Bureau of Business Research
Date of this Version
12-30-2014
Citation
Prepared for the Nebraska Power Association by Eric Thompson, director of the Bureau of Business Research.
Abstract
This study by the University of Nebraska-Lincoln Bureau of Business Research (UNL-BBR) explores the economic impact from the construction and operation of wind farms in Nebraska, focusing on those farms with 10 or more wind turbines. The study estimates: 1) the statewide economic and tax revenue impact of the Nebraska wind industry as it is currently configured, 2) the local economic and tax revenue impact of the existing industry in the counties where it operates and 3) the potential statewide economic impact from expansion of the industry through the addition of new wind farms.
Table ES.1 summarizes the impacts. Operation of existing wind farms supports an estimated 137 statewide jobs annually with $8 million in wages and salaries, $21 million in output and $6 million in tax revenues. A significant share of these state impacts occur outside of the county or counties where the wind farms are located.
Construction of existing wind farms began in 2003 and currently includes 10 wind farms, each with 10 or more turbines. Construction of these 10 farms generated almost 950 job-years statewide, with $54 million in wage and salary earnings, $132 million in output and generated $72 million in taxes. Local economic impacts were smaller.
Construction of proposed wind farms may create 636 job-years, $36 million in wages and salaries, $91 million in output and $1.9 million in tax revenues. Annual operations would produce smaller gains. 1
Economic impacts include both direct and total economic impact during construction and from operation. The direct economic impact during the construction period includes in-state employment and business activity from building wind farm facilities. The direct economic impact during operations include the annual wages and salaries, materials or service costs, fees, lease payments, tax payments and other costs incurred by wind farm operators. The total economic impact reflects the direct impact and also the multiplier impact on the Nebraska economy. The study also considers the tax revenue impact associated with wind farm construction and operation. The tax revenue impact includes the local taxes paid on wind tower capacity as well as relevant state and local income, sales and property taxes.
Estimates of future construction reflect a growth scenario based on wind capacity that will allow Nebraska utilities to meet (and partially exceed) stated goals for renewable energy use and meet additional demand for 80 MW of capacity from industrial customers who wish to utilize wind power as part of corporate goals.
All economic impact estimates represent increases in the Nebraska economy due to development and operation of wind power generation within the State of Nebraska. Utilities based in Nebraska have a wide variety of choices about where to obtain that power. In particular, utilities can purchase wind power generated in other states. The economic impact estimates reported in this study show the gains to the Nebraska economy from building and operating wind farms in the state versus the alternative of purchasing wind power generated in other states.