Offshore Wind Farm Poses Significant Economic and Environmental Costs; San Francisco Leaps Into Solar Power

Energy analyst Glenn Schleede has once again exposed the problems with wind power in comments he has submitted to the U.S. Army Corps of Engineers, which is conducting an economic and environmental analysis of a proposed offshore wind farm.

The wind farm proposed by Winergy LLC would be located five miles off the coast of the eastern shore of Virginia. In a preliminary analysis, the Corps determined that the project would not require an Environmental Impact Statement. Schleede disagrees, saying that the Corps has "underestimated the potential environmental impactincluding onshore impact" of the project.

The wind farm would produce approximately 2.5 billion kWh of electricity per year, assuming a generous 30 percent capacity factor. The wind turbines themselves would cover 57 square miles of the Atlantic Ocean, yet would produce slightly less electricity than a "new baseload 350 MW gas-fired combined cycle generating unit," which would "occupy only a few acres." Moreover, the amount of electricity produced would only equal approximately 3.3 percent of the total electricity produced in Virginia.

Schleede points out several potential adverse effects that should be mitigated as a condition to awarding any permits, including impacts that would not be limited to the 57 square miles of ocean. "Feeding such a potentially large (975 MW, at times), highly variable (from 0 to 975 MW), and often unpredictable amount of electricity into an onshore transmission line and electric grid would be a significant burden on existing onshore transmission capacity and the stability of a regional electric system that must be kept in balance (e.g., voltage, frequency)."

The addition of wind capacity would likely "impair rather than enhance electric system reliability," says Schleede. The Corps should also take into account the need for backup generation and transmission capacity as part of the full costs of the wind farm.

The Corps should also have a firm grasp of wind energy economics and especially the role of federal subsidies, says Schleede. "In some cases, the value of the subsidies may exceed the revenue wind farm owners receive from the electricity that they sell. Schleede estimates that Winergys proposed wind farm would receive an annual tax credit of more than $46 million. The project would also qualify for accelerated depreciation and would be able to write off the entire $900 million in estimated capital costs in 6 years. Yet the annual revenue from selling electricity would be only a little over $52 million. Schleede also notes that tax sheltering through accelerated depreciation often leads to early sale or abandonment of wind farms.

Finally, Schleede argues that rather than being environmentally benign, wind farms entail significant environmental costs. He notes the opposition to wind farms is growing around the world, "often due to the adverse impact of wind farms on environmental, ecological, scenic, and property values."

On Nov. 20, Stanford University announced the creation of the Global Climate and Energy Project (G-CEP). The purpose of the project is to "engage in research to develop technologies that foster the development of a global energy system where greenhouse emissions are much lower than today." It may also be seen as addressing the challenge posed by the article in the November 1 issue of Science, which we reported in the last issue.

Funding commitments from three major corporations totaling $225 million over the next 10 years were also announced, with several other corporations expected to make additional commitments in the near future. ExxonMobil, the worlds largest publicly-traded petroleum company, plans to contribute up to $100 million; General Electric, the world leader in power generation technology and services, $50 million; and Schlumberger, a global technology services company, $25 million. Stanford engineers and scientists will do much of the research, but will be joined by other major institutions in North America, Europe and Asia.

The project was immediately criticized as inadequate, and ExxonMobils role was attacked. "Im somewhat skeptical, given the history of some of the companies involved in this, that it represents a dramatic change in their resistance to aggressive federal and state policy action on the issue," said Alden M. Meyer, director of government relations for the Union of Concerned Scientists.

"This could be seen as another effort [by ExxonMobil] to say, Were doing something, but this is a complex problem thats going to take decades to solve and, in the meantime, lets not do anything aggressive with fuel economy standards or anything else that actually reduces oil use today," he said (Los Angeles Times, November 21, 2002).

Lee Raymond, chairman of ExxonMobil, responded that, "Our investment in G-CEP is a demonstration of our long-held belief that successful development and global deployment of innovative, commercially viable technology is the only path that can address long-term climate-change risks while preserving and promoting prosperity of the world's economies."

Following a major referendum last year in which San Francisco residents approved a $100 million bond measure to install as many solar panels in the city as the rest of the nation does all year, Mayor Willie Brown announced a $7.4 million project to install solar panels on the roof to the Moscone Convention Center. "The Moscone Center project itself couldnt be better. It is a gem which should make city leaders across the country salivate," said Brown. "It would be fiscally irresponsible not to do a project like this" (Associated Press, November 22, 2002).

The economics of the project dont look good, however. The project, which will also include retrofitting for energy efficient fixtures, will save the city a mere $210,000 per year, meaning it will take more than 35 years for the project to "pay for itself (San Francisco Chronicle, November 22, 2002)." Several other cities are considering following San Franciscos example. Brown says that he has heard from 15 other cities that are considering similar programs, including San Diego, Denver and New York (Los Angeles Times, November 22, 2002).