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Cape Wind Threats: Economy

Cape Wind would be costly for consumers.

The Cape Wind project would result in losses in tourism and employment, declines in property values, and losses in fisheries income.

The public is not willing to pay a premium for wind energy.

Cape Wind would be costly for consumers.

Buried deeply in the federal Minerals Management Service (MMS) Draft Environmental Impact Statement (DEIS) is a whopping admission that Cape Wind’s offshore wind plant would produce electricity at two to three times current wholesale prices in the area. Read more!

Because offshore wind projects are expensive to build, they depend on electricity rates as well as additional sources of revenue including tax credits, renewable energy certificates, and long term purchased power agreements. On top of rates New England residents would pay Cape Wind for their electricity, federal and state taxpayers would be paying over $1.3 billion in tax credits and subsidies over the life of this project.

Although wind is a free source of power, turning it into electricity is more expensive than most conventional generation sources because of the high cost of turbines and associated gear. The capital investment required to generate electricity from wind is high and has been increasing rapidly. While Cape Wind initially estimated $700 million to build their project, current estimates are over $1 billion and likely much higher given escalating costs seen with other offshore projects.

Following the cancellation of a multibillion-dollar project off the coast of Texas, the Long Island Power Authority (LIPA) terminated a controversial project to install 40 wind turbines off the coast of Jones Beach because a recent report showing the costs of this project to be significantly higher than traditional forms of energy generation. Learn more. Moreover, in Delaware, another offshore proposal suffered a serious setback when one report determined that the project could increase ratepayers' bills by as much as $55 per month.

While Cape Wind claims their project would save $25 million, electric ratepayers must understand that this is a grossly misleading statement. First, the study Cape Wind references is roughly 5 years old and new market rules eliminate most of the “theoretical savings.” Second, the study did not include the appropriate costs and public subsidies that more than offset any savings. Finally, as Commissioner William Doherty stated before the Cape Cod Commission on October 18, “According to the testimony of the Cape Wind people, [the project] will not lower the electric bills of Cape Cod consumers.”

The Cape Wind project would result in losses in tourism and employment, declines in property values, and losses in fisheries income.

Known for its beaches and natural beauty, Cape Cod and the islands of Nantucket and Martha's Vineyard are one of the top ten tourist destinations in the country. Industrialization of Nantucket Sound by Cape Wind would cause losses in tourism and employment, as well as declines in property values.

In comparison to the number of jobs lost by the construction of Cape Wind, the jobs potentially created by Cape Wind are negligible and will largely go to off-Cape and even out of state workers. While Cape Wind relies on questionable anecdotal evidence of wind farm related tourism in Denmark, a study by the Beacon Hill Institute calculated:

• A reduction in employment of 1173-2533 jobs,
• A reduction in tourist spending of $57 million to $123 million,
• A related drop in output of $94 million to $203 million and a drop in earnings of $28 million to $61 million, and
• A loss in property values of $1.35 billion.

If Cape Wind's 25 square mile grid were constructed, commercial fishermen, who rely on the proposed site for more than half their catch, say they would be restricted in their access to fish fertile waters. The Massachusetts Fishermen's Partnership, which represents 18 commercial fishing organizations, says that navigation of mobile fishing gear between the 130 towers would be hazardous or impossible and, in short, Cape Wind would displace commercial fishing from Nantucket Sound. Read more about the concerns of the Massachusetts Fishermen's Partnership.

The public is not willing to pay a premium for wind energy.

While people generally say they would be willing to pay more for clean energy, the reality is different. Nationally, more than 600 utilities and municipal electric departments offer "green power" choices to customers, according to the US Energy Department. But fewer than 1 percent of customers are signing up because the programs almost always require people to pay more than they would for conventional coal-, gas-, or nuclear-generated electricity, according to the Massachusetts Division of Energy Resources.

Recently NStar, the Boston-based utility, announced plans to allow residential and small-business customers to buy their electricity from wind developments. But because wind projects are more expensive than other sources, a typical homeowner would pay a premium of about $7.50 to $15 monthly. And for another green program offered by the utility National Grid, fewer than 6,000 of their 1.3 million Massachusetts customers participate.