I. Brief summary of current issue: Delaware Beach Towns to accept funds from US Wind.
II. Letter from CRI, Dave Stevenson, to the Beach Town mayors.
III. Critique of PA Consulting Group Delaware Offshore Wind Benefits Report
IV. Local Residents Pro Offshore Wind Comments
V. The US Winds proposed contract, so you can read it yourself.
VI. References
I. BRIEF SUMMARY - CLICK HERE
Basically this offshore wind turbine project is a Maryland project that benefits Maryland, yet Delaware pays the price by having the offshore wind turbines off the coast of Delaware, bringing the cables across our beach and bay, with no decrease in the price of electricity but rather a potential INCREASE in the price of electricity. AND there is no green energy benefit to the environment, but rather a very real environmental cost to the ocean and marine life. This is an all cost no benefit deal, except to the foreign company US Wind, that will make huge profits in the form of taxpayer subsidies while destroying our fragile coast. My prediction: US Wind takes the upfront subsidies and in less than ten years walks away leaving a junk pile of rusty fan blades and a cement ocean floor.
II. LETTER FROM CAESAR RODNEY INSTITUTE - David Stevenson
Dear Mayor,
Regarding the potential Good Neighbor agreement with US Wind.
You have done an excellent job allowing discussion before a vote is taken.
I know the city has been less concerned about the US Wind offshore wind projects because of the distance, and is rightly more concerned about the Skipjack/Garden State projects just 13 miles off Rehoboth Beach. However, the only leverage Delaware has to limit these projects revolves around whether permits will be granted to bring power ashore in a Delaware State Park. If US Wind succeeds in obtaining a permit it will set a precedent pretty much guaranteeing Ørsted will receive one too. The city needs to maintain its autonomy on this issue.
It is also apparent many folks believe these projects are a done deal. Far from it. That was said in 2019 when public pressure ended the effort to bring power ashore in Fenwick Island State Park. It was said in New Jersey about Ocean Wind, but 50 beach towns and Cape May County opposed the projects with resolutions and lawsuits. That pressure kept the state from granting higher subsidies and the projects are gone. North Carolina has walked away from offshore wind. The Empire Wind project off Queens, NY was a done deal, and it is gone along with four other projects in New England.
38th Interject: Offshore wind turbines can still be stopped, but only if we act now!
The US Wind projects are Maryland subsidized in federal waters. The power should be brought ashore in Maryland. Physically there is no reason power can’t come ashore in Ocean City, it will just cost more money. Ocean City has said they will not issue a permit but the Maryland Public Service Commission is on record saying they can overrule Ocean City.
38th Interject: Maryland agreed to this, yet Delaware bears the brunt of the environmental cost!
South Fork Wind near Rhode Island and Vineyard Wind off Nantucket are under construction in a Critical Habitat area for the North Atlantic right whale, and the area includes habitats for a wide variety of ocean life including horseshoe crabs. Woods Hole Oceanographic Institution has received a million dollar grant to study environmental impacts. There are two major contradictory studies on what the operational noise levels of these large industrial turbines will be and that will be measured. I would hope the city would be patient and wait for answers to critical questions before deciding to support, or oppose offshore wind.
38th Interject: Marine quality of life and impact from ocean wind turbines needs to be studied and assessed!
The US Wind presentation allotted most of the time to discussing the potential economic impacts presented in the Term Sheet to the state. It would seem that opened the door to discussing the accuracy of those claims going forward. I attach my critique of those claims.
III. CRITIQUE OF PA CONSULTING GROUP ON DELAWARE OFFSHORE WIND BENEFITS
BY: David T. Stevenson, Director, Caesar Rodney Institute
December 27, 2023
The state of Delaware is negotiating through a Term Sheet(1) with US Wind to permit offshore wind power cables to come ashore at Delaware Seashore State Park just south of the Indian River Inlet Bridge. Power cables would then be laid underwater through the inland bays to Millsboro to connect to a substation near the Millsboro Indian River power generating plant. The offshore wind projects receive large subsidies added to Maryland electric bills to ensure needed financing to construct the projects in federal waters. US Wind has promised economic development payments to Maryland, and promised to hire construction, operations, and maintenance workers in Maryland.
38th Interject: US Wind will receive profit from Maryland taxpayers paying extra on their electric bills. If offshore wind was so good, they wouldn't need subsidies.
An analysis(2) comparing the benefits and costs to Delaware of allowing offshore wind power cables to come ashore was conducted by the PA Consulting Group. This document evaluates the accuracy of claims in that Benefit Cost Analysis (BCA).
The PA Consulting Group study makes these benefit claims:
US Wind will pay the state parks division $350,000 a year in lease payments, increasing 3% a year, for total payments of $9.4 million over twenty years.
US Wind will provide $40 million over twenty years to the state government for use in various community benefit programs with $20 million provided in the first 5 years.
US Wind will provide up to 150,000 Renewable Energy Credits (RECs) a year for twenty years to Delaware electric utilities at no charge to offset the purchase of RECs from other sources. RECs are produced for each megawatt-hour of power generated by the Marwin, and Momentum Wind projects. The free RECs will only be provided from any excess over the number promised to Maryland. PA Consulting estimated the RECs will be worth $76 million to Delaware electricity customers.
PA consulting also estimated Delaware electricity customers will see $253 million in lower electric bills over twenty years. Using the Aurora modeling program they estimated power and capacity value reductions on ratepayer bills of up to $186 (or $9/year); $1,609 (or $77/year); and $162,936 (or $7,759/year) for the average residential, commercial, and industrial customer in Delaware. The savings equal about one half of one percent of annual electric bills(3).
The projects will lower carbon dioxide and air pollution emissions.
NOW THE CRITIQUE OF THAT STUDY......
Emissions reductions
The two offshore wind projects were approved in two different Maryland Public Service Commission dockets using two different consultants(4). Both consultants stated the offshore wind projects would simply replace onshore wind projects that would have been needed to meet Maryland renewable energy requirements. The second consultant went on to calculate emission savings would actually be higher for the onshore wind projects as there would be less transmission energy losses as the onshore wind projects are closer to electricity demand centers.
38th Interject: If ON shore wind projects are more cost effective than OFF shore wind projects, WHY would Maryland choose OFF shore wind turbines??
Lease fees to Delaware State Parks, and community payments
To compare benefit and cost items over time results are compared as Net Present Values (NPV) based on a future value discount rate(5). The typical discount rate used for projects lasting longer than five years is 7%. By reverse calculations we determined PA Consulting used a 3% discount rate. The $9.4 million in nominal lease payments over twenty years has a $3.7 million NPV at 7%, and $4.6 million at 3%. The NPV of the $40 million community benefits package is $9.4 million at a 7% discount rate, and $11.4 million at 3%. As shown below these are the only guaranteed payments in the Term Sheet being negotiated between the state and US Wind with NPV of about $13 million.
Free RECs
The NPV of the free RECs is $26.7 million at a 7% discount rate, $32.4 million at 3%. PA Consulting used a 44% capacity factor for annual offshore wind generation. That level of generation has been demonstrated by five turbines off Block Island, RI, and two turbines off the Virginia coast. US Wind estimated a 44% capacity factor for the larger Momentum Wind project, and 42% for the Marwin project in its guarantees to the Maryland PSC.
If the Marwin project has a 44% capacity factor there may be 43,500 extra RECs (8760 hours X 248 MW capacity X 0.02). However, neither project is likely to generate power 44% of the time. Our regional grid manager, PJM, in its “Effective load carrying capability report”(6) estimates offshore wind capacity at 37%. In addition, the graph below shows the four year average monthly generation of power at the Block Island offshore wind project. The most power is generated during the spring and fall when power demand is at its lowest. As more offshore wind projects are built the electric grid will simply not be able to accept all the power produced in the spring and fall forcing generation curtailment.
38th Interject: So offshore wind turbines are only effective 37% of the time, and most of that time will be during the spring and fall when it's not needed and the power grid can't even accept the generated power. Does this seem like a WASTE?
The 2020 Connecticut Integrated Resource Plan(7) shows curtailment reaching as high as 10% to 20% of generation in figure 5.3 as more projects are built. Also, a report from Europe, “Gone With the Wind? Wind Farm-Induced Wakes and Regulatory Gaps”(8), shows the impact of the wake effect of wind turbines on downwind turbines in the same project can reduce power output by up to 5% to 10%, and one large project can decrease power at a downwind project by up to 20%. Quite simply, it is unlikely there will be any excess RECs to give to Delaware.
38th Interject: Any promises US Wind makes of a financial benefit to Delaware will be Gone With the Wind, literally.
Savings from lower power and capacity costs
The NPV from estimated $253 million savings from lower electricity and capacity cost is $134 million with a 7% discount factor, and $188 million with 3%. So, for example, the $9/year savings on residential electric bills falls to $6/year with a 7% discount rate. More importantly, PA Consultants modeling showed only a 0.5% savings, but the error bar in the modeling could be as high as 2.5% meaning the cost savings is not statistically significant and should be reported as such. The Aurora program sums the results from many runs. The more runs the smaller the error bar. PA Consultants did not state which run setting they chose.
38th Interject: We are choosing to build offshore wind turbines, for a potential benefit of saving $9, NINE DOLLARS, per year. Pave paradise, kill the whales, but we'll each save $9 once a year.
PA Consultants also failed to include any estimate of the cost to run inefficient backup generation often needed to deal with drops in power production by intermittent source such as offshore wind. It is likely those costs could wipe out the projected savings. US EIA Detailed State Data(9) shows onshore wind development moved to 2% a year growth in share of power demand in Texas in 2016 from 1% after investing $7 billion in taxpayer money to expand transmission lines to the windy Texas panhandle. Between 2016 and 2022 wind’s share of power produced in Texas rose from about 11% to over 25%. However, power prices jumped 22.4% in Texas compared to 21.6% nationally suggesting added wind power may have increased, not decreased prices. There are so many pricing variables it is difficult to discern any single cause. The PA Consultant statement offshore wind will save power cost is not credible.
38th Interject: Offshore Wind may actually INCREASE electricity prices!
The cost of lost tourism
PA Consultants only describe potential benefits. Potential costs include lost commercial fishing, increased vessel collisions, and poorly studied environmental impacts. The most likely cost may come from lost tourism and lower property values. The US Bureau of Ocean Energy Management (BOEM) reports Environmental Impact Statements (EIS) showing potential negative visual impacts(10). In multiple EIS documents BOEM reports ocean views will change from pristine to developed with views dominated by turbines. BOEM used a University of Delaware survey(11) of beach goers to calculate potential lost tourism because of the daytime visual blight of turbines on ocean views. The survey showed visualizations of 579’ tall turbines and asked whether people would return to the beach with turbines present. The closer the turbines were to the beach the more people responded they would not return. Since US Wind plans to use turbines between 938’ and 1050’ tall the survey results shown in figure 7 need to be adjusted for the greater visibility which suggest a net 24% of visitors may not return.
38th Interject: The beach and ocean are one of the few remaining vistas left to us where we can gaze and dream as we stare off into the calming expanse of our pristine ocean. Don't we have enough of daily industrial visual intrusions in our lives, like traffic signs, telephone poles, and billboards?
A similar survey of recent renters in the Outer Banks(12) showed 38% would not return based on daytime views, but 54% wouldn’t return based on nighttime views of blinking lights. The UD study showed nighttime visualizations but didn’t report the results. US Wind is often quoted as planning to use an Aircraft Detection Lighting System that would only turn lights on when aircraft are detected by radar. However, US Wind added a clause the system would only be used if it was commercially feasible(13), which it is not as the system has been rarely used. Without a solid US Wind commitment we should assume the system will not be used.
A 2021 Delaware tourism report(14) shows $2.7 billion in tourist spending at the beach, so a 24% loss equals $640 million in lost tourism, sixteen times the PA Consultants benefit estimate. That could mean over 5,000 lost jobs, $200 million in lost wages, and over $65 million in lost taxes according to the tourism report. The UD study also stated property values would fall, but no dollar values were given. A new University of Connecticut study(15) shows when onshore wind turbines are highly visible property values fall 11% the first year after construction, A Zillow search of recent home sales in our beach towns averaged over $1 million, so lost property values could exceed $100,000 per home.
The NPV of the lease payment and community benefit fund totals $13 million over twenty years. Just 1% lost tourism costs twice that amount in just the first year. These are Maryland approved projects that are a very big losing proposition for Delaware. Our state government should not be supporting these projects by issuing permits to bring power ashore in Delaware.
38th Interject: Offshore wind in Delaware is a losing proposition for Delawareans through and through, all cost, no benefit.
IV. LOCAL PRO OFFSHORE WINDFARM COMMENTS
Q: Perhaps you could explain how the wind farm is worse than the coal-fired power plant currently in operation.
A: The coal plant has basically stopped operation and only comes on to maintain voltage control. It is one of the cleanest coal plants in the country and we could add new carbon dioxide capture technology and have base load power. The wind project is unreliable, the most expensive option we ca chose, and an environmental wrecking ball in the ocean. onshore wind and solar are one third the cost, new small modular reactors would be about half the cost and could use existing nuclear waste rods by reprocessing.
Q: Devastating consequences of wind turbines? The bogus claim they hurt whales? The absurd assertion that turbines would use more oil than a fossil fuel plant? Or the fantasy that windmills cause cancer? And the “threat” of foreign owned companies? You don’t seem to have any problem with Shell Oil or BP. The United States benefits from huge amounts of foreign investment…. That creates companies and jobs. Do you really think foreign pirates equipped with binoculars are going to harvest military secrets while lurking in windmills? Do you think they might learn a lot more from satellite pictures or just reading a good newspaper? Grow up!
A: The only claim we have made in regards to this list is there is a very real risk operational noise will harm whales, along with a problem with the wind wake effect reducing phytoplankton concentrations needed for feeding. Dr. Sean Hayes heads the US Marine Mammal Protection Agency and has recommended no wind turbines within 20 kilometers of a critical North Atlantic right whale feeding area which would probably eliminate the lease areas near Nantucket. There is a debate on operational noise that will soon be settled by measuring sound from turbines under construction. No new project approvals should be made until these and other uncertainties are answered.
Shell and BP are both major partners in offshore wind projects.
V. US WIND PROPOSED TOWN CONTRACT
OK, Mighty 38th, forewarned is forearmed. Now go to the Bethany Beach Town Hall meeting this Friday 1/12/24 2 pm!
-END-
I. BRIEF SUMMARY OF CURRENT ISSUE: BEACH TOWN MAYORS AND US WIND BRIBE
Delaware’s seven beach mayors part of the Association of Coastal Towns are discussing whether to accept US Wind donations to each town and how this will be tied to DNREC's withdrawal of financial support of beach replenishment.
US Wind is proposing $100,000 per year to each town that accepts its offer to stay silent and not protest the possible devastating consequences to the environment, to our military security, to our fishing industry and to our pocketbooks.
Gov. John Carney and DNREC Secretary Shawn Garvin are committed to allowing foreign offshore wind farm entities access to the most precious natural resource that Delaware has, our coastline, to bring cables ashore. But what many may not realize is that the mayors still have a powerful voice and ability to impede US Wind and stop its cables from coming ashore in Delaware. Citizens should focus their attention on these mayors and the deals they are making.
The mayors are deciding whether to accept payments from US Wind in exchange for their silence. There's the carrot. But there is also a big stick that is being applied to bear against them as well. Delaware is letting the beach towns know it may no longer cover a portion of the cost of beach replenishment and the beach towns may have to pick up that cost. In this way, DNREC is encouraging the mayors to take the money from US Wind, or else cough up much more in the form of beach replenishment requirements.
For beach nourishment projects, costs are shared – 70% from the federal government, 30% from DNREC. To be eligible for a project with the Army Corps, the beach must also meet certain public accessibility requirements. It is clear our towns' beaches are not only accessible to the public, but also a huge financial benefit to the state. In 2021, the tourism industry generated $620 million in tax revenue. Without tourism, each Delaware household would pay an additional $1,608 in taxes, per VisitDelaware.com. A report from 2012 showed that beach communities and surrounding areas support 59,000 jobs and generate $711 million in tax revenue, ranking the coast-related economy on par with agriculture among the state’s top industries. The coast-related activity also provides more than 10% of the state’s total employment, taxes and business production.
But now DNREC is threatening to withdraw its portion of beach replenishment and shift this burden onto the beach towns. DNREC announced a new study that will explore the economic benefits of beach nourishment, as well as search for new ways to fund the projects.
Right now, state and federal taxes cover the project, but DNREC says due to increased demand and rising costs, it may become difficult to pay for it.
Fenwick Island Mayor Natalie Magdeburger has already declined to accept US Wind’s money. Bethany Beach will hold a meeting at 2 p.m., Friday, Jan. 12 about the topic.
Please contact our beach mayors and tell them to decline US Wind’s proposal.
VI. REFERENCES:
1) Governor John Carney, “US Wind Term sheet”, https://governor.delaware.gov/wp-content/uploads/sites/24/2023/12/US-Wind-Term-Sheet_001.pdf
2) PA Consulting Group, Inc., “”Delaware Offshore Wind Benefits”, https://www.caesarrodney.org/pdfs/PA_Consulting_DE_OSW_Impact.pdf
3) US Energy Information Agency, Electric Power Monthly, October 2023, https://www.eia.gov/electricity/monthly/
4) Maryland Public Service Commission Docket search at https://webpsc.psc.state.md.us/DMS/ , enter Docket 9666, go to item 33, ICF International “Evaluation and Comparison of Marwin II and Skipjack Wind proposed offshore wind project applications” Exhibits 56 and 59. Then search Docket 9431, item 85, page 159
5) Caesar Rodney Institute, Excel spreadsheet, “US Wind present value of term sheet Delaware benefits”, https://www.caesarrodney.org/pdfs/US_Wind_present_value_of_term_sheet_Delaware_benefits_(1).pdf
6) PJM, December 2021 Effective Load Carrying Capability (ELCC) Report Table 2”, https://wired.pjm.com/-/media/planning/res-adeq/elcc/elcc-report-december-2021.ashx
7) State of Connecticut, “Final 2020 Integrated Resource Plan Figure 5.3”, https://portal.ct.gov/-/media/DEEP/energy/IRP/2020-IRP/2020-Connecticut-Integrated-Resources-Plan-10-7-2021.pdf
8) Elsevier, Eirik Finserås, University of Bergen, Bergen, Norway, “Gone With the Wind? Wind Farm-Induced Wakes and Regulatory Gaps”, https://docs.wind-watch.org/wake-effect.pdf
9) US Energy Information Agency, “Detailed State Data”, https://www.eia.gov/electricity/data/state/
10) US Bureau of Ocean Energy Management, “Draft Environmental Impact Statement section 3.6.9”, https://www.boem.gov/sites/default/files/documents/renewable-energy/state-activities/MDOffshore%20Wind%20final%20DEIS_2023_Oct02_508.pdf
11) University of Delaware, “Effects of Offshore Wind Power Projects on Recreational Beach Use on the East Coast of the United States Figure 7”, https://www.semanticscholar.org/paper/Atlantic-Offshore-Wind-Energy-Development%3A-Values-Parsons-Firestone/91b0ede146b8701cb44d72c58f09b29533df3cdf
12) North Carolina State University, “The Amenity Costs of Offshore Wind Farms: Evidence from a Choice Experiment”, https://www.aminer.org/pub/5c8c9f8a4895d9cbc6134d87/the-amenity-costs-of-offshorewind-farms-evidence-from-a-choice-experiment
13) US Wind, “Construction & Operations Plan, page 23 of Volume 2”, https://www.boem.gov/sites/default/files/documents/renewable-energy/state-activities/US%20Wind%20Construction%20and%20Operations%20Plan%20Volume%20II_Rev%205.pdf
14) State of Delaware Tourism Bureau, “The Value of Tourism 2021”, https://www.visitdelaware.com/sites/default/files/2023-05/The%20Value%20of%20Tourism%202021%20FINAL.pdf
15) Elsevier, “Commercial wind turbines and residential home values”, https://eta-publications.lbl.gov/sites/default/files/1-s2.0-s0301421523004226-main.pdf
Online link to this report; https://www.caesarrodney.org/pdfs/Critique_of_PA_Consulting_Group_DE_Offshore_Wind_Benefits_Report_(2)2.pdf
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Upcoming 2023 Meetings
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