Controversy Over Economic Benefit of Building the Great Lakes Offshore Wind Farm

Netherlands Offshore wind farm. Photo courtesy of knowledge.allianz.com.

Depending on what side your on, the evolving plans for an offshore wind farm in the Ohio waters of Lake Erie are either an economic boom for the state or a disaster that will cost taxpayers billions.

The inital project will be a five-turbine, 20 megawatt pilot wind farm that will be five-to-ten miles offshore of Cleveland. Construction on the initial phases is tentatively scheduled to be completed by late 2012.

General Electric has committed to providing the wind turbines and maintenance service for the initial 20-megawatt wind farm. After completion, it’s expected to be followed by subsequent projects with a long-term goal of 1,000 megawatts in the Ohio waters by 2020.

The Lake Erie Energy Development Corp. (LEEDCo) believes the economics of scale will reduce energy costs. “We aim to develop a cost-effective approach for installing and maintaining offshore wind turbines,” said Dr. Lorry Wagner, the company’s president.

“We’re confident that working with GE, our combined efforts will be able to promote a self-sustaining and growing market for offshore wind in Lake Erie. We know that it will provide a lot of economic opportunity and emissions-free energy for northern Ohio,” she added.

Not everyone agrees with this assessment. Mary McCleary, an analyst with the Buckeye Institute for Public Policy Solutions, warns that, “Financially, the wind turbines are a bad proposition for Ohio.”

Ms. McCleary says that, “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,” but the problem is that, “over a 20-year period, state and local governments will only collect $587 million in tax revenues from the project.

“The initial $31 billion in investments will not be recovered by taxes for 1,050 years, excluding interest payments. Since the lifespan of well-maintained offshore turbines is only 30-to-40 years, it will be impossible for investors to recoup their investments in the project.”

Despite warnings, Ohio Governor Ted Strickland is in full support of the wind farm project. In a speech, he said, “This partnership will not only advance offshore wind technologies, it will also advance Ohio’s economy. We are eager to continue the state’s strong collaboration with GE and LEEDCo as we pursue this exciting, first of it’s kind initiative in Lake Erie.” This will be the first freshwater wind farm in the United States.

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