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Job and Economic Development Impact (JEDI) Model Date: 9/4/2008JEDI is a series of input-output models that can be used to calculate economic impacts from wind, coal, or natural gas power generation projects. The models allow you to identify and compare the local economic impacts associated with constructing and operating wind, coal, or natural gas power plants. JEDI is for developers, advocates, government officials, decision makers, and other users who might not have the resources to develop their own economic development models. It is designed to accommodate a broad user base with various levels of experience in economic development modeling. It accommodates inexperienced spreadsheet users, those unfamiliar with economic impact analyses, and more experienced and knowledgeable users who need this type of analysis on a regular basis.
About the JEDI Models
JEDI models calculate the jobs and economic impacts associated with constructing and operating wind, coal, and natural power plants. Users enter basic information about a specific project (including capital costs, the project location, the year of construction and the size of the facility) to determine income (wages and salaries), economic activity, and the number of jobs that will accrue to the local region (typically a state). To the extent the user has and can incorporate project-specific data (specifically the share of spending that is expected to occur locally), the more localized the impact analysis will be.
Although the JEDI models contain default data for virtually every input field and for each of the 50 states, not every project will follow this exact "default" pattern for expenditures. Project size, location, financing arrangements, and numerous site-specific factors influence the construction and operating costs of a given project. Similarly, the availability of local resources, including labor and materials and the availability of locally manufactured power plant components can have a significant effect on the local jobs and economic benefits that accrue to the state or local region.
JEDI models can also be used to estimate the economic development benefits of a county or region. To use JEDI in this way, specific multipliers for the local area must be developed and entered into the appropriate model. In addition, it is important to adjust the other input parameters, such as local share of spending, to accurately reflect the region or county. This is best accomplished by contacting the JEDI model designer, Marshall Goldberg.
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How JEDI Works
Each JEDI model uses the same basic input-output methodology. A portion of costs for a power generation project are spent in a state or local region. These local expenditures result from using local labor (e.g., concrete pouring jobs), services (e.g., on-site electricity), materials (e.g., the wind turbine blades), or components (e.g., nuts and bolts). The portion of project expenditures that are purchased locally can be adjusted by individual users based on project-specific details under "local share."
Money spent on power generation-related goods and services generates local economic activity as a result of their initial direct expenditure and the increased demand for goods and services that are driven by these expenditures. Such spending is translated into direct, indirect, and induced impacts.1
JEDI models are based on economic data from the Minnesota Implan Group (MIG). This group compiles and aggregates economic data to calculate the specific relationship between changes in demand for goods and services, at the local, state, and regional level, and the resulting economic activity. The National Renewable Energy Laboratory has used IMPLAN data to calculate economic activity resulting from changes in demand for goods and services due to wind, coal, and natural gas project construction and operation. From these relationships between expenditures and changes in economic activity, we have developed wind, coal, and natural gas multipliers to estimate the effect of a given expenditure on energy generation in the local, state, or regional economy.
The intent of using the JEDI model is to construct a reasonable profile of investments (e.g., wind power plant construction and operating costs) to demonstrate the economic impacts that will likely result during the construction and operating periods. Given the potential for future changes in wind power plant costs and potential changes in industry and personal consumption patterns in the economy, the analysis is not intended to provide a precise forecast, but rather an estimate of overall economic impacts from specific scenarios.
We have conducted extensive interviews with power generation project developers, state tax representatives, and others in the electric power industry to determine appropriate default values for our models. However, local expenditure amounts vary and are easily adjusted by the user to account for variability in use of local goods and services among projects.
When comparing results between JEDI Wind, Coal, and Natural Gas we recommend making comparisons between equivalent energy producing facilities rather than comparing facilities with a similar nameplate capacity. In either case, capacity factor and energy production should be considered when comparing economic development benefits of from different power generation technologies.
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JEDI Wind allows the user to estimate economic development impacts from wind power generation projects. Although the model has default information, the user may enter project-specific data including a bill of goods (costs associated with actual construction of the facility, roads, etc., as well as costs for equipment and other services and fees required), annual operating and maintenance costs, and data on the portion of expenditures spent locally, financing terms, and tax rates. Model users are encouraged to enter as much project-specific data as possible. JEDI Wind user inputs include:
- Construction Costs (materials and labor)
- Equipment Costs
- Other Costs (utility interconnection, engineering, land easements, permitting, etc.)
- Annual Operating and Maintenance Costs (personnel, materials, and services)
- Other Parameters (financial: debt and equity, taxes, and land lease)
The model provides reasonable default values for each of the above inputs and all of those necessary for the analysis. As incorporated in the model, these values represent average costs and spending patterns derived from a number of sources (project-specific data contained in reports and studies) and research and analysis of resources undertaken by the model developer during the past 10 years. To conduct a more project-specific analysis, project-specific values should be used in place of the default values. This link will take you to the National Renewable Energy Laboratory's Energy Analysis Web site where you can download the JEDI Wind model.
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JEDI Coal allows the user to estimate economic development impacts from coal power generation projects. Applying a similar user interface as the JEDI wind model, JEDI coal requires a few additional user inputs. In addition to the standard JEDI Wind inputs, JEDI Coal user inputs include:
- Capacity Factor
- Heat Rate
- Fuel Costs
- Fuel Produced Locally (Percent)2
Results are presented in the same manner as those in the JEDI wind and natural gas models. This allows straightforward comparisons of economic development metrics between power generation projects that rely on different primary energy resources. As is the case with all our JEDI models, reasonable "default" values are provided. However, individual projects may vary and when possible project specific data should be used to obtain the best estimate of economic development impacts. This link will take you to the National Renewable Energy Laboratory's Energy Analysis Web site where you can download the JEDI Coal model.
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The JEDI Natural Gas model allows users to estimate economic development impacts from natural gas power generation projects. The basic user interface for the natural gas model is the same as the wind and coal models. Results are also provided in the same format as the coal and wind models making comparisons among generating resources simple and straightforward. The natural gas model relies on a similar set of standard user inputs that are common to the wind and coal models. A few supplemental inputs specific to natural gas and coal include:
- Capacity Factor
- Heat Rate
- Fuel Costs
- Fuel Produced Locally (Percent)2
As is the case with all our JEDI models reasonable "default" values are provided. However, individual projects may vary and when possible project specific data should be used to obtain the best estimate of economic development impacts. This link will take you to the National Renewable Energy Laboratory's Energy Analysis Web site where you can download the JEDI Natural Gas model.
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More Information
Some of the following documents are available as Adobe Acrobat PDFs. Download Adobe Reader.
- Williams, S.K., Acker, T., Brummels, G., Wells, S. (April 2007). "Arizona Wind Energy Assessments: Developable Windy Land and Economic Benefits."
- Mongha, N., Stafford, E., Hartman, C. (August 2006). "An Analysis of the Economic Impact on Box Elder County, Utah, from the Development of Wind Power Plants (PDF 514 KB)." DOE/GO-102006-2350.
- Mongha, N., Stafford, E., Hartman, C. (August 2006). "An Analysis of the Economic Impact on Tooele County, Utah, from the Development of Wind Power Plants (PDF 442 KB)." DOE/GO-102006-2353.
- Tegen, S., Goldberg, M., Milligan, M. (June 2006). "JEDI II: Jobs and Economic Development Impacts from Coal, Natural Gas, and Wind Power (PDF 499 KB)." Presented at WINDPOWER 2006, June 4-7, 2006, Pittsburgh, PA. NREL/PO-500-39908.
- Mongha, N., Stafford, E., Hartman, C. (May 2006). "An Analysis of the Economic Impact on Utah County, Utah from the Development of Wind Power Plants (PDF 335 KB)." DOE/GO-102006-2316.
- Costanti, M. (September 2004). "Quantifying the Economic Development
Impacts of Wind Power in Six Rural Montana Counties Using NREL's JEDI Model
(PDF 946 KB)." NREL/SR-500-36414.
- Goldberg, M.; Sinclair, K.; Milligan, M. (March 2004). "Job and
Economic Development Impact (JEDI) Model: A User-Friendly Tool to Calculate
Economic Impacts from Wind Projects (PDF 417
KB)." Preprint; to be presented at the 2004 Global WINDPOWER
Conference; Chicago, IL, USA; March 29-31, 2004. NREL/CP-500-35953.
- National Renewable Energy Laboratory. (March 2004). "Job and Economic
Development Impact (JEDI) Model (PDF 1 MB)." Brochure.
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Suzanne Tegen, National Renewable Energy Laboratory
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1. Example: To build a wind farm an individual must hire a construction firm. Direct impacts result from payments to the construction firm for labor, excavation services, concrete, engineering services and so on. However, concrete, used in turbine foundations, increases demand for gravel, sand, and cement. As a result of an expenditure for concrete there is increased economic activity at quarries and cement factories. These changes are the indirect impacts. Increased economic activity, at the construction firm and the quarries, results in increased revenues and raises individual incomes. Therefore, individuals associated with these companies spend more money in the local retail sector on services including, but not limited to, restaurants and childcare. This final link in the spending chain is responsible for induced impacts.
2. Is the coal/natural gas that will supply a specific coal power plant procured from mines/wells that are located in the region that is being analyzed (e.g., the same state). If so what percentage of total fuel consumed does the local supply constitute.
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