Glenn Schleede examines the financial incentives available to owners of industrial wind energy and how taxpayers and utility customers are picking up the tab.

Researched and written by Eleanor Tillinghast of Green Berkshires Inc. this is a comprehensive study of the probable impact of industrial wind plants on the rural character, quality-of-life and economy of the Berkshires in western Massachusetts. Specific issues addressed include visual aesthetics, tourism, property values, public roads and public safety.

So, before we proclaim victory against our profligate use of fossil fuels in the last 50 years, politicians and environmental groups might ponder the huge costs in dollars and environmental damage before 20-storey windmills festoon our coastlines, our sea lanes and our beautiful Quebec hills.

Jon Boone addresses wind power for the Mid-Atlantic region.

Q. Even considering all of those factors or weaknesses, what is your conclusion regarding the impact on residential property values from the proposed project?

A. Under certain circumstances as described in my report, the negative impact may be similar. Also, in significant view loss situations, as described in my report, I would conclude that, within a reasonable degree of professional certainty, land values may be negatively impacted 17% - 20%.

Editor's Note: Mr. Zarem argues that the appropriate methodology for estimating the 'view' impact of industrial wind turbines on property values is 'paired data analysis'- defined in the The Dictionary of Real Estate Appraisal as: “A quantitative technique used to identify and measure adjustments to the sale prices or rents of comparable properties; to apply this technique, sales or rental data on nearly identical properties are analyzed to isolate a single characteristic’s effect on value or rent.” In the absence of relevant view/turbine data, he derived an alternative paired data analysis for determining view impacts on property values due to wind turbines from Transmission Line view impacts on the prices of single-family residential lots in subdivisions...as...sufficient paired data isolating the effects of view loss due to Transmission Lines exist in the marketplace to reach reasonable conclusions as to market tendencies. This data isolates impacts due to view loss associated with Transmission Lines.

Written by Douglas Giuffre, Jonathan Haughton, David Tuerck and John Barrett, this report analyses in economic terms the costs and benefits of a proposed 130 turbine wind plant in Nantucket Sound. It concludes that the economic costs substantially exceed the associated economic gains. This is a follow-up study to one published by Beacon Hill in October 2003 entitled "Blowing in the Wind: Offshore Wind and the Cape Cod Economy"

Executive Summary of a document prepared by the Kansas Corporation Commission (KCC) which discusses the cost/benefit of deploying wind turbines to meet the Kansas Governor's challenge “to have 1,000 megawatts of renewable energy capacity installed in Kansas by 2015.” Included below are sections 0.80 and 0.90 of the executive summary. The full document can be accessed by clicking on one of the below links.

Tom Hewson takes a very comprehensive look at the development issues associated with the proposed Baileyville Wind Farm in Illinois.

The Beacon Hill Institute at Suffolk University has studied the Cape Wind proposal in considerable detail, and offers the following comments on the Draft Environmental Impact Statement (DEIS) Reference file no. NAE-2004-338-

1. A systematic cost-benefit analysis – missing from the DEIS – shows that, with 90% confidence, the costs of the project outweigh the benefits by between $83 million and $333 million, with a mean measure of net cost of $209 million (equivalent to 2.0 cents/kWh produced). This breaks down as: a. Cost of 9.06 cents/kWh (close to the DEIS estimate of 9.00 cents) b. Benefit of 7.06 cents/kWh, of which the savings are: fuel (4.95), capital and operating costs, (0.98), improvements in public health (1.02) and greater energy independence (0.10). The project is of interest to a private developer only because of subsidies of 4.04 cents/kWh, via accelerated depreciation allowances, Massachusetts “green credits,” and a possible Federal Production Tax Credit.

2. The DEIS conclusion of “no adverse impacts to tourism and recreation” is not supported by the data. a. The only tourism study considered in the DEIS, from Scotland, used a biased sample and does not report the most relevant results (i.e. how many would be deterred, or attracted, by the windmills). b. A Beacon Hill Institute survey of 497 randomly-selected tourists, undertaken in the relevant Cape Cod towns in summer of 2003, found that 5% would visit the Cape less, and 1% would visit more if the windmills were built. Using spending information, and an estimate of the number attracted to the Cape, the BHI study found a net loss in spending on the Cape of at least $57 million annually.

3. The DEIS conclusion that the project would not adversely affect property values is based on a flawed study, ignores other research, and is untenable. a. The DEIS discussion relies primarily on a study by the Renewable Energy Policy Project (whose goal is to “accelerate the use of renewable energy”) in 2003. Its conclusion that wind farms elsewhere in the United States did not harm property values relies on the use of an inappropriate counterfactual, and is largely based on much smaller projects. b. Even if wind farms are associated with higher property values, this is likely attributable to increased tax payments and royalties to local communities and owners – which makes them not comparable to the Cape Wind case (no royalties, minor local tax payments).

4. The DEIS estimates of the value of health improvements are greatly exaggerated (at $53 million annually). Our own estimates show health improvements of $7 million, and even this may be overstated. a. The DEIS assumes that the Cape Wind project would offset the dirtiest power plants in Massachusetts. This is incorrect, and it would be more appropriate to use the marginal emissions numbers from ISO-New England, which show avoided emissions that are one fifth as high for NOx and one seventh as high for SO2. b. The DEIS uses outdated emissions data (from 2000 rather than 2002). c. Even the $7 million may overstate the health benefits. BHI assumed that all of the output of the Cape Wind project would offset fossil fuel generation and its associated air pollution. However, it has been argued, convincingly, that the caps imposed by law and regulation on SO2 emissions would continue to be binding, and so the wind farm output would not lead to a reduction in SO2 emissions overall.