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MINNESOTA’SWINDS OF PROGRESS
HOW OUR WIND ENERGY INDUSTRY CAN CONTINUE GROWING
Nathan PaineMinnesota 2020 Fellow July 2009
Table of Contents___
Executive Summary 1Introduction 6Estimating Wind Projects’ EconomicImpact 8Results 16Discussion & Policy Implications 18Assessing Competing Views on WindSubsidies 21Appendix 29References 32
Minnesota’s Winds of Progress 1
Executive Summary___________________
When placed in the most opmal locaon, with the proper investment, research and development, windfarms can create thousands of jobs, revive the economic base of many Minnesota communies hit hard bythe recession and help the United States become more energy independent. Already, Minnesota is amongthe leading states for wind energy, with about 1800 Mega Was of installed capacity, enough to power up to450,000 homes, according to Alliant Energy.
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Only Texas, Iowa and California rank ahead of Minnesota when itcomes to installed capacity so far.Since 2005, Minnesota has been dramacally increasing its wind capacity, growing by about 31 percent everyyear. This is due in large part to federal subsidies known as producon tax credits (PTC).Minnesota is in a goodposion to capitalize onthis advantage for severalreasons, including thestate legislature’s mandatethat ulies purchase orgenerate 25 percent of theirpower from renewableresources by 2025 (30percent by 2020 for XcelEnergy).This Renewable EnergyStandard (RES) has thepotenal to increase thestate’s wind power capacityby about 4,000 MW (1million homes), which would create up to 2,200 new jobs during the 17-year construcon phase and morethan 900 sustained jobs during the wind farms lifeme operaons. These numbers would only grow as thestate reached beyond the 25 percent minimum RES.Construcon of 4,058 MW of wind power would pump nearly $9 billion into Minnesota’s economy over a 17year period. Operaon costs would propel another $1.5 billion annually into Minnesota’s towns.A good poron of the jobs created would be in the manufacturing sector, an industry hit especially hardduring this economic slowdown. Employment in fabricated metal producon—a key component of windturbines—fell by 10 percent since the start of the recession. These lower skilled jobs are also less venerable tooutsourcing in wind producon because of the high cost associated with transporng wind blades and otherheavy components.Minnesota is also posioned well when it comes to the number of industries already producing componentsnecessary for wind producon. The state ranks 13th in the number of workers already in related industries and14th in the number of actual companies engaged in related manufacturing processes. Duluth-based NorthstarAerospace, an airplane parts manufacturer, had to lay o most of its 115 workers when its main customer,
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