Do the high lease prices indicate an endorsement of unreliable renewable energy or does it mean the developers will make lots of money? Strip away `government incentives’ and would anyone bid on the leases?
The term `government incentive’ hides the real meaning which is subsides to the developers paid for by rate payers. This is a transfer of wealth, not energy development.
Warren Buffett said: “We get a tax credit if we build a lot of wind farms. That’s the only reason to build them. They don’t make sense without the tax credit.” Buffett might have continued, that subsidies are the only reason anyone invests in these things. Buffett might be an opportunistic profiteer, but at least […] (1)
The lease cost is irrelevant to the developers. The cost will just be incorporated into the final price. The wind has a captive government enforced market. If wind generates electricity, the grid operator must accept it regardless of price.
The final price is irrelevant to the New Jersey BPU except for its possible political effect. The BPU proved price was irrelevant when it authorized 3,700 MW of wind turbines without doing a cost analysis.
The claim the offshore wind will supply electricity for two (2) million houses is misleading. That occurs only if the wind is blowing at maximum design speed. Wind turbines actually produce electricity about 45% of the time, so the average number of homes that can be supplied is only 900,000. You just pay for the ability to occasionally supply two (2) million.
(1) https://stopthesethings.com/tag/warren-buffett-wind-farms/
https://www.njspotlightnews.org/2022/02/offshore-wind-leases-auctions-3-billion-bids-six-lease-areas-president-joe-biden/
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