Catching the Wind: New report examines the impact of local vs. non-local hiring practices on construction of Minnesota wind farms

A new report published by North Star Policy Institute finds that hundreds of new family-supporting jobs and tens of millions of dollars in economic activity are at stake for Southern Minnesota communities based on imminent hiring decisions by wind energy companies and whether new projects are built by local or non-local workers.

Minnesota’s wind energy economy is booming. The state is eighth in the nation in net generation from wind energy. There are currently at least seven major wind farm projects seeking permits or in pre-construction in Southern Minnesota. These projects will generate an additional 1,400 megawatts in renewable power and add to Minnesota’s already impressive wind energy portfolio.

These seven projects and others in the pipeline have the capacity to create thousands of family-supporting construction jobs. Unfortunately, Southern Minnesota will miss out on many of the economic benefits of new wind farm construction if developers rely primarily on non-local construction workers. Unlike local workers, who spend their wages locally, non-local workers on wind projects typically take the wages they earn back home when they leave.

To better understand the consequences of using local versus non-local workers, the report analyzes the potential economic impact of seven major wind farm projects in Minnesota.

Findings

  • Using 50% to 70% local workers to build 1,400 megawatts of proposed wind generation is projected to generate $73 to $89 million in local economic activity.
  • Using 10% to 30% local workers to build the same wind energy facilities would generate approximately $41 to $57 million in local economic activity.
  • The difference in local economic output of a largely local (50-70%) versus non-local (10-30%) workforce would be approximately $32 million.
  • By including retirement benefits that will be spent down the road by local workers, the potential difference grows by approximately $13 million to $45 million.
  • For a region of the state that has historically lagged the rest of Minnesota in construction job creation and overall economic vitality, this is a particularly concerning loss in economic activity.

Recommendations

The following recommendations would help maximize the local employment and economic benefits of new wind projects.

  • First, to secure specific commitments from developers and engineering, procurement and construction (EPC) contractors to set local hire goals for new wind farm projects during the project approval process.
  • Second, to require regular reporting by developers on their use of local workers.
  • Third, to encourage collaboration with state-registered apprenticeship programs, which can help recruit and train local workers in skills needed to build wind energy facilities.

Through these modest proposals, we can assure efficient use of investments and maximize local benefits.

The full report is available here.