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Socio-Economic Considerations

Berrimal Wind Farm, 2013

Version 3

Socio-Economic

Considerations Berrimal Wind Farm, November 2013

ACCIONA Energy Oceanía Pty Ltd

ABN 98 102 345 719

Level 12, Freshwater Place, 2 Southbank

Boulevard

Southbank VIC 3006 Australia

Tel: +61 3 9027 1000

Fax: +61 3 9027 1001

Web: www.acciona.com

Author: Tracey Ward and Iain Lawrie

File name: Socio Economic Assessment-

Berrimal

Document version: Version 3

Last saved: 3 December 2013

http://www.acciona.com/

Berrimal Wind Farm Socio Economic Considerations 2013

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Table of Contents

Table of Contents 4

1 Overview 5

2 Buloke Shire socio-economic characteristics 6

2.1 Demographics 6

2.2 Labour force characteristics 8

2.3 Demographic and labour force summary 8

3 Projected Employment and Economic Opportunities 9

4 Projected Direct Economic Benefits 11

5 Anticipated socio-economic benefits 13

5.1 Economic Impact Assessment- Waubra and Gunning Wind Farms 13

5.2 Economic Impact- Generic Assumptions 14

6 Conclusions 16

7 References 17


5

1 Overview

Construction of a large scale wind energy facility has the potential for considerable

influence on the socio-economic structure of its host rural locality. This report provides a

summary of the potential socio-economic implications associated with the proposed

Berrimal Wind Farm, located in the Buloke Shire in north western Victoria.

The report provides this summary through consideration of:

Key existing socio-economic indicators and trends present in the Buloke Shire.

This has been undertaken utilising Australian Bureau of Statistics (ABS) census

data, with associated commentary on implications for future economic growth in

the Shire;

Anticipated numbers, duration and range of employment opportunities presented

by the construction of the Berrimal wind farm;

Direct economic benefits flowing from rates, landowner payments and proposed

neighbourhood enhancement and local sponsorship programs; and

The socio-economic outcomes in communities where comparable wind energy

developments have been constructed

The Berrimal Wind farm has the potential to bring significant investment and local

employment opportunity to the Buloke Shire. Whilst the Buloke Shire and immediate

surrounding shires are not equipped to provide the project with the significant

manufacturing of high value equipment to be constructed (turbine blades, nacelles and

towers), the Shire is well equipped to provide substantial support services and

employment. It is anticipated this will result in a considerable benefit to the Shire,

peaking during the construction period, but present throughout the operation of the

development.


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2 Buloke Shire socio-economic characteristics

2.1 Demographics

The Buloke Shire is located in north-western Victoria, between 210 and 360 kilometres

north-west of Melbourne, covering an area of 8,000 km2. Figure 1, below shows the

location of the Berrimal Wind Farm in relation to the Buloke Shire township of Charlton.

It is noted that the local service towns of Wedderburn and St Arnaud are located outside

the Buloke Shire in the Loddon and Northern Grampians Shires respectively.

The shire’s largest town, Donald, with a population of approximately 1400, is located

approximately 40km north west of the site, see below for regional map.

Figure 1 Regional map, Berrimal Wind Farm


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Based on the 2011 ABS Census, the Buloke Shire is home to an estimated 6,388 people

residing in 3282 households. The Shire is thus one of Victoria’s most sparsely populated

municipalities.

Comparing the 2006 and 2011 ABS Census data, Table 1 below provides an assessment

of the population characteristics and trends of the Shire. Table 1 shows a small, but

defined decline in the Shire’s population between 2006 and 2011.

Table 1: Buloke Shire Population Trends1

Buloke Shire 2006 2011 Change

Population

(excluding o/s

visitors)

6852 6388 -464 (6.7%)

These trends are forecast to continue, with the Victorian Government’s Regional

Development Victoria, Buloke Economic Snapshot additionally projecting that the Shire’s

population is expected to further decrease by 6% by 2031. There is also projected to be

a positive increase in the 65+ age group over this period2.

At the 2011 census, the Buloke Shire had more people in the 50-85+ age ranges (47%

of the shire population) compared to the average in all other regional Victorian areas.

Additionally, in the period 2006-2011, there was a decrease in the numbers of ‘Parents

and Homebuilders’ and ‘Young Workforce’ categories in the ABS census results, indicating

that families have moved out of the area or have joined the ‘Older Workers and Pre

Retirees’ category.

1 Australian Bureau of Statistics, Census of Population and Housing 2006 and 2011. Compiled and presented in

profile.id, the population experts, sourced from Buloke Shire website www.buloke.vic.gov.au retrieved 25

November 2013

2 Department of Planning and Community Development, (2012), Buloke Economic Snapshot, Regional

Development Victoria.

http://www.abs.gov.au/censushttp://www.buloke.vic.gov.au/


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2.2 Labour force characteristics

The Buloke Shire’s labour force participation at the 2011 census was 54.3%, somewhat

lower than the regional Victorian average of 58.2%. Agriculture, specifically grain

production, is the primary source of income and employment in the area. Other forms of

farming, education, retail, community service sectors and light industry also provide the

balance of employment.

Census data identifies a decreasing employment base in the shire, with 151 fewer

persons employed in 2011 compared to 2006. Over the same period, the number of

unemployed showed an increase of 15 persons. The relatively small increase in the

number of unemployed compared to the reduction in total employment may reflect an

increased number of people entering retirement, working mothers leaving work to care

for children, or a broader trend of population drift away from the shire.

The Buloke Shire’s economy is dominated by agriculture, employing 818 people or 30.0%

of the workforce. This is considerably higher that the Victorian regional average of 7.8%.

The agriculture sector also recorded the largest change between the 2006 and 2011

census, with 140 fewer people employed in this category in 2011.

2.3 Demographic and labour force summary

The Buloke Shire demographic and economic conditions are summarised by:

A low population base, dispersed over a large geographic area;

A general lack in economic diversity compared to the broader regional Victorian

economy, with activity highly reliant on the agricultural sector;

Declining employment in the agricultural sector, likely resulting in the concurrent

fall in overall shire population; and

A projection that these trends will continue in the coming decades.

In this context, the Berrimal wind farm offers a small, but material potential for

diversification in the shire’s economy. This diversification may assist in slowing the

negative trend in the shire’s demographic and labour market conditions.


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3 Projected Employment and Economic

Opportunities

The Berrimal Wind Farm is projected to require a peak construction workforce of 80-100

staff. Ongoing, the project will require the full time employment of between 5 and 10

staff. These staff, in turn, will spend a proportion of their wages back into the local

economy, further supporting local services and business.

During the construction phase of the project, the Berrimal Wind Farm will require the

services and contractors in the following areas:

Catering and accommodation;

Civil and electrical technicians;

Local haulage;

Cement manufacture and processing;

Road materials haulage and application;

Cleaning;

Fencing;

Landscaping;

Fleet hire;

Uniform and personal protective equipment (PPE); and

Ancillary support and clerical services.

Wherever possible, ACCIONA Energy will endeavour to source labour and services locally.

Whilst providers within the Buloke shire have the capacity to provide many of the above

services, wind farm construction will require certain specialist services not readily

supplied by the local economy, or not supplied at the scale required for the project. It is

anticipated therefore that adjacent local government areas will derive benefit from the

provision of services- in particular the Loddon and Northern Grampians through the

service towns of Wedderburn and St Arnaud.

Likewise, substantial infrastructure and specialist services will not be able to be sourced

from within the broader region. In particular, wind turbine generators, blades, towers (if

steel construction employed) and cables will not be able to be sourced from the regional

economy of north west Victoria.


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The Buloke Shire will however have capacity and opportunity to benefit significantly from

the supply of ancillary support services and local labour. To ensure local contractors and

service providers have the best opportunity to be involved with the project, ACCIONA

Energy will continue to engage closely with the Buloke and adjacent shires, along with

the Industry Capability Network. The Berrimal wind farm will likely be established as a

‘gateway project’ with the Industry Capability Network, providing a structured approach

to ensuring local contractors with relevant capabilities have the opportunity to be

involved in the project. As with other ACCIONA Energy wind farm sites, a database of

local contractors and service providers will concurrently be maintained.

Local contractors can contact ACCIONA Energy by email on [email protected] or

by calling the freecall community hotline, on 1800 283 550.

mailto:[email protected]


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4 Projected Direct Economic Benefits

In addition to providing employment in the local area during the construction and

operational phases of the project, the development will deliver additional direct economic

benefits. These include:

Additional rates revenue to the Buloke Shire

Based on the standard Victorian local government wind farm rates agreement,

the Berrimal Wind Farm will contribute over $140,000 annually (from project

operational commencement, indexed to CPI) in rates to the Buloke Shire. This

would form a substantial increase in the shire’s commercial rates revenue base,

and may potentially provide an opportunity to limit the extent of rates increases

on other shire ratepayers.

Revenue to host landowners

Two landowners have agreed to a lease agreement with ACCIONA Energy to host

turbines and supporting infrastructure for the Berrimal Wind Farm. These

agreements have been reaches on a commercial basis, with landowners able to

continue on-going agricultural use of the land with negligible impact on the

agricultural capacity of their properties.

Community Benefit Fund

ACCIONA Energy is strongly committed to ensuring local communities in the

vicinity of its projects share in the benefits of renewable energy projects. At

Berrimal, a Community Benefit Fund is envisaged, commencing at the beginning

of project operation with a sum of approximately $35,000 per annum (indexed to

CPI). The structure of the fund will be developed in consultation with the local

community in the coming months and prior to construction commencing. It is

envisaged a committee will be established to oversee the responsible distribution

of funds under a terms of reference. These terms of reference will be focused on

ensuring an equitable distribution of funds to appropriate neighbourhood

improvements and projects- potentially on both private freehold and public lands.

Local Sponsorship Program

In addition to the Community Benefit Fund, ACCIONA Energy will provide an

annual local sponsorship allocation, commencing at the beginning of project

operation. It is envisaged this allocation will commence at approximately $15,000

per annum (indexed to CPI). The program will have a focus on community

facilities and the needs in adjoining service towns nearby to the project.


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Wages

The annual wages for permanent staff located at the Berrimal farm operations

and maintenance facility will be several hundred thousand dollars. With staff

permanently located on site, these staff will likely reside locally, resulting in a

substantial portion of this wages pool flowing into the local economy on an

ongoing basis. This wages estimate excludes wages involved with supporting

contractors and service providers.


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5 Anticipated socio-economic benefits

A number of detailed post operational economic analyses have been undertaken following

the construction and operation of wind farms in south eastern Australia. These analyses

provide a reasonable basis on which to form projections for the likely benefits from the

development of a project such as the Berrimal wind farm.

5.1 Economic Impact Assessment- Waubra and Gunning Wind Farms

ACCIONA Energy engaged Price Waterhouse Coopers (PWC) to undertake an economic

assessment of the benefits resulting from the Waubra and Gunning wind farms. The

Waubra wind farm, at 128 turbines and a maximum generation output of 192 MW is

substantially larger in scale than the proposed Berrimal development. At 31 turbines and

46.5MW, the Gunning wind farm on the southern tablelands of NSW is somewhat smaller

in scale than the proposed Berrimal development.

Waubra

The PWC modelling shows the local investment of $226.5M for the construction and

operation of the Waubra wind farm will:

Result in an increase in the Victorian Central Highlands Statistical Division Gross

Regional Product of $346M or 6.0%;

Increase the Victorian Gross State Product by $355M or 0.2%;

Increase the Central Highlands Statistical Division industry output by $676M ;

Increase the Victorian industry output by $685M;

Have an employment impact in the Central Highlands Statistical Division of 1680

FTEs or 2.7%; and

Have an overall employment impact in Victoria of 1882 FTEs

Gunning

The PWC modelling shows the local investment of $52.4M for the construction and

operation of the Gunning wind farm will:

Result in an increase in the South Eastern NSW Statistical Division Gross Regional

Product of $69.3M or 0.8%;

Increase the NSW Gross State Product by $77.5M or 0.02%;


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Increase the South Eastern Statistical Division industry output by $139M;

Increase the NSW industry output by$153M;

Have an employment impact in the South Eastern Statistical Division of 358 FTEs or

0.4%; and

Have an overall employment impact in NSW of 397 FTEs.

5.2 Economic Impact- Generic Assumptions

Consistent with the assessments for the Waubra and Gunning projects, the Clean Energy

Council engaged SKM consulting to develop a generic model for the likely economic

benefit flowing to a community from a 50MW scale wind energy project.

The SKM report identified that such a project would likely lead to:

Personal local expenditure of $25,000 per annum by each construction force

employee;

Expenditure of $875,000 spent locally on accommodation, food and other

services, equating to approximately $1.2 million per year flowing into hotels,

shops, restaurants and other local service providers;

An increase in construction jobs during the development phase of the project

which is estimated at 48 local/ regional positions and 160 indirect positions based

on a 50MW wind farm;

The creation of 5 maintenance positions, with 12 positions accounting for indirect

positions during the operational phase of the project, equating to an influx of

$125,000 annually;

An increase in income to farmers annually for turbine leasing, averaging up to

$250,000 which has flow on effects for the local community; and

An increase in community contribution totalling up to $80,000 per annum for

some wind farm projects, for the life of the project.

SKM additionally prepared a report on behalf of AGL to assess the economic impact of the

Hallett wind farms, located in South Australia’s mid north. Whilst the Hallett projects are

collectively larger by some margin to the proposed Berrimal project, they provide a

useful reference point for the impacts of a project located some distance from a

dominant service town (a role played by Ballarat and Goulburn respectively for ACCIONA

Energy’s Waubra and Gunning projects). The SKM report identified the following

quantitative and qualitative trends:


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The population in the Goyder Shire had been contracting, which may otherwise

have continued as the population base undermined the economic viability of

certain services, leading to further reductions in population

The Hallett Wind Farms were projected to maintain the current population by

providing short and long term employment opportunities; and

The Hallett Wind Farms could also theoretically reduce regional unemployment by

15-17%.

Since construction of the project, there has been:

Evidence of strong local business support for the Hallett project;

A significant increase in sales over the construction period for local

accommodation and food services providers;

Employment of local contractors directly in the wind farms’ construction, and

A more buoyant business environment in the region’s towns as a result of the

additional people and expenditure in the region lasting beyond the immediate

construction phase


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6 Conclusions

The Berrimal wind farm is expected to bring significant economic and social benefits to

Buloke and surrounding shires. Census and other Government data clearly indicate the

Buloke Shire has a number of long term economic and social challenges presented by a

falling population and heavy reliance on the agricultural sector. The Berrimal project will

provide a substantial additional economic focus in the shire, independent of, but

complimentary to, ongoing agricultural activities.

In summary, the project will:

Generate a construction peak workforce of 80-100 jobs;

Provide 5-10 ongoing full time positions on site;

Provide a diversified income for host landowners;

Provide a substantial increase in the Buloke Shire’s limited rates base;

Result in the establishment of a Community Benefit Fund to share the benefits of

the project with the immediate community surrounding the development, for the

operational life of the project; and

Result in the establishment of a local sponsorship program, supporting local

services operating within nearby service towns to the site for the life of the

project.

The PWC and SKM reports clearly identify substantial benefits flowing to communities

hosting wind energy facilities. With a declining population and associated economic

challenges, the Buloke Shire is potentially better placed than many to enjoy the uplift

associated with additional economic activity.


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7 References

Australian Bureau of Statistics, (2006 and 2011) Census of Population and

Housing http://profile.id.com.au/buloke/population.

Buloke Shire Council: www.buloke.vic.gov.au.

Clean Energy Council, (July 2012), Wind Farm Investment, Employment and

Carbon Abatement in Australia, [email protected].

Department of Planning and Community Development, (2012), Buloke Economic

Snapshot, Regional Development Victoria.

PricewaterhouseCoopers, (2012), Economic Benefits of the Waubra and Gunning

Wind Farms: Melbourne: ACCIONA Energy.

SKM Consulting, (2012), Benefits of Wind Energy in Australia, Melbourne: Clean

Energy Council.

SKM Consulting,(2010), Economic Impact Assessment of the Hallett Wind Farms,

Sydney: AGL Ltd.
http://www.buloke.vic.gov.au/

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