Maryland’s “Wind Powered Welfare”

Going Green

Offshore Wind Passes in Senate, Gov. O’Malley’s Signature Next

The construction of a wind power farm off the coast of Ocean City could begin as early at 2017

By Jessica Wilde, Capital News Service

Gov. Martin O’Malley’s offshore wind energy bill is on its way to his desk for a signature, having passed in the House in February and in the Senate on Friday.

Five friendly Senate amendments are expected to be approved easily by the House.

The new legislation will funnel $1.7 billion of ratepayer subsidies over a 20-year period toward the construction of a wind power farm 10 to 30 miles off the coast of Ocean City as early as 2017.

“It’s about a better Maryland for tomorrow,” said Sen. James Mathias Jr., D-Worcester, the former mayor of Ocean City, who changed his vote to support the bill.

O’Malley’s previous two attempts to push the legislation—the first more ambitious —never made it to the Senate floor largely because of concerns about the cost to Marylanders.

His first initiative also failed because utility companies would have had to make nearly 20-year commitments to buy offshore wind energy.



Offshore wind is, by far, the most expensive source of electricity. An offshore wind farm would have to receive 34¢/kWh, wholesale, just to break even over a typical 30-yr plant lifetime. 34¢/kWh is almost three times the average retail residential electricity rate in the U.S.

The much ballyhooed Cape Wind project, off Cape Cod, is projected to have a 454 MW installed capacity. It will cost approximately $2.5 billion to build. This works out to $5,506,608 per MW. A natural gas plant generally costs less than $900,000 per MW.

Cape Wind currently has a long-term contract to sell half its output for 18.7¢/kWh.  The average U.S. residential rate is in the neighborhood of 12¢/kWh.

Maryland has come up with a novel solution to make offshore wind more affordable to consumers…

Opinion: Local Editorial
Martin O’Malley’s wind-power welfare

If offshore wind energy were the way of the future, government would not have to subsidize it at all, let alone to the tune of $1.7 billion.

Maryland Gov. Martin O’Malley, D, justifies the subsidy he will soon provide to offshore wind based on the industry’s enormous upfront costs. He routinely fails to mention that investors routinely swallow large upfront costs to get a piece of industries that promise future profits. In the case of offshore wind, because the industry is not so promising, investors would never back it without O’Malley’s massive pre-emptive government bailout.

O’Malley is campaigning already for the Democratic presidential nomination in 2016. This is the real reason behind the wind power subsidies he will soon sign into law. It is a sad reflection on the integrity of Democrats in the state legislature that they have rubber-stamped O’Malley’s latest corporate welfare plan. Although Marylanders will pay only a small additional amount on average — about $1.50 per month for residential customers, and a 1.5 percent surcharge on Maryland businesses — every penny is being directed to businesses that have O’Malley’s ear. By diffusing the costs of highly concentrated benefits, O’Malley has found a way to squeeze ordinary residents of his state even further than they are currently squeezed, enrich a few wealthy developers, and come off looking like some kind of environmentalist hero.


The Examiner

$1.7 billion in taxpayer-funded subsidies divided by 200 MW works out to $8.5 million worth of SUBSIDIES per MW of installed capacity!!!

They could build a 200 MW solar PV plant for less than the cost of the subsidies!

They could build 2,000 MW of natural gas-powered generating capacity for the cost of just the subsidies…

200MW Of Offshore Wind Blowing This Way

The exact percentage of state electricity sales that must be met by offshore wind under the state RPS will be determined annually by state regulators, and will be based on the creation of “offshore wind renewable energy credits” (ORECs).

Roughly 200 megawatts (MW) of offshore wind capacity will likely be built as a direct result of the bill, and Governor O’Malley has previously said 40 turbines will be built about 10 miles off the coastline, creating 850 green jobs.


Read more at…z0tBdmufETJ.99

The $1.7 billion subsidy will be paid out over 20 years… $85 million per year… $100,000 per year per green job created ($2 million per green job)…

And this is just the cost of the SUBSIDY!!!

At 12¢/kWh and a 38% capacity factor, the Maryland offshore wind farm would generate about $80 million per year in gross revenue. The levelized generation cost (LCOE) would run about $226 million per year.

So, you will have an investment that could never pay itself off or even cover half its LCOE at market prices.

For this monstrosity to break even, with the subsidy, Maryland electricity consumers will have to pay 17¢/kWh.

Maryland taxpayers will have to cover 17¢/kWh, so that Maryland’s electricity consumers will only have to pay 17¢/kWh (assuming that the power company is a non-profit). I guess this will only be a burden on the Marylanders who both consume electricity and pay taxes. 

 Our Department of Energy recently agreed to spend $169 million more of the taxpayers’ money to subsidize similar boondoggles.


One Response to “Maryland’s “Wind Powered Welfare””

  1. Standard Climate Says:

    Reblogged this on Standard Climate.

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