax credits and other much local interest in the project that Administration, natural gas prices todayincentives). more Minwinds are planned. For more are in the range of $5 to $6 per MMBtu.Sixty-six investors purchased all available information, visit According to Ed DeMeo, president ofshares in 12 days. The companies had Renewable Energy Consulting Services, gas industry analysts expect prices to beWind Energy vs. Conventional Energy high for a number of years because the demand for gas continues to rise and new production is not keeping pace. At theseWind energy is “homegrown” energy that the state average (based on 1995 data). The prices, the fuel-cost component alone for aproduces no air or water emissions. It task force concluded that a commitment toalso makes the homeland more secure by developing wind power in Nebraska could kilowatt-hour generated in most gas plantsreducing our dependence on foreign energy help counteract these trends in rural areas. exceeds the total cost of a kilowatt-hoursources. Local wind energy can also ensure By contributing to utility-grade power generated by a modern wind plant.that dollars earmarked for conventional generation, wind power can extend non- “A utility with both gas and wind plantsenergy remain in the community. In renewable energy sources, helping to secure can use wind energy when it’s available,2001, a study conducted by the Nebraska our energy future, stabilize energy costs, and back off on the gas plant during thoseWind Energy Task Force found that while reduce our dependence on foreign energy. periods, and then ramp up the gas plantNebraska spent $113 million on imported For these reasons, rural utilities are looking to maintain total system output whencoal in 1998, the state’s ten windiest for ways to diversify their energy portfolios the wind dies down,” DeMeo said. “Thecounties experienced a median income 21% and partner in utility-grade wind power savings in gas resulting from the windlower and a poverty rate 4% higher than generation (See “The People Want Wind plant operation can more than cover the Energy,” facing page). total wind plant costs, and the gas plant can maintain system reliability when the wind Diversifying energy portfolios with wind is fluctuating or not blowing. Total-system energy also makes good economic sense. operating costs are reduced, total-system In 1979, wind energy cost 40 cents per environmental emissions are reduced, and kilowatt-hour. In 2004, the cost per kilowatt- system reliability is maintained.” hour dropped to between 3 and 4.5 cents per kilowatt-hour, making wind energy Wind power has the potential to displace a competitive contender for electricity substantial amounts of natural gas generation. In fact, when the Colorado consumption, thus reducing upward Warren Gretz / PIX04082 Public Service Commission issued a ruling pressure on natural gas demand and prices. Corn Growers in 2001 on the 162-MW wind project in Lamar, Colorado, the commission Support Wind Energy determined that wind energy provided the In April of 2003, the American Corn lowest cost of any generation resource Growers Foundation commissioned submitted to a solicitation bid by Xcel a nationwide, random, and scientific Energy. The commission also determined survey of 500+ corn farmers in the that unlike the other generation resources 14 states representing nearly 90% considered, the Lamar project avoided a of the nation’s corn production. The future risk of increased fuel prices. poll found that 93.3% of the nation’s Wind energy provides yet another advantage corn producers support wind energy; over conventional fuels: conservation of 88.8% want farmers, industry, and our precious water resources. Conventional public institutions to promote wind power plants use large amounts of water power as an alternative energy to generate power from fossil fuels; source; and 87.5% want utility The Colorado Green Wind Farm won a solicitation bid wind turbines do not. That makes wind companies to accept electricity from to Excel Energy, proving that wind energy can provide energy a good choice for drought-stricken the most economical energy generation. (Craig Cox / wind turbines in their power mix. communities in rural America. PIX13052)
  6. 6. Minnesotans Export How Can I Bring Wind Energy to My Community?Crop of the Future • Learn more about the wind resource in your community. Access the latest state wind resourceto Cities maps at“There’s no (Dave Benson / PIX12479)question in • Learn more about Section 9006 of the 2002 U.S. Farm Bill and the Value-Added Producer Grantour minds that Program, which provide grants and loans for farmers and ranchers who install renewable energywe need to projects. Visit for more information.move towardrenewable • Determine the feasibility of a wind energy project in your community by accessing Windenergy, and Energy Finance (WEF), a free online cost of energy calculator that provides a quick, detailedwind energy economic evaluation of potential utility-scale wind energy projects. Visit windpoweringamerica and click on Wind Energy Finance Calculator. Dave Bensonis significantfor any community. This is one • Learn about the economic benefits of wind energy projects to your community by accessing theof the few bright spots in a rural Job and Economic Development Impact (JEDI) model, a free online easy-to-use tool that provideslandscape,” said Dave Benson, an approximation of the economic impacts to the local county and state that can be generatedfarmer and county commissioner from wind project development, during the construction phase and throughout the 20- to 30-yearof Nobles County, Minnesota. life of the project. Visit for more information.Wind energy generated in rural • Consider investing in a small wind turbine to help supply electricity for your farm or ranchareas can be connected to the operation. Visit the Wind Powering America Web site at for moreregional utility grid system and information on choosing the correct turbine size, assessing your wind resource, choosing the besttransmitted to other areas. Rural site for your turbine, and connecting your turbine to the utility grid. Many states offer incentives;leaders in Benson’s region are access the online DSIRE database at to determine which incentives may applyplanning a new transmission to your installation.line along I-90 that will bringwind energy to the Twin Cities.The region currently generatesabout 360 MW, but the rural Although integrating wind energycommunities can only use 50- into the energy portfolio mix may60 MW. sound like a futuristic concept, harnessing the power of the“We need a line to export this wind is hardly a new idea. Smallnew crop,” Benson said. “And turbines on individual farmswe’re educating the community to and ranches were commonplacebe partners in owning the means before the advent of ruralof production. Our hope is that electrification. Wind projects inthe local communities benefit.” rural America may be a return to the past that could help preserve rural communities and the family farm. Making a living on the family farm has never been easy, but harnessing wind energy as the cash crop of the future is a viable way to ease the financial burdens of farmers, ranchers, and rural communities and preserve the rural way of life. For more information contact: EERE Information Center 1-877-EERE-INFRural communities in Nobles County, (1-877-337-3463)Minnesota, plan to sell their excess wind Wind energy is part of rural America’s past and future. (NMPP Energy / PIX11062) (Corey Babcock / PIX10629) Printed with a renewable source ink on paper containing at least 50% wastepaper including 10% postconsumer waste.
  7. 7. Resources American Corn Growers Foundation Wealth from the Wind Program U.S. Department of Energy 1730 M Street NW, Suite 911 Wind Energy Program Washington, DC 20036 Forrestal Building (202) 835-0023 1000 Independence Avenue, SW Washington, DC 20585 Windustry 2105 First Avenue, South National Renewable Energy Laboratory Minneapolis, MN 55404 National Wind Technology Center (800) 946-3640 1617 Cole Boulevard Golden, CO 80401 (303) 384-6979 Utility Wind Interest Group P.O. Box 2671 Springfield, VA 22152 American Wind Energy Association (703) 644-5492 122 C Street NW, Suite 380 Washington, DC 20001 (202) 383-2500 National Wind Coordinating Committee 1255 23rd Street NW, Suite 275 Washington, DC 20037 (888) 764-WIND A Strong Energy Portfolio for a Strong America Energy efficiency and clean, renewable energy will mean a stronger economy, a cleaner environment, and greater energy independence for America. Working with a wide array of state, community, industry, and uni- versity partners, the U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy invests in a diverse portfolio of energy technologies. DOE/GO-102004-1826 • Revised August 2004 Printed with renewable-source ink on paper containing at least 50% wastepaper, including 20% postconsumer waste.