Blowin’ Through Texas: Local Wind Farm Economics

Does building a wind farm spur local economic development? In “State and Local Economic Impacts from Wind Energy Projects: Texas Case Study,” Michael Slattery and his co-authors enumerate the economic benefits of wind energy investment for communities near wind farms.  They find that local benefits can be substantial; but they vary with the ability of the local economy to take advantage of the new, specialized investment.

The study compares two wind farms in central Texas. One is located in an area that is significantly less densely populated than the other. The authors utilize the JEDI (Jobs and Economic Development Impacts) Wind model to estimate economic impacts from wind power development in four Texas counties. They find that wind farms created economic benefits for the local communities through job creation, local property tax payments, and landowner lease payments.

These benefits were significant, especially in the case of a preexisting local wind industry. A four-year construction period resulted in 4,100 full-time equivalent jobs.

The authors estimate the 20-year lifetime economic activity generated by the projects in the state to be more than $1.8 billion, or roughly $2.2 million per wind turbine installed.  About 2 of every 5 of these dollars remained in the local community, or $880,000 for every turbine. Roughly 1 in 5 construction jobs was filled by people within a 100-mile radius, compared with nearly two-thirds of operations and maintenance jobs (there were fewer such positions). However, wind farm development in more sparsely populated localities might experience heavier leakage of economic benefits to surrounding communities with larger resource bases and more services, as occurred in the study.

Taking advantage of the economic benefits associated with wind farm development requires both greater utilization of in-state manufacturing capacity and training of laborers for the wind industry. In order to ensure greater local participation in the economic benefits of wind farms, jurisdictions may need to look to manufacturing investment incentives and workforce development programs. Such policies could be effective in increasing impacts to states, but are not as likely to increase substantially the ability of rural counties—where projects are sited—to capture economic benefits.