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Something Old, Something New: Wind Power and Economic Development

Dale Winling


Attempts to harness the power of the wind date back for centuries.  Denmark and Holland are famed for their centuries-old windmills, etched into our cultural memory by artists like Rembrandt and Renoir; farmsteads throughout the United State plains display the remnants of once-functional gristmills and water pumping mills; one of Frank Lloyd Wright’s earliest and most enduring structures is ‘Romeo and Juliet,’ a windmill for his aunts’ rural Wisconsin school.

Though the exploitation of wind for energy purposes declined through the 1960s, in latter decades the shift to developing alternative energy sources has produced a revitalization of wind energy production.  Particularly since the energy crisis of the 1970s, energy production from wind has seen a great deal of investment, though its profile has only recently reached any mainstream currency.  Despite this modest renaissance following long-term decline of wind resources, the potential of wind to provide energy to the electricity grid cleanly and competitively is becoming known through serious economic, engineering, and environmental research.


The Great Lakes region is now uniquely positioned to exploit the potential of wind because of the significant wind resources of the lakes.  The map to the right illustrates the wind potential of regions throughout the continental United States. (U.S. Department of Energy)

While the Rocky Mountain region and certain areas of Nevada, Arizona, and California all hold significant potential for wind energy production, the Great Lakes are the largest and potentially greatest source of wind energy on the eastern two-thirds of the United States.  While a handful of wind farms have been developed in the Midwest, wind remains a largely untapped resource in the Great Lakes region.  In comparison to the state of California, where federal tax credits spurred turbine construction in the 1980s, the state of Michigan is far behind in harnessing its wind potential.  Several recent counts put the difference between California and Michigan turbines at about 15,000 to 3.[i]

What economic benefit does wind energy hold for communities, consumers, and production companies?  In addition to the simple market value of the electricity produced, one must consider monetarizing the intangible benefits of wind energy.  These include the avoided costs of environmental pollution from fossil fuel energy sources and the avoided costs of developing new fossil fuel plants to meet increasing energy demand.[ii]   Thus, there are significant additional economic benefits realized through savings – not having to clean up or treat the harmful pollutants produced by fossil fuel plants.  Illustrating this, a recent study by the Izaak Walton League of America and corroborated by the Minnesota Department of Public Service, found that wind energy was actually a cheaper fuel source than natural gas-fueled power plants, the standard source for power generation today.[iii]  This means that companies can produce electricity more cheaply through wind, without the external costs of damage to the environment and health problems for nearby residents and communities.  In addition, the federal government has shown a commitment to developing and researching alternative energy sources.  Since 1992, the federal government has offered a Production Tax Credit to encourage the development and operation of alternative energy sources.  The PTC currently stands at 1.9 cents per kWh and applies to production within the first 10 years of a turbine or wind farm’s operation, increasing the cost competitiveness for wind energy.


How can Michigan communities use this new source of energy to promote economic development?  First, Toronto-based Windshare provides a model for grassroots wind energy development.[iv]  Local citizens formed a cooperative, which partnered with a local energy company to build a 750 kW, 94-meter tall turbine on the Toronto waterfront. Since it commenced operating in January 2003, the turbine has produced about 1400 MW of electricity per year, establishing a reliable cost for new energy introduced into the  power grid, and enabling a dividend to be paid to the member-owners of the cooperative.  Such community-based entrepreneurship may best be pursued along the west coast of Michigan’s Lower Peninsula, where wind potential is the highest.  In addition, the northern shore of the Upper Peninsula also holds high potential for wind energy.  (Figure 2)  Finally, a recent report by the Renewable Energy Policy Project (REPP), an industry advocacy group, indicates that 8,000 jobs might be created in the state of Michigan if the state's wind resources were developed to their potential. [v]

Michigan municipalities and even the state of Michigan may also consider the lead taken by European countries like Denmark and Spain, and recently even Canadian provinces like Quebec. These governments have developed cooperative agreements, established joint ventures, or simply signed contracts to purchase or produce and consume wind energy so that they can help control their energy costs for municipal buildings, holding the benefit of creating jobs in-state rather than contracting for energy produced out-of-state.

Another promising opportunity for the creation of wind energy is in coordination with farmers at the fringe of urban areas.  Transfer of Development Rights (TDR) programs have proved successful in helping preserve active agricultural land by separating development rights from ownership rights and compensating farmers for those development rights.  The additional revenue, which may be significant for a plot of land that could be subdivided for residential development, often enables farmers to keep farming and may help maintain ecological diversity in an area.  In a similar fashion, agricultural land is often a good match for potential wind sources for a number of reasons.  Farmers may lease small plots of agricultural land for the development of turbines, creating a revenue source while providing a site for turbines that minimizes environmental impact upon wildlife or humans.[vi]

There are, however, obstacles to the creation and implementation of wind energy resources, frequently related to the siting of turbines.  A recent study by the Government Accountability Office (GAO) concludes that bird deaths because of wind turbines is lower than had been popularly believed, while bat deaths are a more serious environmental concern.  Perhaps most importantly, the study emphasized differing regional concerns in siting and environmental impact.[vii]  Turbine blades may reflect sunlight throughout the surrounding area, disorienting wildlife and humans alike. In response to such concerns, turbine producers have developed less reflective coatings for turbine blades.

[i][i] Matthias Heymann“Signs of Hubris: The Shaping of Wind Technology Styles in Germany, Denmark, and the United States, 1940-1990.”  Technology and Culture, Vol. 39, No. 4. (Oct., 1998), pp. 641-670.

[ii] Robert Y. Redlinger, et al.  Wind Energy in the 21st Century: Economics, Policy, Technology and the Changing Electricity Industry.  (New York: United Nations Environment Programme, 2002): 85.

[iii] Ibid, 90.  The large-scale production can yield production costs as low as $.05/kWh.

[iv] (Accessed December 4, 2005)

[v] George Sterzinger and “Wind Turbine Development: Location of Manufacturing Activity.  Technical Report.  (Accessed December 4, 2005)

[vi] Christine Stebbins“Wind Turbines Pop Up On U.S. Farms.  (Accessed December 4, 2005)

[vii] “Wind Power: Impacts on Wildlife and Government Responsibilities for Regulating Development and Protecting Wildlife. (Accessed December 4, 2005)

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