Economic Development Benefits from Wind Energy in Nebraska: DE-AC36-08-GO28308 a Report for the Nebraska Energy Office (Revision) 5B
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Technical Report Economic Development Benefits NREL/TP-500-44344 from Wind Power in Nebraska: Revised June 2009 A Report for the Nebraska Energy Office E. Lantz Technical Report Economic Development Benefits NREL/TP-500-44344 from Wind Power in Nebraska: Revised June 2009 A Report for the Nebraska Energy Office E. Lantz Prepared under Task No. WER9.8501 National Renewable Energy Laboratory 1617 Cole Boulevard, Golden, Colorado 80401-3393 303-275-3000 • www.nrel.gov NREL is a national laboratory of the U.S. Department of Energy Office of Energy Efficiency and Renewable Energy Operated by the Alliance for Sustainable Energy, LLC Contract No. DE-AC36-08-GO28308 NOTICE This report was prepared as an account of work sponsored by an agency of the United States government. Neither the United States government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States government or any agency thereof. The views and opinions of authors expressed herein do not necessarily state or reflect those of the United States government or any agency thereof. Available electronically at http://www.osti.gov/bridge Available for a processing fee to U.S. Department of Energy and its contractors, in paper, from: U.S. Department of Energy Office of Scientific and Technical Information P.O. Box 62 Oak Ridge, TN 37831-0062 phone: 865.576.8401 fax: 865.576.5728 email: mailto:[email protected] Available for sale to the public, in paper, from: U.S. Department of Commerce National Technical Information Service 5285 Port Royal Road Springfield, VA 22161 phone: 800.553.6847 fax: 703.605.6900 email: [email protected] online ordering: http://www.ntis.gov/ordering.htm Printed on paper containing at least 50% wastepaper, including 20% postconsumer waste Acknowledgements The author would like to thank the following individuals for their support and assistance throughout the course of this work: Larry Flowers, director of the National Renewable Energy Laboratory’s (NREL’s) Wind Powering America program, for funding and supporting this analysis; Michael Milligan (NREL) for analytical support and review; and Suzanne Tegen (NREL) for reviewing early versions of this report. As well, thanks to John Hansen of the Nebraska Farmers Union for sharing the nuances of the wind energy market and policy landscape in Nebraska and Ken Lemke of the Nebraska Public Power District for reviewing the final report. Authors note on the updated report This updated report has been issued because the prior version mislabeled the equity payments shown in Table 2. Data were labeled as total equity payments while in reality these values represented the annual equity payments (from operating the total installed capacity expected under each scenario). In order to accurately reflect the total equity payments, these values should be increased by a factor of 20 to account for the expected operating lifetime of each wind facility. Because these data were mislabeled, this also resulted in the miscalculation of the reported annual equity payments noted on page 16 of the prior report. Rather than issuing this updated report with the updated values for the equity payments, further reflection has led the author to remove all reporting of equity payments. This decision was made because it was determined that this metric is not adequately explained in the body of the report and the author believes that removing these values from the reported data will reduce confusion when interpreting the results. Please be aware that this update does not affect any other totals or values reported in the work. One category of data was merely mislabeled in the final results so all other results remain as they were originally reported. E. Lantz iii Table of Contents Report Summary.................................................................................................................................. 1 Wind Power: A Growing and Maturing Industry with a Role for Nebraska ................................ 3 Quantifying Nebraska’s Economic Development Impacts .............................................................. 4 Classifying Economic Development Impacts .................................................................................... 4 Methodology Overview ..................................................................................................................... 5 Construction-Period Results .............................................................................................................. 8 Operations-Period Results ............................................................................................................... 10 Total Economic Impacts .................................................................................................................. 13 Analysis and Conclusions .................................................................................................................. 13 Bibliography ....................................................................................................................................... 17 Appendix I: Detailed Modeling Methods...................................................................................... AI-i Appendix II: Supplemental Discussion ....................................................................................... AII-i Wind Energy and Public Power Expanded .................................................................................. AII-i Modeling and Analytical Considerations ................................................................................... AII-ii Manufacturing and Economic Development ............................................................................ AII-iii Caveat ....................................................................................................................................... AII-iii Appendix III: JEDI Model Inputs .............................................................................................. AIII-i Appendix IV: Detailed Results for Traditional Low and C-BED High scenarios (1,000 MW and 7,800 MW) ............................................................................................................................. AIV-i List of Figures Figure 1. Direct, indirect, and induced construction period jobs from 7,800 MW of wind energy construction in Nebraska (For a summary of key assumptions associated with individual scenarios, see Table 1) ........................................................................................................................................................ 9 Figure 2. Short-term jobs supported by manufacturing and construction of 1,000 MW of wind power in Nebraska .......................................................................................................................................................... 10 Figure 3. Direct, Indirect, and Induced long-term jobs from operating wind power plants built in accord with the 20% Wind Energy by 2030 report; up to 7,800 MW. ......................................................... 11 Figure 4. Annual economic output from operating wind power plants built in accord with the 20% Wind Energy by 2030 report; up to 7,800 MW. ............................................................................................. 11 Figure 5. Long-term jobs resulting from operations of 1,000 MW of wind power .................................... 12 Figure 6. Annual economic output from operations and maintenance at wind power plants ................ 12 List of Tables Table 1. Summary of Analytical Scenarios ..................................................................................................... 7 Table 2. Summary of Lifetime1 Impacts ........................................................................................................ 13 Table 4. Capacity Factors and Cost Inputs* .................................................................................................... i Table 5. Landowner and Property Tax Payments ........................................................................................... i Table 6. C-BED Modeling Implications ............................................................................................................. i Table 7. Percentage of Project Expenditures Directed to Nebraska ............................................................ ii iv Report Summary Wind power constituted more than 35% of new U.S. electric generating capacity in 2007. Common drivers of wind power include Renewable Portfolio Standards (RPS), the federal production tax credit (PTC), and rural economic development benefits. Continued expansion of the wind industry into Nebraska would bring new employment and economic development to Nebraska and the country. This report by the National Renewable Energy Laboratory (NREL) focuses on the economic development impacts that would result in Nebraska from development and operation of wind power in the state as envisioned in the U.S. Department of Energy’s (DOE’s) report