Jobs and Economic Development from New Transmission and Generation in Wyoming Eric Lantz and Suzanne Tegen NREL is a national laboratory of the U.S. Department of Energy, Office of Energy Efficiency & Renewable Energy, operated by the Alliance for Sustainable Energy, LLC. Technical Report NREL/TP-6A20-50577 March 2011 Contract No. DE-AC36-08GO28308 Jobs and Economic Development from New Transmission and Generation in Wyoming Eric Lantz and Suzanne Tegen Prepared under Task No. WTQ1.1000 NREL is a national laboratory of the U.S. Department of Energy, Office of Energy Efficiency & Renewable Energy, operated by the Alliance for Sustainable Energy, LLC. National Renewable Energy Laboratory Technical Report 1617 Cole Boulevard NREL/TP-6A20-50577 Golden, Colorado 80401 March 2011 303-275-3000 • www.nrel.gov Contract No. DE-AC36-08GO28308 NOTICE This report was prepared as an account of work sponsored by an agency of the United States government. 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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/help/ordermethods.aspx Cover Photos: (left to right) PIX 16416, PIX 17423, PIX 16560, PIX 17613, PIX 17436, PIX 17721 Printed on paper containing at least 50% wastepaper, including 10% post consumer waste. Acknowledgments This report was commissioned by the Wyoming Infrastructure Authority (WIA) and jointly funded by the WIA and the U.S. Department of Energy (DOE) State Technical Assistance Program. A special thanks to Loyd Drain, executive director of the WIA, for supporting this work throughout. In addition, the authors would like to thank each of the local, state, and industry representatives who were interviewed for this study or otherwise contributed to the development of the data that were used in this analysis. Thanks also to our colleagues who provided review and comments on earlier drafts of this report including Marshall Goldberg (MRG & Associates), David Taylor (University of Wyoming), Delphine Hou (the Brattle Group), David Kline (NREL), Gail Mosey (NREL), and Lynn Billman (NREL) as well as our NREL technical editor, Mary Lukkonen. Of course any remaining errors or omissions are the sole responsibility of the authors. iii Executive Summary Wyoming is a significant energy exporter, producing nearly 40% of the nation’s coal and 10% of the nation’s natural gas (EIA 2010a). However, opportunities to add new energy exports in the form of power generation are limited by insufficient transmission capacity. This report is intended to inform policymakers, local government officials, and Wyoming residents about the jobs and economic development activity that could occur should new investments in transmission, wind generation, and natural gas generation in Wyoming move forward. The analysis and results presented here are not a market projection or a forecast. Instead, the report uses a representative deployment scenario and economic modeling tools to estimate the jobs and economic activity likely associated with these projects if or when they are built. New infrastructure projects considered in this analysis include four high voltage (HV) transmission lines designed for export of electricity out of Wyoming and a network of transmission lines that collect new power generation before export outside the state. The scenario considered here also includes 9 GW of new wind power and 1.8 GW of new natural gas power. This infrastructure is estimated to result in more than $25 billion invested during construction and approximately $380 million invested per year of operations (once all new capacity is in service). The Wyoming share of these investments is estimated at approximately 19%–26% of the total construction investment and 31%–34% of the annual operations period investment. Given today’s economic structure, the investments flowing through the Wyoming economy are estimated to support: • An average (as opposed to peak) of 4,000–5,900 Wyoming jobs per year for 10 years from construction-related activities; 8,000–14,000 Wyoming jobs annually during peak construction activity • Wages and benefits to Wyoming workers averaging $200 million–$330 million per year during the 10-year construction period • 2,300–2,600 Wyoming jobs during the operational period of the infrastructure lifecycle (at least 20 years, based on typical financing for new wind power projects) • Wages and benefits ranging from $100 million–$120 million per year during operations • Economic activity (output) of $1.2 billion in 2016 and $1.4 billion in 2019 (during peak construction) and $380 million per year during operations-only years • Total Wyoming economic output on the order of $12 billion–$15 billion (construction plus 20 years of operations); this represents approximately 30% of the total potential economic activity associated with these projects. Whether this economic potential is ultimately realized or not will depend on a variety of factors. Demand for Wyoming wind energy is critical, but the development of the new transmission infrastructure to export the Wyoming wind and natural gas generation across the West is also important. In addition, should the deployment scenario presented here become a reality, an array of factors will influence whether Wyoming will ultimately capture this level of economic activity. Parallel deployment of wind, transmission, and natural gas generation could limit Wyoming’s ability to contribute local goods and services to these projects at the level they have iv been able to for individual projects in the past and reduce the Wyoming specific economic activity estimated here. Alternatively, the development of a Wyoming labor force that can support this type of infrastructure development, along with a modest amount of Wyoming manufacturing capacity to support these types of projects, could greatly increase the economic activity occurring in Wyoming from these projects. v Table of Contents List of Figures ........................................................................................................................................... vii List of Tables ............................................................................................................................................ viii Introduction ................................................................................................................................................. 1 Methodology ................................................................................................................................................ 3 Background ................................................................................................................................3 Analysis-specific Methodology .................................................................................................4 The Infrastructure Deployment Scenario ................................................................................................. 7 Total Jobs and Economic Development Activity ..................................................................................... 9 Summary of Total Results .......................................................................................................14 Wind Generation ....................................................................................................................................... 15 Modeling Inputs .......................................................................................................................18 Wind Generation Results .........................................................................................................23 Natural Gas Generation ............................................................................................................................ 27 Modeling Inputs .......................................................................................................................27 Natural Gas Generation Results ...............................................................................................29 High Voltage Transmission ...................................................................................................................... 33 Modeling Inputs .......................................................................................................................34