California’s Wind Farm Economy and the PTC
As media coverage surrounding the renewal of the production tax credit for wind (PTC) intensifies, two key reports from the Natural Resources Defense Council highlight the economic value of our domestic wind energy industry. Together, the two reports—American Wind Farms and At Wind Speed—make a strong case for extending the PTC for wind based job creation and its injection of capital into local economies.
According to American Wind Farms, each wind farm producing 150-250-MW of electricity generates nearly 1,100 jobs over its lifetime and provides roughly half the power of an entire coal-fired plant. A single wind turbine is a massive piece of machinery outfitted with sophisticated components. Approximately half of the 1,100 jobs are provided by on-site construction of wind turbines that reach 30 stories tall with rotating blades up to 50 yards long. With 67 percent of wind turbines sourced domestically, much of the job creation occurs away from the wind farm in manufacturing plants where workers produce the towers, blades, drive trains, wires, concrete, and other components that make up the final product. The remaining jobs are diverse, ranging from professionals in legal, electric, engineering, transportation, sales, and environmental assessment firms among others. Overall, the American wind industry employs 75,000 workers – close to the number of workers making up the entire American coal mining industry. Half of these wind sector jobs are at risk if Congress fails to extend the PTC.
NRDC’s other report, At Wind Speed, points out the economic benefits to communities hosting wind farms in Illinois, Iowa, Ohio and Oregon. In Sherman County, Oregon, for example, per capita income tripled after wind farm development began in 2002. In Livingston County, Illinois, each wind turbine brings in an average of $8,000 per year for landowners.
While wind energy in the Midwest draws most of the attention, it turns out to be a major industry in California as well. The first wind farms in the U.S. started to spin in the Altamont Pass in the early 1980s. In 2011, California installed more wind turbines than any other state. Wind energy supplies 5 percent of California’s total electricity needs and powers more than 400,000 households. The state’s wind industry employs between 4,000 and 5,000 workers mainly in the Altamont Pass, Tehachapi Pass, San Gorgonio Pass, and Solano County. The PTC is especially important for helping California meet its renewable portfolio standard of 33 percent by 2020.
Like the counties profiled in At Wind Speed, Solano County is deriving benefits from wind production for its agricultural communities. Although well-accustomed to the vigorous wind patterns on their lands, hay farmers and sheep ranchers in the Montezuma Hills area of Solano County had never considered harvesting this resource. Now, an odd but lucrative juxtaposition of sheep and 30-story wind turbines has transformed the economic landscape of the region. The EDF Renewable Energy Shiloh II wind farm in Solano County provides clean energy to 74,000 PG&E customers on a yearly basis. Construction of the wind farm in 2008 created 300 construction jobs and injected $50 million into the local economy. The wind farm generates $3 million a year in property tax revenues for the county, and construction of the Shiloh III wind farm paid $27.4 million in wages for 487 jobs.
Neither the landowners nor their sheep seem to mind the imposing stature of these turbines. Although the wind farms in the Montezuma Hills span over 6,000 acres, 98 percent of the land is untouched. Herds of sheep can safely graze right up to the base of the towers. Landowners have signed 30-year leases with project developers and receive royalties for use of their property without compromising their agricultural activity.
Historically, Solano County has relied heavily on the wealth and employment provided by natural gas production. However, after 65 years of intense drilling, economic activity associated with the Rio Vista gas field is drying up. As jobs in this sector are disappearing wind industry jobs represent a strong source of employment. Recognizing the need for skilled labor in the region’s burgeoning wind industry, wind developer EDF Renewable Energy (formerly enXco) donated $150,000 and two retired turbines to Rio Vista High School to improve an existing Green Jobs Education Program. Since 1995, employment in the fossil fuel sector in Solano County has seen little growth while jobs in clean energy and transportation have increased by more than 72 percent.
All these economic benefits are clear to the business community which has embraced the wind sector in states like Iowa, Colorado, and Oklahoma. In November of 2011, a nonpartisan coalition of 369 members including the United Steelworkers, Western Governors’ Association, and the National Association of Manufacturers issued a letter endorsing a 4 year extension of the PTC. In February of this year, the U.S. Chamber of Commerce voiced support for the PTC.
Wind energy provides clean energy to power homes all across America while generating gainful employment across many sectors and contributing significant revenue to local communities. To foster this nascent energy source as we have for other emerging fuel sources, it is of critical importance that our lawmakers vote to extend the production tax credit.