Offshore wind developers in the United States have made grand promises of creating high-paying jobs, but unfortunately, these promises do not extend to the hardworking people of New York. Instead, the so-called million-dollar jobs are funded by local taxpayers and utility ratepayers through subsidies, further burdening already high electric bills. Take for example Ørsted, a Danish government-owned company responsible for projects like the Southfork Wind, Sunrise Wind, and Ocean Wind. These projects will be constructed off the coast of Long Island and the southern New Jersey shore, with Ørsted receiving billions of dollars in tax credits that were meant to benefit ratepayers in New Jersey.
In the case of Ørsted’s Southfork Wind, their construction plan estimates the need for 166 construction workers per year during the two-year construction period, as well as 10 jobs per year for operation and maintenance over the project’s lifespan. This adds up to a total of 582 job-years. Similarly, the larger Sunrise Wind project is expected to create 800 construction jobs, or 1,600 job-years, with additional jobs for operation and maintenance. The combined job-years for both projects amount to approximately 3,700. While these numbers may appear promising, the reality is that taxpayers and LIPA ratepayers will foot the bill, costing them billions of dollars.
Taxpayers will be required to provide generous subsidies to Ørsted, including a 30% investment tax credit (ITC) to offset construction costs and a production tax credit (PTC) of $26 per megawatt-hour for the first 10 years of operation. The estimated cost of building both projects is around $7 billion, meaning Ørsted will receive an ITC of over $2 billion. The PTC payments will depend on the amount of electricity generated, estimated to be around 4 million MWh per year. This translates to taxpayers paying Ørsted over $1 billion in total over 10 years. In total, the tax credits alone will likely amount to over $3 billion, meaning taxpayers will be paying over $800,000 each year for every worker Ørsted claims to hire.
But the subsidies don’t stop there. LIPA ratepayers will be locked into long-term contracts, paying an average of $120 per MWh for the electricity generated by both projects. By comparison, wholesale electric prices in the area averaged around $43/MWh in the first half of the year. On top of that, ratepayers will also have to bear the cost of backup power when the wind is not blowing, essentially paying for the same electricity twice.
When we add up all the tax credits and price subsidies, it is estimated that Southfork Wind and Sunrise Wind will cost taxpayers and LIPA ratepayers a staggering $6 billion. This means that each job-year created will cost over $1.6 million, or the equivalent of $800 per hour for a full-time job. This economic burden does not even factor in the detrimental impact these wind farms will have on the local fishing industry and the subsequent job losses. Additionally, as electric rates soar, more jobs are likely to be lost.
In the end, these projects will cost taxpayers and ratepayers billions of dollars while not delivering the promised benefits in terms of job creation. It seems that the true objective was to enrich a select few, rather than prioritize the well-being of the workers and taxpayers. As President Biden might say, “C’mon, man!”
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