Building renewable energy has costs

A lot of public money has gone into building renewable energy — wind and solar power. Without tax credits, grants and other financial incentives, a lot of it wouldn’t be built. Tax incentives for energy development have always been with us, including higher depreciation rates for oil and gas exploration.

Nevertheless, I don’t think anyone was ready for the recent announcement by Orsted A/S, the largest energy company in Denmark, that it was canceling its contract to build two huge offshore wind farms in New Jersey. It certainly was a surprise to New Jersey which had spent millions of public dollars preparing to receive the electricity once it reached shore.

Orsted basically said that it was going to lose too much money on the deal and so was backing out. All of the tax and financial incentives weren’t enough to make the project viable.

Other wind farm companies, including those involved with offshore Long Island here in New York State, have also been lobbying for more money to keep those projects alive. But where does such money come from? Yes, from you and me the ratepayer. Electricity bills have already been going up to upgrade the electric grid to accommodate more renewable energy and to provide capacity for the push to go all-electric on cars and buses.

Some are now “putting on the brakes,” and resistance is growing as to what all of this is going to cost.

The Public Service Commission recently said “No” to requests for more subsidies for offshore wind here in New York, and the Governor also put a “damper” on things when she vetoed a bill which would have allowed a transmission line connecting offshore power to the grid to cross a public park on Long Island. (What good is offshore energy if you can’t find a place to bring it onshore? Do you know anyone who wants a transmission line built next to them?)

A very significant energy controversy was decided recently by the public in a referendum that took place this past election day in the State of Maine. There 70% of voters rejected a proposal that all private electricity companies in the state be required to sell their assets to a new state-owned electric company which proponents said would advance more renewable power and also reduce electric rates and control costs.

What the voters of Maine may have considered before making this vote was the experience of the “deep thinkers” in New York State who 40 years ago abolished the privately owned electric utility on Long Island, and put those assets instead into a shell, state-sponsored, corporation called the Long Island Power Authority (LIPA.)

That whole fiasco has ended up costing Long Islanders billions of dollars, of which $4 billion of that debt is still carried on LIPA’s books as “restructuring bonds” attributed to the cost of dismantling and decommissioning the only then operating nuclear (non-fossil fuel) power plant on Long Island.

When you fly over the North Sea adjacent to Denmark and other European countries, you see hundreds of offshore windmills producing electricity, so you know that it can be done. Yet, it would appear that the European experience, including the cost of maintaining these machines in a harsh environment, has provided a learning curve – a part of that being that such projects cost big money and that has to be a part of the equation.

There is no doubt that we need more renewable energy in this country. There also is no doubt that the consuming public has to be willing to pay the bill to make it happen.

Rolland Kidder is a Stow resident.


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