Wind Energy, Onshore Case—Wind Turbine Capital Costs and Tax Breaks12 Apr

In January 2009, Gov. Deval Patrick set a goal of developing 2,000 megawatts (MW) of wind power capacity, enough to power 800,000 Massachusetts homes, by 2020. This post addresses the unrealistic expectations of that goal in terms of onshore wind turbines. Please see the post of April 5 for other onshore wind energy issues. (The offshore case will be treated in future posts.)

Issue 3: High Capital Cost of Wind Turbines

The total capital cost of installing 1,028 MW of onshore wind in Massachusetts is approximately $2.5 billion based on $2,438 per MW. The following table, from the Institute for Energy Research, compares the capital costs of competing electricity generating technologies.

Overnight capital cost, new generating technologies ($2,010 per kilowatt)

  • Conventional natural gas combined cycle—$978
  • Conventional combustion turbine—$974
  • Advanced combustion turbine—$665
  • Onshore wind—$2,438
  • Offshore wind —$5,975

Issue 4: Tax Breaks Needed to Sustain Wind

Onshore wind—and even more so for offshore wind—has capital costs much greater than the capital costs of conventional fossil fuel systems as indicated in the previous table. This cost compels state and federal governments to provide financial incentives that promote the deployment of renewable energy systems to help offset these large capital costs. According to the Database for State Incentives for Renewables & Efficiency, incentives in Massachusetts include

  • excise tax deduction for solar or wind-powered systems
  • excise tax exemption for solar or wind-powered systems
  • commonwealth wind incentive program—commercial wind initiative grant
  • commonwealth wind incentive program—commercial wind initiative loan
Tags: , , , , , , , , , , , ,

Leave a Reply

Time limit is exhausted. Please reload the CAPTCHA.

About Dr. Everson

Prior to forming this SBIR consultant practice, Dr. Jeffrey Everson was director of business development for QinetiQ North America’s Technology Solutions Group (previously Foster-Miller, Inc.).

Dr. Everson has won and been the principal investigator for several SBIR programs, including a Phase I program for NASA, a Phase I project for the U.S. Air Force, and Phase I and II contracts from the U.S. Department of Transportation. For the Phase II program, he received a Tibbetts Award for exemplifying the best in SBIR achievement.

Previously Dr. Everson held senior scientist positions at Battelle Memorial Institute, The Analytic Sciences Corporation (TASC), Honeywell Electro Optics Systems Division, and Itek Optical Systems Division.

He holds a PhD in physics from Boston College and a MS/BS in physics from Northeastern University.

Contact

For more information about how JHEverson Consulting can help your company with its SBIR and STTR proposals, please contact Jeff Everson.

JHEverson Consulting is based in the Boston area but consults for clients throughout North America. It also is supported by affiliated consultants.