Jun 02 2011

Economically Feasible Projects

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One of the biggest issues with installing renewable energy generators is deciding whether or not they are economically feasible, meaning whether the cost of constructing and maintaining them will be offset by they amount of money they save from generating their own energy. One project in particular that is being questioned is in the Gulf of Maine where a $20 billion offshore wind project was proposed. The old Gov. John Baldacci supported the project in particular because it would decrease Maine’s reliance on foreign oil needed for heating homes and driving cars. The wind project would reduce heating and transportation costs by providing sufficient energy for homes and electric cars (which hoped to be more widely used in the future). However, under the new administration of Gov. Paul LePage, the project is being viewed with more skepticism. While the project would be a good step towards becoming less dependent on foreign oil and non-renewable energy in general, the costs of supplying energy would increase, making the project less economically viable. Ken Fletcher, director of the Governor’s Office of Energy Independence and Security, estimates the initial costs would cause the average price for electricity in Maine to rise from 16 cent per kilowatt-hour to 27 cents. He predicts the price will fall as the technology is further developed but the time span is uncertain. The new administration has concluded that these prices are too high to impose on the Maine ratepayers and therefore, the project is being questioned. It is these costs alone that impose the greatest obstacle to establishing the turbines.

When taking only the price of generating energy into account, then the answer is clear to whether or not to install them. However, doing a complete benefit-cost analysis of the situation would take into account the extra benefits of setting up the turbines including becoming more energy independent, taking steps towards renewable energy, making renewable energy more standard to the public, and reducing the amount of carbon emissions. With these extra benefits added to the costs of an additional 11 cents per kilowatt-hour, the actually “price” increase of electricity provided from renewable resources is not as drastic. But until these benefits are given more importance, expense remains a large barrier to establishing renewable energy generators.

Another site that shut down their wind project due to it not being economically feasible was a wind turbine project in the Pamlico Sound. The project was  jointly proposed between Duke Energy and UNC-Chapel Hill. It was going to be one of the first steps towards establishing off-shore wind farms off the North Carolina coast. However, after realizing that the costs amounted to $88 million for one turbine, the project was shut down. Hopefully with time and research wind projects will become less expensive, and therefore more economically viable. A change in goals and morals would also help push these projects along. Rather than focusing only on whether these projects will lower costs or produce a profit, a wider view could be taken to see the entire range of benefits renewable energy technologies offer.




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One Response to “Economically Feasible Projects”

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