My next door office neighbor* writes that benefit-cost analysis justifies some wind power subsidies:
Aggregating the costs reveals that the project has approximately $121 million in costs and approximately $139 million in benefits. The project is therefore estimated to generate nearly $18 million in positive net benefits. From a social standpoint, the project provides positive net benefits and should be undertaken. The question is less clear for the developer. With $20 million of the benefits arising from indirect sources such as environmental and health, the financial viability of the project depends on the internalization of these benefits in the market. This is achieved with subsidies and green power programs. Our results show that implementation of subsidies and green power programs is not only appropriate but may be necessary for wind energy development.
And jobs were not included as part of the benefit calculation:
Other indirect benefits often cited include economic development and tax receipts. While the local economy will observe temporary increases in activity during the 6 to 12 months of construction, the long term economic development for the local area will be minimal. Wind plants are generally staffed with one person per 10 to 20 turbines which would translate to only 2 additional local jobs for our illustrative project. A rule of thumb is that temporary increased employment during construction of a utility-scale wind system is 1-2 jobs per MW and permanent operation and maintenance employment is approximately 3 jobs per 75 MW (Flowers, 2002).
*References:
- Todd L. Cherry, The Net Benefits of Utility-scale Wind Generated Electricity in Western North Carolina, <http://www.wind.appstate.edu/reports/final_bcr_report.pdf>
- Todd L. Cherry and John Whitehead, The Cheap-talk Protocol and the Estimation of the Benefits of Wind Power <http://www.wind.appstate.edu/reports/CVM_final_wind_report.pdf>
