Offshore wind developers in the U.S. have promised to create thousands of “million-dollar” jobs.
But those dollars won’t flow into New York workers’ paychecks.
Rather, they’re just the sum total of the subsidies local taxpayers and utility ratepayers will expend to keep offshore wind afloat—as if New Yorkers’ electric bills aren’t high enough.
Consider Ørsted, the Danish government-owned company that is developing the 12-turbine, 132-megawatt Southfork Wind and the 84-turbine, 924-megawatt Sunrise Wind projects, which will be built 30 miles east of Montauk Point, Long Island.
Ørsted is also behind the 98-turbine, 1,100 megawatt Ocean Wind project along the southern New Jersey shore, which just rewarded it with several billion dollars in tax credits that were supposed to have been returned to New Jersey ratepayers
According to Ørsted’s Southfork Construction and Operations Plan (COP), Southfork will require 166 construction workers each year during the two-year construction period and another 10 jobs each year for operation and maintenance over the project’s 25-year expected lifespan.
That’s a total of 582 “job-years” (economic jargon for one full-time equivalent job for one year).
The larger Sunrise Wind project supposedly will create 800 construction jobs, or 1,600 job-years for the two-year construction period.
It will probably create another 60 or so jobs for operation and maintenance, so that’s another 1,500 job-years over the project’s 25-year lifetime.
Total job-years for both projects: about 3,700. All those new jobs sound great, but they will cost U.S. taxpayers and LIPA ratepayers billions of dollars.
Taxpayers will be forced to pay Ørsted generous subsidies in the form of a 30% investment tax credit (ITC) to offset construction costs, plus a production tax credit (PTC), currently $26 per megawatt-hour, for every unit of electricity it generates during its first 10 years of operation.
Although Orsted will not reveal the estimated cost to build either project, U.S. government calculations suggest the cost to build both projects will be almost $7 billion.
That means taxpayers will be required to pay Ørsted an ITC of more than $2 billion.
The PTC dollars that Ørsted collects will depend on how much electricity they generate.
Together, both projects are supposed to generate around 4 million MWh each year; that’s the amount of electricity consumed annually by 600,000 average homes. That also means taxpayers will pay another $100+ million each year to Ørsted – over $1 billion in total over 10 years.
Together, the tax credits alone will likely total over $3 billion—over $800,000 each year for every worker Ørsted claims it will hire.
But the subsidies don’t end there. Both projects have sweetheart long-term contracts that will force LIPA ratepayers to pay Ørsted an average of $120 per MWh for the two projects’ electricity.
By comparison, wholesale electric prices in the New York Independent System Operator’s Long Island zone averaged around $43/MWh for the first half of this year.
And, because the wind doesn’t blow all the time, ratepayers will have to pay for costly backup power, too. LIPA ratepayers effectively will be forced to pay for the same electricity twice.
Add it all up and the tax credits and price subsidies for Southfork Wind and Sunrise Wind will likely cost $6 billion.
For the estimated 3,700 job-years, that means taxpayers and LIPA ratepayers will be forced to pay over $1.6 million for each annual FTE job created.
Put another way, each full-time job will cost the equivalent of $800 per hour.
That doesn’t count the hundreds of jobs that will be lost because of the devastation those wind farms will cause to some of the most productive fisheries in the world, and it doesn’t count the jobs that will be lost as electric rates soar.
All told, these two projects will cost taxpayers and LIPA ratepayers billions of dollars and likely cause more jobs to be axed than are created.
But the two projects, like all other offshore wind projects, will enrich all the right people, which, perhaps, was the real objective from the get-go.
As President Biden might say, “C’mon, man!”
Jonathan Lesser is the president of Continental Economics and an Adjunct Fellow with the Manhattan Institute.
This story originally appeared on NYPost
