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.

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:

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).

2. The DEIS conclusion of “no adverse impacts to tourism and recreation” is not supported by the data.

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.

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.

Concept for a step-by-step extension of the transmission grid in Germany for the connection and integration of wind turbines onshore and offshore taking into account the production and power station developments and the necessary regulating and reserve power.

Introduction:

A reasonably priced and reliable electricity supply is an important location factor for the development of an economy. Against this background, it is necessary to investigate the demands placed on the entire system for the generation and transmission of electrical energy, which in future must again be optimised for the integration of the inevitably increasing amount of electricity generated from wind energy. The economic effects resulting from this must also be determined. Maintaining the current level of reliability of supply must be included here as an important boundary condition....

"In summary, there are serious problems with the draft Programmatic Environmental Impact statement (PEIS). The comments that follow are focused primarily on the portions of the draft that deal with the economics of wind energy development. The data and conclusions reflected in those parts of the draft are invalid because:.."

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.

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"

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.

Author Glenn Schleede addresses the shortcomings of a model developed by NREL (a 'laboratory' of the DOE)that purports to permit the calculation of the state or local economic impact from the building of a potential wind farm. The model, known as "Jobs and Economic Development Impact" (JEDI), allows the user to employ various default assumptions or to change these assumptions to fit a particular wind project. Schleede contends that (1)use of the default assumptions will provide unrealistically high benefits and (2) key factors that offset benefits are not reflected in the model. To illustrate the model's deficiencies, Schleede applies it as well as more realistic assumptions to a proposed project in Highland County, Virginia.

Topics addressed:

(1)uncertainly over future natural gas prices

(2)the value of long-term fixed-price contracts for renewable energy

(3)what impact do renewables have on gas prices?

(4)what impact do high gas prices have on renewables?

Government agencies and the wind industry have successfully portrayed wind-generated electricity as "green" and as a price-competitive, potentially significant alternative source of power which could reduce dependence on 'dirty' fuels. While wind generated electricity may make sense in some circumstances, industry and government claims for its widespread use are not currently supported by sound science or economic analysis of costs v. benefits.