How do corporate wind deals benefit local communities?
by Anna Hofmann
February 12, 2019
More than ever, companies are looking to power their businesses using wind energy. Across the world, companies more than doubled the renewable energy contracts they signed between 2017 and 2018. And here in the U.S., 2018 was a record year for non-utility wind power deals. Altogether, non-utility buyers in the U.S. have contracted for more than 10,000 megawatts (MW) of wind energy to date, more than the entire installed capacity of Iowa, the country’s number two wind state.
Why are they looking to wind? Because costs have fallen by 69 percent since 2009, wind is the cheapest source of new electricity in many parts of the country. Plus, because wind doesn’t use fuel, it’s insulated from costly and unexpected price spikes. That increases stability, an attractive quality for businesses that like to plan for the long-term.
But this isn’t just a story about business decisions. As companies power up with wind, they also create far-reaching benefits and economic development opportunities in towns across the U.S. hosting wind farms and the facilities they power.
“Iowa’s renewable energy expansion isn’t just about electricity. It’s also an important economic development tool, helping attract major technology companies like Facebook, Google and Microsoft while keeping costs low for existing industries,” Iowa Gov. Kim Reynolds has explained. “We’ve found that renewable energy distinguishes Iowa from other industrialized states competing for projects. That’s why we don’t just mention wind energy on recruitment trips — we lead with it”.
It’s clear that states that make it easy to buy renewable energy have a competitive edge over others when attracting corporate investment.
What do the community benefits of non-utility wind deals look like? Case studies of wind farms with corporate investments in Nebraska, Texas and Oklahoma provide good examples. We examined the following projects:
FACEBOOK: RATTLESNAKE CREEK WIND PROJECT
In 2017, Facebook made a deal to purchase 320 megawatts (MW) from the Rattlesnake Creek Wind Project, owned by Enel Green Power North America Inc. in order to power its Papillion, Neb. data center. The project is largely possible because of Omaha Public Power District’s (OPPD) creation of a tariff that allows the corporation to purchase renewable energy, enabling Facebook to move toward its goal of powering its global operations with renewable energy by 2050. The tariff allows companies to directly source renewable energy from specific wind projects in OPPD’s service territory.
AT&T: AT&T WINDSTRONG ENERGY CENTER WEBB AND DUVAL COUNTIES
In 2018, AT&T signed a power purchase agreement (PPA) with NextEra Energy Resources for 300 MW of wind power from the AT&T Windstrong Energy Center in Webb and Duval Counties in Texas. This project, one of four wind farms with AT&T PPAs signed in 2018, is part of the company’s goal to enable carbon savings equivalent to ten times the footprint of its operations by 2025. While these were AT&T’s first major purchases of renewable energy, they made the company the second largest corporate purchaser of U.S. renewable energy in 2018.
GOOGLE: MINCO II WIND FACILITY
Back in 2011, Google signed an agreement to purchase 100.8 MW of power from NextEra Energy Resources’ Minco II wind farm. The PPA is for 20 years and supplies electricity to Google’s Mayes County data center located in Pryor, Okla. This power purchase is part of Google’s initiative to power its global operations with renewable energy, a goal the company met in 2017. Google announced that one of the top reasons the company chose Mayes County as the location for its new data center was the opportunity for renewable energy procurement and suitable infrastructure.
Corporate purchases of wind energy are not just adding electricity to the grid in rural America, they are making investments in the local community. The case studies reviewed show the wide range of benefits, from new jobs to non-profit donations or college scholarships, that communities have seen from corporate investment.
Property taxes are an important tool for renewable energy projects to benefit the surrounding community. Tax payments are often used to fund school districts, libraries, emergency services, or build roads and bridges. Rattlesnake Creek Wind Project will generate tens of millions of dollars in property taxes over the first 20 years of its existence. AT&T Windstrong Energy Center in Webb and Duval Counties is expected to pay approximately $60 million in property taxes over the project lifetime.
Because 99 percent of wind turbines are built in rural areas, landowners and farmers are taking advantage of the opportunity to lease their land and receive a steady source of income over the project contract. This can help protect the farm from fluctuations in commodity prices or poor crop yields during drought years. Turbines have minimal impact on farming practices and farming can continue nearly right to the base of the turbine. The Rattlesnake Creek Wind Project has over 100 local landowners involved in the project that will collectively receive tens of millions of dollars from the project over the first 20 years of the project life. NextEra’s Webb and Duval Counties project will pay approximately $60 million in lease payments to landowners over the project lifetime.
Enel’s Rattlesnake Creek Wind Project created 300 jobs during the construction period and more than a dozen full-time workers. Facebook’s data center in Papillion employs more than 1,000 construction workers and expects to employ over a hundred long-term employees to operate the data center. Many of these positions have already been posted on Facebook’s data center page, and these jobs are available in the community because of Nebraska’s wind resources.
AT&T’s project is expected to create 250 jobs during construction and up to 15 full-time jobs.
As of February 2018, Google’s Mayes County data center campus employed over 400 workers. Roger Harris, on the Hardware Operations team, started as a construction worker at the Mayes County data center and later accepted an internal position with Google.
“Now I take care of the infrastructure that allows Google to do what it does,” Harris said. “I love the fact that I work for a company that truly wants to make the world a better place and make information accessible to all.”
The mayor of Pryor Creek, Jimmy Tramel also touted the employment opportunities that Google provides saying, “It will impact our economy somewhere in the neighborhood of $150,000 to $200,000 per year for the next couple of years, just based on the part-time workers and the sales tax they bring in. Moreso than anything, it brings people here to live. They are good-paying jobs…They are a huge part of the community and I mean that in every aspect”.
AT&T and Google’s investment in nonprofits and schools are two examples for other corporate purchasers of how to create a lasting partnership with a host community. AT&T created a Wind Energy Scholarship fund for students earning a wind energy degree or certificate at Texas State Technical College. The scholarship is open to students who are from counties in Texas that host wind farms with AT&T contracts. NextEra Energy Resources, owner of the wind farms, commits to interview graduates from the program for available technician and intern positions.
“We welcome the opportunity to educate, expose, and equip our students with dynamic skill sets stemming from the benefits of a career in renewable energy,” said Beto Gonzalez, superintendent of Webb Consolidated Independent School District. “We are grateful to both NextEra Energy Resources and AT&T for their generous contributions to establish one of the nation’s first high school wind energy programs and for creating a new and exciting career path for our students.”
Google has awarded grants to Boys and Girls Clubs of Green Country, a local Boy Scout troop, the Philbrook Museum of Art, and schools ranging from elementary to Oklahoma State University.
Wind power is a low-carbon energy source–when a wind turbine generates electricity it produces zero carbon emissions. In 2017, the electricity generated from wind turbines across the U.S. avoided an estimated 189 million tons of carbon pollution, roughly equal to 11 percent of 2017 power sector emissions. Wind also helps cut significant amounts of air pollution that creates smog and triggers asthma attacks, creating $8 billion in public health savings in 2017 alone.
Facebook’s investment in the Rattlesnake Wind Farm will help avoid about 940,000 tons of carbon dioxide emissions each year. AT&T Windstrong Energy Center will help avoid more than 888,822 metric tons of carbon dioxide emissions each year, equivalent to taking 190,326 cars off the road.
Rural communities in windy states like Nebraska, Texas and Oklahoma have a distinct advantage when offering corporate purchasers opportunities to buy clean energy and fulfill sustainability goals. But as many decision makers have acknowledged, providing mechanisms for companies to buy low-cost renewable energy is key to attracting this development. That in turn will benefit local families and businesses as wind projects bring new jobs and revenue to communities across the country. That’s a win-win for everyone.