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Offshore wind energy will drive up electricity costs for NJ households and businesses

The Beacon Hill Institute at Suffolk University in Boston has conducted an analysis of 1,100 megawatts of offshore wind power for New Jersey. We found that these projects would produce costs of $4.793 billion to construct the windmills and connect them to regional electricity and provide backup sources of electricity for times of unfavorable winds.

On Aug. 19, 2010, Gov. Chris Christie signed the Offshore Wind Economic Development Act into law. The law orders the state Board of Public Utilities to develop an offshore wind energy certificate program that would support at least 1,100 megawatts of generation from qualified offshore wind projects and provides $100 million in subsidies to potential offshore wind developers. The law requires a cost-benefit analysis that includes a detailed analysis of the impact of the projects on the state's economy and electricity ratepayers.

The Beacon Hill Institute at Suffolk University in Boston has conducted an analysis of 1,100 megawatts of offshore wind power for New Jersey. We found that these projects would produce costs of $4.793 billion to construct the windmills and connect them to regional electricity and provide backup sources of electricity for times of unfavorable winds.

Set against these costs are the benefits, including the value of fuel saved, the reduction in spending on building generating capacity elsewhere, the health and other benefits of lower emissions,... more [truncated due to possible copyright]  

On Aug. 19, 2010, Gov. Chris Christie signed the Offshore Wind Economic Development Act into law. The law orders the state Board of Public Utilities to develop an offshore wind energy certificate program that would support at least 1,100 megawatts of generation from qualified offshore wind projects and provides $100 million in subsidies to potential offshore wind developers. The law requires a cost-benefit analysis that includes a detailed analysis of the impact of the projects on the state's economy and electricity ratepayers.

´╗┐The Beacon Hill Institute at Suffolk University in Boston has conducted an analysis of 1,100 megawatts of offshore wind power for New Jersey. We found that these projects would produce costs of $4.793 billion to construct the windmills and connect them to regional electricity and provide backup sources of electricity for times of unfavorable winds.

Set against these costs are the benefits, including the value of fuel saved, the reduction in spending on building generating capacity elsewhere, the health and other benefits of lower emissions, and greater energy independence. The projects would provide benefits of $1.544 billion in the form of avoided electricity costs and reduced emission.

These benefits are not sufficient enough, however, to build turbines in New Jersey at this time.

Therefore, the projects would produce a net economic cost of $3.245 billion to New Jersey over the life of the project, which would be passed on to the state's ratepayers.

The project will increase New Jersey's electricity prices by an estimated 2.1 percent by 2017. From 2017 to 2036, the average household ratepayer would pay $431 in higher electricity costs, the average commercial ratepayer would pay an extra $3,054, and the average industrial ratepayer would pay an extra $109,335 per year.

These higher energy prices would hurt the purchasing power budgets of New Jersey's households and businesses by reducing their ability to consume, save and invest, impairing the state economy. We estimate that by 2017 New Jersey would lose an average of 2,219 jobs. Average annual wages would fall by an average of $111 per worker, and real disposable income will fall by an estimated $330 million. Net investments would fall by $48 million.

Offshore wind is more expensive than conventional energy and will drive up the costs of electricity for New Jersey's households and businesses. Higher electricity costs may be justifiable if the environmental benefits outweigh the costs. Here they do not. Furthermore, it is unclear that the use of renewable resources, especially wind and solar, significantly reduces greenhouse gas emissions due to the need for backup power sources.

The rush to wind energy is flawed. The policy promotes wind energy - costly ones - at the cost of other, more affordable and dependable sources. The New Jersey law puts the state's competitiveness at risk. These inflated electricity costs will result in New Jersey seeing slower growth in the future, and falling behind current competitor states. Policymakers should pay careful attention to the real danger posed by higher electricity prices and consider alternatives with better prospects for their $100 million investment.


Source: http://www.phillyburbs.com/...

AUG 1 2011
http://www.windaction.org/posts/31544-offshore-wind-energy-will-drive-up-electricity-costs-for-nj-households-and-businesses
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