IMPACT OF RENEWABLE PORTFOLIO STANDARDS ON WIND INDUSTRY IN MICHIGAN

FOR IMMEDIATE RELEASE
December 13, 2007

CONTACT:
Catharine Hansford
517.432.8800 Ext. 111

ADOPTING RENEWABLE PORTFOLIO STANDARDS IN MICHIGAN WOULD BRING WIND INDUSTRY JOBS, ECONOMIC DEVELOPMENT

East Lansing--The economic impact of wind industry development as the result of Michigan adopting Renewable Portfolio Standards (RPS) would be significant says a new report released today by the Land Policy Institute (LPI) at Michigan State University.

The report, titled "Projected Impacts of Renewable Portfolio Standards on Wind Industry Development in Michigan," is the outgrowth of research lead by Soji Adelaja, institute director and John A. Hannah Distinguished Professor in Land Policy. The report is co-authored by Yohannes Hailu, institute associate director of Hannah Research Program.

The study predicts that wind energy in Michigan will have a significant economic impact. Based on a comparison of states that have and have not adopted RPS, the study found that there are significant differences in the levels of wind energy development across states as a result of RPS adoption. Michigan's current wind energy capacity is estimated to be 60 mega watts (MW). Considering factors that affect wind energy development nationwide, with the passage of RPS in Michigan, windmills installed in the state are expected to produce 5,668 MW by 2015, 13,509 MW by 2025, and 16,657 MW by 2025.

The study only considered Michigan jobs tied directly to the construction of windmills and their maintenance, focusing on jobs, investment, wages and earning, and land lease income tied to wind energy facilities. It did not include impacts from small wind systems and farm systems, implications to component manufacturers, or the secondary economic impacts in other sectors related to wind energy development. The potential increases in local property taxes and the potential jobs that can come from increased manufacturing of wind components in Michigan were also not considered. Currently, there are 25 component manufacturers in Michigan according to NextEnergy, an alternative energy think tank in Detroit, Michigan.

The study estimated that, with the passage of RPS in Michigan, wind energy development will produce:

• 1,100 construction jobs per year for the next two decades
• 218 permanent jobs related to the management and maintenance of wind installations by 2010
• 3,010 permanent, continuing jobs related to the management and maintenance of wind installations by 2029
• $1.25 billion per year in construction-related new investments and spending over the next two decades
• $464 million in continuous annual spending in maintenance and management by 2010 and $4.4 billion by 2029
• $21 million per year in new construction wages for the next two decades
• $7.6 million in permanent annual wages by 2010 and $96 million by 2029
• $4.8 million in lease payments to landowners per year by 2010 and $47 million per year by 2029

"Though the study did not look at local tax revenue impacts related to wind energy development," said Adelaja, "local tax revenue impacts will depend on how wind energy related properties are defined for tax purposes and will have significant effects if such properties are considered as real property subject to local taxation."

Currently, an estimated $18 to $20 billion is exported from Michigan to pay for fuel, coal, and other sources of energy to power the state. Michigan is currently considering RPS legislative adoption to boost renewable energy development in Michigan. This is expected to help Michigan retain more of its energy dollars.

"Results from our study recommend the adoption of RPS, with sound provisions, to foster significant wind energy development and associated jobs in Michigan," said Hailu. "The economic impacts of RPS legislation need to be considered by the legislature."

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Go to Projected Impacts of RPS on Wind Industry Development in Michigan White Paper to download a pdf of the report.