The Issue Brief examines why energy costs are a primary concern for New York in its ability to retain and attract business and create jobs in a competitive global economy, and how the State is addressing these challenges through a portfolio of economic development programs.
The study determined that the total economic impact of the phased project would be approximately:
- 350 MW Project: $1 billion in sales, 8,700 job-years and $610 million in wages (in present-year dollars).
- 700 MW Project: $3 billion in sales, 17,000 job-years and $1 billion in wages. A preliminary evaluation of port facilities found that the Howland Hook Marine Terminal, located on Staten Island, is expected to be the most viable New York State option to host the project's construction-related onshore activities.
The report estimated the economic and fiscal impacts that would occur statewide and in Barnstable County and statewide during the manufacturing/assembly (M/A) and construction/installation (C/I) and operation phases of the Cape Wind project. Positive economic and fiscal impacts during the M/A and C/I phase include: creation of between 597- 1,013 direct, indirect, and induced jobs; increase in labor income of between $32-$52 million annually; increase in property income of between $9.2-$14.8 million annually; and, increase in corporate income tax revenues of between $1.3-$2.1 million annually. Positive economic and fiscal impacts during the operation phase include: annual permanent employment increase of 154 jobs; annual labor income increase of $6.9 million; personal income tax revenue increase of $346,500 annually; corporate income tax revenue increase of $113,900 annually; and, annual property tax revenue increase of $279,678.
Summary of the direct and indirect economic development impacts of offshore wind energy.
Volume II includes detailed data and discussion used to develop recommendations in Volume I.
The report offers an asssessment of New Jersey's renewable energy market and provides recommendations for the future direction of the New Jersey Board of Public Utilities' (BPU) clean energy programs. The report recommends establishing incentives for offshore wind at $2,745/kW on a capacity basis, or $50.25/MWh on a performance basis. The technical potential of offshore wind is estimated to be 2,500 MW by 2020, and its economic potential is 2,250 MW by 2020. Offshore wind is rated as New Jersey's second largest potential renewable energy resource, after solar.
The Division of Rate Counsel's consultant states that the project developer has not provided adequate information on the costs and benefits of its chosen direct drive technology, and has not explained how the current configuration of its project is consistent with the New Jersey Statutes. The consultant states that the Fishermen's Energy (FERN) Atlantic City Windfarm project will be one of the most expensive projects in the world on a historic basis.
The study projected wholesale power prices over the period 2013-2037, for scenarios with and without Cape Wind in service, and quantified the expected reduction in wholesale power prices and wholesale electricity costs that would result from the power supplied by the project. The study found that adding Cape Wind would lead to a reduction in the wholesale cost of power averaging $185 million annually over the 2013-2037 time period, resulting in an aggregate savings of $4.6 billion over 25 years. With Cape Wind in service, the study projects that the price of power in the New England wholesale market would be $1.22/MWh lower on average.
The report evaluates the merit of several short- and long-term initiatives for Maryland's energy resource future. The reference case involves the least-cost addition of a gas turbine peaking plant and/or new gas-fired combined-cycle plant. Using the NRG BlueWater offshore Delaware project as a proxy for the economic benefits associated with offshore wind, the report concludes that the high cost of building and operating offshore wind is unfavorable, particularly in relation to onshore wind projects in Maryland or elsewhere in the PJM region. Marylandﾒs investor-owned utilities' share of the total direct project costs would amount to $1.3 billion, about 60% of the total project costs. Project benefits amount to $1.04 billion. The project's economic value-added (EVA) is negative $198 million.
The report estimates the range of the levelized cost of electricity for offshore wind energy to be between $120-155 per MWh. The technical and practical potential of offshore wind was not estimated because "available technologies have not achieved maturity or permitting issues introduce uncertainties."