Robert F. Kennedy Jr. opposes Cape Wind’s long-stalled plan to cover 25 square miles of Nantucket Sound with 130 massive steel windmill-turbine towers. Among his objections: Wind-powered electricity costs four times more than cheap hydro power from Canada. Even worse, the windmills obstruct views of the sunrise and sunset “sacred” to Native Americans.
RFK Jr. also complains of political chicanery. He is shocked by crony capitalism, in Massachusetts no less! Regulators, he warns, are striking sweetheart deals behind tax payers and rate payers’ backs. Under the influence of “heavy-handed Cape Wind backers,” Massachusetts regulators are holding up a proposed merger of two electric companies until they agree to buy Cape Wind's power.
RFK Jr’s detractors counter that his real agenda is to preserve unobstructed views from the Kennedy compound not his professed concern about costs or “sacred views.” They also point out that his “ecologically pure” proposal to substitute cheaper Canadian hydro power requires building transmission lines through the “sacred” forests of three states. RFK Jr’s detractors also point out that Cape Wind will only raise average electricity bills by $1.25 per month. They even suggest inconsistency or worse. RFK Jr. lobbies for solar power, which shares the inconveniences of higher costs and voracious land use with wind power.
This amusing tussle among the green elite offers revealing insights and raises a series of questions about the economics and political economy of green electricity.
Question No. 1:
Why did Cape Wind propose to locate 130 steel windmill-turbines in RFK Jr.’s backyard, knowing it would raise the ire of the Kennedys, local fishermen, and tourism interests?
Wind power can only be applied in areas that have sustained winds of over 30 miles per hour. In the United States, such areas are located in the Mid West, Northwest, Hawaii, and coastal areas (like Cape Cod). In other words, there are only a few locations suited to wind power. These areas are either already occupied, or are remote, requiring huge investments in infrastructure and transmission. If you must have wind power in New England, off-shore Nantucket is probably your best bet at least that is Cape Wind’s conclusion, not shared by RFK Jr.
Question No. 2:
The most popular internet postings claim that wind power is almost competitive with coal powered electricity. Why are RFK’s cost figures so high for wind-powered electricity?
Engineering estimates show that offshore wind power is twice as expensive as onshore wind power. If political mandates or environmentalist pressure dictate the use of wind power in a state like Massachusetts, there are no possible onshore locations. There is no choice but to locate offshore with the associated capital costs and high prices.
Question No. 3:
Why is so much offshore land (25 square miles) land required?
An underappreciated fact is the land intensity of wind (and solar) power. Under the best of conditions (Offshore Horns Rev Denmark), it takes 13 square miles to produce one twh of electricity. With such a ratio, it would take more than one third of Germany’s land mass to produce Germany’s annual electricity needs (assuming the impossible that Germany could find enough land with high wind intensity).
Question No. 4:
If the cost differences are so great, how is it that Massachusetts electricity consumers will see only minor hikes in their bills? (I imagine Mass households still will not welcome the $1.25 per month increase).
The American Recovery and Reinvestment Act (ARRA) of 2009 provided a cornucopia of benefits and subsidies and continue a long tradition of preferential treatment of green electricity. Among the many benefits is a 2.2 cent subsidy for each kwh produced by wind. Below the surface fester a wide range of other promotions and benefits. These subsidies and benefits transfer costs of wind power from the consumer to the unaware tax payer. The $1.25 price increase, however, confirms the very high price of wind power, despite all the subsidies. Wind power is just a tiny percentage of the total.
Question No. 5:
Are low prices to consumers a good idea?
Economics teaches that prices should reflect costs. If wind power is more expensive, the price to consumers should reflect this fact and send proper signals of scarcity to consumers to use less electricity. These direct and hidden subsidies mask the true resource costs of wind power.
Question No. 6:
Is Cape Wind an example of crony capitalism as RFK Jr. claims?
Of course. In 2009, the Wind Power Energy Association spent $5 million on lobbying. This figure is trivial in comparison to the lobbying, political influence, and crony capitalism of GE, the major wind turbine manufacturer, and other fat cats of the “Big Wind Complex.” Note that Massachusetts regulators (and probably Washington’s) are also party to the conspiracy. By holding the merger of the two electric-power companies hostage to Cape Wind, they are forcing them to buy green electricity they do not want.
Question No. 7:
Is RFK Jr. being inconsistent or hypocritical?
According to his detractors, RFK Jr. lobbies for solar power, which has all the Cape Wind disadvantages about which he complains. According to the textbook definition, the hypocrite label seems to fit.
Question No 8:
What is the biggest lesson to take away?
Everything speaks against the state of Massachusetts as a site for significant wind power generation. Naïve idealists and special interests decided that the state should have wind power generation. The result is high-cost power that adversely affects other activities, such as tourism, fishing, and the unobstructed views from the Kennedy compound. But at least the people of Massachusetts can have a warm and fuzzy feeling that they are saving the planet, G.E. can sell more of its wind turbines, and Cape Wind’s backers can make some big bucks.