The Beacon Hill
8 Ashburton Place
Beacon Hill Institute: Cape Wind developer ‘blowing
smoke’ by ignoring costs of building offshore
BOSTON - Standing by the findings of its extensive cost-benefit analysis, the Beacon Hill Institute today issued a point-by-point response to the developer of a proposed wind farm on Nantucket Sound. Stressing that Cape Wind fails to take note of the economic realities surrounding its project, BHI continues to argue that the project, which aims to build 130 wind turbines on Nantucket Sound, is a bad deal for taxpayers and electric power ratepayers.
In a report released this week (March 16), three economists from the Beacon Hill Institute argue that Cape Wind’s proposed 130-turbine wind farm in Nantucket Sound fails a basic test: its economic costs ($947.2 million) exceed its economic benefits ($735.5 million). If the wind farm were built, it would impose a net cost on society of $211.8 million. The only reason the project would be commercially viable is the subsidy of $241 million that it would receive from federal taxpayers and electric power ratepayers.
BHI recognizes that public subsidies for alternative energy are valuable incentives and should be encouraged. However, this subsidy, without which the Cape Wind project would not be financially viable, exceeds by $74 million the subsidy to which the project would be eligible on the basis of cost-benefit criteria.
Upon the release of the BHI report, Cape Wind issued a five-page response seeking to discredit the institute’s research and methodology. Claiming that BHI understated the benefits to the public, Cape Wind, alleges that the institute’s work is the result of "shoddy research."
"In fact, it is Cape Wind’s remarks that are shoddy,” said David G. Tuerck, Executive Director of the Beacon Hill Institute. "Before its leaders attack our work on economic grounds," said Tuerck" tthey should familiarize themselves with the principles of economics. Perhaps after they have done so, we can engage in a constructive debate about the economic merits of their proposal.” Tuerck further said, quoting BHI's response, "Nothing that Cape Wind claims and no amount of criticism that it hurls our way will change the reality here. The project will turn Nantucket Sound into an industrial park chiefly for the benefit of Cape Wind and not for that of the greater society."
Along with earlier studies on the Cape Wind project, the BHI rebuttal to Cape Wind can be found here.