The Cost and Economic Impact of New Jersey's Offshore Wind Initiative
July 19, 2011
A law that orders the state of New Jersey Board of Public Utilities (BPU) to develop an offshore wind energy certificate program that would support at least 1,100 megawatts (MWs) of generation from qualified offshore wind projects was signed by Governor Chris Christie on August 19, 2010. The law also provides subsidies to potential offshore wind developers.
Researchers at the Beacon Hill Institute have conducted a cost-benefit analysis of 1,100 MWs of offshore wind power for New Jersey. The findings are as follows.
- The project will produce a net cost of $3.245 billion to New Jersey, within a range of $2.106 billion and $4.137 billion.
- New Jersey's electricity prices will increase by 2.1 percent in 2017, within a range of 0.5 percent and 4.2 percent.
- From 2017 to 2036, the average household ratepayer will pay $431 in higher electricity costs; the average commercial ratepayer will pay an extra $3,054 and the average industrial ratepayer an extra $109,335.
- By 2017 New Jersey will lose an average of 2,219 jobs, within a range of 528 jobs and 4,440 jobs.
- Annual wages will fall by an average of $111 per worker, within a range of $26 per worker and $222 per worker.
- Real disposable income will fall by $330 million, within a range of $79 million and $660 million.
- Net investment will fall by $48 million, within a range of $11 million and $95 million.
Source: David Tuerck, Paul Bachman and Ryan Murphy, "The Cost and Economic Impact of New Jersey's Offshore Wind Initiative," Beacon Hill Institute, June 2011.
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