Green energy is all the rage, and Ohio is jumping on the bandwagon with little regard to financial considerations. While the emerging industry creates jobs and is more environmentally friendly than the traditional energy industry, it comes with a cost – in some cases, a very high cost.
The proposed Lake Erie off-shore wind turbine project is a great example of wasteful spending in the name of going green and creating jobs. Initially, this project is supposed to include five turbines, which will be the first of their kind in North America. These five turbines, to be built by 2012, will cost approximately $100 million and create up to 600 jobs. If the pilot project is a success, a total of 1,200 turbines will be built in Lake Erie over the next 20 years. The complete project will cost $31 billion and could create up to 8,000 jobs according to a recent economic impact study.
Financially, the wind turbines are a bad proposition for Ohio. Of the $31 billion, only $7.8 billion will go toward wages. Thus, in terms of wages, each job will cost $975,000 with approximately $23 billion going toward infrastructure, equipment and other expenses. Additionally, over a 20 year period, state and local governments will only collect $587 million in tax revenues from the project. Thus, the initial $31 billion investment will not be recovered by taxes for 1,050 years (excluding interest payments).
Since the life-span of well-maintained off-shore turbines is only 30 to 40 years, it will be impossible for investors (whether public or private) to recoup their investments in the project. If the government completely financed the off-shore turbines, it would still owe nearly $30 billion when the original turbines expire.
But that's not all, the price of the energy they produce will be higher than other options Ohioans have:
Electricity from the off-shore turbines is expected to cost 23 cents per kilowatt-hour. In contrast, electricity from Ohio’s land turbines costs roughly 9 cents per kilowatt-hour while electricity from coal only costs 4 to 6 cents per kilowatt-hour. Off-shore turbine energy will cost 2.5 times more than energy from land turbines and almost six times more than energy from coal.
So why would anyone want to go forward on this project? It's costly; it's not going to give us cheaper energy; and the payback - not counting interest - is 1,050 years!!!
Yes, this qualifies for 'stuck on stupid' designation.
No business person or individual would spend their own money on such a fiasco. We cannot let Ohio or the federal government spend our tax dollars so frivolously.