Wind Energy Economics in West Virginia

To help shed light on key issues, this paper focuses on recent and pending “wind farm” developments in West Virginia.

– Executive Summary –

West Virginia already has one “wind farm” in operation, another has been approved and a third
is awaiting approval. Such “wind farms” have far-reaching implications for the people of West
Virginia – and other states where they are being considered.

The description of key environmental, scenic and property value implications and the analysis of
economic benefits and costs associated with existing and proposed “wind farms” in West
Virginia in the body of this report are provided to help increase public, media and official
understanding of key issues.

Important conclusions include the following:

• The huge machines produce very little electricity and that electricity is of less value than
electricity produced by reliable generating plants.

• “Wind farms” must be backed up by dispatchable generating units and impose extra costs
and burden on transmission and electric system management, adding to their true costs.

• “Wind farm” advocates generally understate the true costs of the electricity they produce
and overstate both their environmental benefits and economic benefits to states and

• In early years, the value of federal and state subsidies for “wind farms” substantially exceed
the income that “wind farm” owners will receive for the electricity they produce.

Special attention should be given to the summary of economic benefits and costs on page 16 of
the analysis. Not all factors can be priced precisely but the bottom lines are clear:

• Anyone who believes that “wind farms” produce significant economic benefits for West
Virginia simply has not considered all the factors that must be taken into account.

• The truly significant economic benefits flow to organizations elsewhere; i.e., to the “wind
farm” owner and to the suppliers of the wind turbines and other components – all of whom
are located in other states or other countries.

The analysis demonstrates that the real motivation for construction of “wind farms” in the US is
the value derived from generous federal, state and local tax benefits and other subsidies – not
environmental benefits. “Wind farms” are not environmentally benign.

Wind Energy Economicsin West Virginia Empa 030204

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JAN 20 2003
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