Locally-Owned Wind Projects

Wind Power is Good for Our Economy

The Ontario Power Authority (OPA) awarded long-term power purchase contracts to five companies for the construction of six new wind projects throughout the province. These projects total 492.1 megawatts (MW) of renewable energy, providing enough electricity to power more than 120,000 homes when they become operational by the end of 2012.

In terms of job creation, these projects are expected to create about 1,132 direct jobs (i.e. jobs related to installing the actual wind turbines and associated infrastructure) and about 1,090 indirect jobs (i.e. jobs related to the manufacturing of building materials and provision of services such as engineering design, legal, accounting and real estate) for a total of 2,222 jobs.

In addition, the landowners who host windmills will receive a combined $3 million per year in land lease payments and the communities hosting these projects will see their municipal tax take increase by a total of $1 million (OPA, 2009).

Community Owned Wind Power is Better

One important factor that the OPA's announcement didn't touch on is that of the five companies awarded the six power supply contracts, only two are based in Ontario with the remaining three companies (which account for 4 of the 6 wind projects) being based in either Québec (1) or the U.S. (2). The fact that none of these projects will be owned by local communities or First Nations may not seem significant at first, but it is.

In economic terms, it is significant because studies have consistently shown that local economic development benefits are greater for projects that are owned by the members of the local community as opposed to large non-local corporations.1 As M. Costanti (2004) concluded in a National Renewable Energy Laboratory report:

“The importance of local project ownership cannot be overlooked. Local project ownership can serve a key role in maximizing the local economic impacts of wind power...These increased benefits can be seen in higher job creation, worker pay, local project value, local spending, as well as project returns.”

In more practical terms, the money that landowners (often farmers) receive as lease payment varies between $2,000 and $5,000 ($US) per windmill, per year. But, by purchasing the windmill, the landowner would be able to double or triple their income (GAO, 2004).

Landowners and/or local community members can also choose to pool their resources to develop and jointly own a larger wind project. One way of doing this is to form a community wind power co-operative (coop). Financing can then occur through a share offering to the local community. The co-op is then governed by a one member/investor, one vote system (regardless of the size of individual investments) to ensure democracy within the coop.

Locally-owned projects are often much smaller than the six corporate projects discussed above (the largest being 101.2 MW), generally not exceeding 20 MW. As such, approx. 25 of these 20 MW community power projects would be required to provide the same 492 MW delivered by the 6 large corporate projects. While this might seem like an inefficient way to get the same amount of renewable energy on the grid, it actually offers a number of benefits over the large-scale approach:

What's Stopping Community Wind?

Interest in community wind is strong in Ontario as is evidenced by the growing membership of the Ontario Sustainable Energy Association which includes many individuals Co-operatives, First Nations, Municipalities, Schools, Industry Associations and Farmers organizations.

That said, there are still many barriers to developing a community wind project. These include:

These barriers are significant but they have been successfully addressed in other jurisdictions through strong enabling legislation and government support. Ontario's new Green Energy Act goes a long way toward addressing these barriers but more needs to be done in terms of making it easier for community groups to access financing for their projects, and to build the capacity of these groups so that they can develop wind projects either on their own or in partnership.

Ontario's Green Energy Act

References

Costanti, M. 2004. Quantifying the Economic Development Impacts of Wind Power in Six Rural Montana Counties Using NREL’s JEDI Model. Golden, Colorado: National Renewable Energy Laboratory, September 2004. p. 21.

OPA. 2009. New Green Energy Projects Generate More Green Jobs. http://www.powerauthority.on.ca/Page.asp?PageID=122&ContentID=6791. January 23, 2009.

United States Government Accountability Office (GAO). 2004. Wind Power’s Contribution to Electric Power Generation and Impact on Farms and Rural Communities. Report to the Ranking Democratic Member, Committee on Agriculture, Nutrition, and Forestry, U.S. Senate (GAO-04-756). September 2004. p. 6.

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