From today’s “Letters to the Editor” in the Boston Globe:

RE “CAPE Wind project could boost prices: But costs are unlikely to increase as much as opponents feared’’ (Business, May 7): Over the past year, the wholesale price of electricity in Massachusetts averaged 5.1 cents per kilowatt hour. Now we learn that Cape Wind needs to be paid at least 17 cents per kilowatt hour “to be competitive,’’ which makes this electricity more than three times as expensive to produce as conventional power.
In the absence of a tax on carbon, a case can be made for some subsidy for wind power, on the grounds that it cuts emissions of carbon dioxide and other gases, and contributes to energy independence. But the appropriate subsidy is small; I estimate it to be about 1.2 cents per kilowatt hour, assuming a penalty of $30 per ton of carbon dioxide emitted.
So we are vastly overpaying for electricity from Cape Wind; there are far cheaper ways to achieve equivalent environmental effects.
What a shame that the voluminous environmental impact statement of the Cape Wind project did not include a proper cost-benefit analysis. What a pity that so many environmentalists favor devoting scarce resources to such a wasteful white elephant. What a travesty that Cape Wind still claims, on its website, that the project “will help to stabilize and even reduce the price of electricity.’’
Jonathan Haughton
Boston
The writer is a professor of economics at Suffolk University and senior economist with the Beacon Hill Institute for Public Policy.