While Forbes magazine discussed the interesting, some might say questionable, politics behind the Block Island wind project, its economics are fascinating.
Rhode Islanders will have the honor of paying twice as much for their electricity as do average Americans.
The project is known as Deepwater Wind, which has ordered 5, 6 MW wind turbines from GE to be installed offshore, just east of Block Island.
Rhode Islanders will pay Deepwater Wind 24.4 cents per kWh, while the average American pays 10.4 cents per kWh. In addition, the price will increase contractually by 3.5% annually, which means Rhode Islanders will be paying around 50 cents per kWh in 20 years.
Meanwhile, factoring in these revenues, plus the federal Wind Energy production credit, Deepwater Wind, according to calculations made by Forbes magazine, could receive approximately $1 billion, with a pre tax return of 7.5% … A virtually risk free investment guaranteed by the government.
The rationale for this boondoggle is that it will cut CO2 emissions.
It’s Senator Sheldon Whitehouse of Rhode Island, who has asked for the RICO anti-racketeering law to be applied to those who disagree with the idea that CO2 causes global warming.
In effect, no one should be allowed to claim that this boondoggle is unnecessary.
The media has reported the investment cost of the 30 MW project is $300 million.
The cost would therefore be $10,000 per KW, which is nearly ten times the cost of building a natural gas combined cycle (NGCC) power plant, where an NGCC power plant costs $1,100 per KW.
While Governor Raimondo of Rhode Island, extolls the 300 local jobs being created by the project, which will be temporary, the real jobs are going elsewhere … to France for the turbines, Spain for the towers, Denmark for the blades, and Louisiana for constructing the platforms.
The average American is footing the bill for this boondoggle. The rate payers of Rhode Island will be paying an exorbitant amount for their electricity, and tax payers elsewhere will be paying for the production tax credit.
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Nothing to Fear, Chapter 6, explains the problems with wind energy.
Nothing to Fear is available from Amazon and some independent book sellers.
Link to Amazon: http://amzn.to/1miBhXy
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