The proposal for a wind energy farm off the shores of Lakes Erie and Ontario is officially dead.
The New York Power Authority on Tuesday pulled the plug on the project, citing the high costs of the subsidies that would be needed to make the wind farm economically feasible.
"It's not fiscally prudent at this time to select a proposal and pursue a project in the Great Lakes," said Jill Anderson, a Power Authority staff member who delivered a report to the agency's board of directors.
The Power Authority's staff estimated that a 150-megawatt wind farm off the Great Lakes shoreline would require a subsidy of $60 million to $100 million a year. A larger project -- authority officials had said a project could generate as much as 500 megawatts of electricity -- would require much larger subsidies.
The Power Authority last year received five proposals from developers seeking to build the offshore wind farm, which would have placed as many as 150 to 170 wind turbines along a stretch of Lake Erie from Chautauqua County to Buffalo. A 500-megawatt project would have generated enough electricity to supply about 130,000 homes and would have reduced pollution by reducing the state's reliance on power plants that run on fossil fuels, like coal and natural gas.
The project's supporters also hoped the wind farm would spin off an entire side industry for the region, making it a center for manufacturing many of the 8,000-odd components that go into each wind turbine.
"This is a painful missed opportunity for Western New York," said Brian P. Smith, the communications and program director for Citizens Campaign for the Environment in Buffalo. "We had the opportunity to be at the forefront of an emerging industry."
However, Anderson said the high costs of building a wind farm several miles offshore in deep water made the project too expensive. She estimated that the subsidies required by an offshore wind farm in the Great Lakes would be two to four times the subsidy needed by a similar wind farm built on land.
"The value of that estimated economic activity has to be weighed against the cost borne by customers," said Anderson, the Power Authority's director of supply acquisition and renewable energy.
The Power Authority would have provided the subsidy for the offshore wind farm by agreeing to a 20-year deal to purchase the project's electricity at a negotiated rate that would have been many times higher than the current market price of power in Western New York.
"This was not an easy decision for us to make," said John Dyson, a Power Authority trustee.
Chris Wissemann, the managing director of Ohio-based Great Lakes Wind Energy LLC, said the Power Authority's "closed door" process did not advance to the point where bidders could develop their "best and final pricing" or discuss the potential advantages of the project.
"[The Power Authority] focused on the cost, but not the benefits," said Wissemann, whose company had proposed a project of less than 100 megawatts.
While the Great Lakes project was backed by many environmental groups, and a petition drive in support of the project garnered more than 12,000 signatures, it also faced stiff political opposition. County legislatures in seven of the nine counties lining the Lakes Erie and Ontario shoreline, including those in Erie, Chautauqua and Niagara counties, passed resolutions opposing the wind farm project.
In addition, the offshore wind project lost its highest-profile supporter earlier this month when authority President Richard Kessel left his job.
Despite the decision to drop the Great Lakes wind project, Dyson said the authority remains committed to developing renewable energy, noting that earlier this month it, the Long Island Power Authority and Consolidated Edison applied for permits to build a massive wind farm off Long Island with a capacity of 350 to 700 megawatts.
"It proves our commitment to wind, in general," Dyson said.
Anderson noted that the gap between the current market price for power and the potential cost of the electricity that would have been generated by the offshore wind farm likely would be smaller with a project off Long Island because today's power prices are higher there. In addition, the need for new sources of electricity is greater downstate than it is upstate.
"It's not, by any means, an indication that we're closing the door to offshore wind in New York," Anderson said.
Smith, however, criticized Gov. Andrew M. Cuomo for not backing the Great Lakes wind project. And he called the Long Island proposal a "baby step" toward the development of offshore wind in New York because a downstate project is years away from fruition, leaving states like Ohio, New Jersey and Massachusetts on the leading edge of the push for water-based wind farms.