New York Post
April 9, 2021
Last week, the Biden administration announced “a bold set of actions” that it said will “catalyze” the installation of 30,000 megawatts of new offshore wind capacity by 2030. A White House fact sheet claimed the offshore push will create “good-paying union jobs” and “strengthen the domestic supply chain.” One problem: It didn’t contain a single mention of electricity prices or ratepayers.
The reason for the omission is obvious: President Biden’s offshore-wind scheme will be terrible for consumers. If those 30,000 megawatts of capacity get built — which, given the history of scuttled projects like Cape Wind, is far from a sure thing — that offshore juice will cost ratepayers billions of dollars more per year than if that same power were produced from onshore natural-gas plants or advanced nuclear reactors.
Of course, offshore wind will create an armada of problems that go well beyond the price of power. As Rockefeller University environmental expert Jesse Ausubel told me recently, it will require “massive industrialization” of the oceans. Indeed, building 30,000 megawatts of capacity will require anchoring thousands of offshore platforms along our coasts that could pose significant threats to navigation, marine mammals and fisheries.
But the cost issue is the one that deserves immediate attention because any spike in electricity prices will have an outsized impact on low- and middle-income consumers. Those price hikes will be particularly painful in New York and New England, where consumers already pay some of America’s highest electricity prices.
In February, the US Energy Information Administration reported that offshore wind continues to be one of the most expensive forms of electricity generation. The agency estimated that in 2026, producing one megawatt-hour of electricity from offshore wind projects will likely cost about $121. That’s nearly double the cost of generating that same amount of energy with an advanced nuclear reactor ($63) and more than three times the projected cost of producing it with natural gas ($37).
Take away the lucrative federal tax credits, and the EIA projects offshore wind could cost as much as $150 per megawatt-hour in 2026.
The EIA projections enable us to estimate how much Biden’s wind flotilla will cost consumers. If all 30,000 megawatts of offshore wind are built and the turbines operate at a 50 percent capacity factor (meaning they produce at full output half of the time), they will generate about 131.4 million megawatt-hours per year. At $121 per megawatt-hour, that energy will cost about $15.9 billion per year.
Let’s compare that sum with the EIA’s projections for advanced nuclear and natural gas: At $63 per megawatt-hour, generating 131.4 million megawatt-hours with advanced nuclear would cost about $8.3 billion. At $37 per megawatt-hour for natural gas, producing that much energy would cost about $4.8 billion.
Thus, the electricity from 30,000 megawatts of offshore wind could cost consumers roughly $7.6 billion more per year than if it came from advanced nuclear reactors and about $11.1 billion more than if it were produced from gas-fired generators.
And remember, those many billions don’t include the lavish subsidies that the offshore sector will be collecting from the federal government in the form of tax credits or from states like New York, which has pledged $200 million in port infrastructure improvements to support the development of offshore wind projects.
A final point: Foreign corporations will be among the biggest beneficiaries of those subsidies. Britain’s BP, Norway’s Equinor and Denmark’s Ørsted are developing a total of some 6.2 gigawatts of offshore wind capacity in US waters.
Offshore wind is a bad deal for the marine environment, ratepayers and taxpayers. Biden’s plan should be torpedoed before it leaves the harbor.
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