Alberta wind energy host communities are seeing economic benefits right now and more can expect to in the future according to a recent study
October 2, 2018
Employment, new municipal tax revenues, plus stable income for farmers and landowners from land lease agreements offer opportunities for Alberta communities
Alberta is home to the workforce and training capacities needed to harness one of Canada’s best wind resources and meet its target of 30 per cent renewable electricity by 2030. According to a recent study, hitting this goal will result in significant social and economic benefits, like increased revenues for local municipalities, supplemental income for landowners and increased spending in the communities. These benefits are already being realized in and around communities such as Medicine Hat, Oyen and Pincher Creek.
In this blog, we will share the findings of the study and outline the benefits currently being realized by a municipality and landowners in the Pincher Creek area.
Revenues for local communities
Wind energy generation delivers municipal property tax revenue to Alberta municipalities. The Alberta Wind Energy Supply Chain report estimates that under a scenario involving 4,500 MW of new capacity from utility-scale wind farms by 2030, this would translate to about $25.5 million in annual revenue to Alberta municipalities.
For example, TransAlta’s 136-megawatt Summerview wind facilities (phase one became operational in 2004 and phase two in 2010), in the Municipal District of Pincher Creek, pay approximately $1.2 million in annual municipal taxes, about 11 per cent of the Municipal District’s entire property tax revenue of $13.8 million in 2017. This covers their police, fire, disaster, ambulance and bylaw enforcement budget in its entirety. In fact, according to their Taxation Information summary, 34 per cent of the MD’s tax revenues are generated from power generation facilities. This amounts to more tax revenue than the combined contribution of residences and properties (agricultural and non-agricultural), commercial and industrial tax categories.
Wind energy developments offer Alberta communities a more diversified property tax base which offers municipal leaders greater flexibility to improve services or lower taxes for local landowners and businesses.
Supplementing the incomes of landowners
Landowners hosting turbines on their property can supplement their farming and ranching income with “rent”, or a lease payment, from the wind farm operator. Because the average wind farm leaves 95-98 per cent of the leased land area undisturbed, farmers can collect these revenues with little to no impact on agricultural activities. In fact, according to the Alberta Wind Energy Supply Chain Study, landowners would collect an additional $13.5 million annually from hosting 4,500 MW of wind turbines supporting Alberta’s 30 per cent renewable generation target.
Dixon Hammond, a farmer who hosts three turbines in the Summerview wind facility on his property, commented: “It was some added income for us, and it actually made it so that we could purchase our home quarter from my dad. It gave us that feeling of satisfaction that we own our own land and are able to not have a major mortgage because of it. It’s important for me to have land for my family to live on and understand agriculture and the country way of life. It also makes me feel good when I look out and see those wind turbines turning. Basically it powers my farm. It is derived right off my land.” Together, landowners involved with the Summerview projects receive over $500,000 per year for hosting 61 turbines.
Wind energy spending within Alberta
As Alberta works to diversify the economy, Alberta will benefit from the contributions of many sectors to drive economic growth. The employment, spending and other spin off benefits from potential wind energy development can be a part of that equation, which supports Alberta’s economic diversification and community development.
The Alberta Wind Energy Supply Chain study estimates the economic opportunities driven by Alberta’s Renewable Energy Program to include an estimated $3.6 billion in local spending on project development and construction and $137 million per year for operations and maintenance. Additionally, 28,100 person-years of direct, indirect and induced employment would result.
When the two Summerview projects were constructed, close to $12 million was injected into the local economy and the services of 28 local contractors were utilized.
For more information on the Alberta Wind Energy Supply Chain report and to read a summary of the findings, check out: Wind energy sector poised to deliver $3.6b in local spending to Alberta companies between now and 2030 and the links below.
- Alberta Wind Energy Supply Chain Study
- Blog: Diversifying Alberta’s economy with wind energy will pay dividends says report
- Blog: New study identifies the economic potential of Alberta’s wind energy sector
- Blog: Three ways to fully capture the economic potential of Alberta’s wind energy sector
Photo: Bryan Passifiume – West of Pincher Creek