Long Island’s Offshore Wind FarmDavid Tobias1.011 Project EvaluationOverview• Energy generation in the US• Offshore wind farms• Proposal for Long Island• Financial Analysis• Risks and Uncertainties• Non-financial costs and benefits• FutureUS Net Energy Production by Source in 2001Problems with Current Energy• Fossil fuels– Environment– Foreign dependence • Nuclear– Public support• Need other sources RenewablesNew York State• Goal: “25% of electricity generated by non-polluting resources by 2013”• “We want to get there as quickly as possible”• “The Long Island Power Authority wants to lead the state in renewable technologies”Long IslandOffshore Wind Farm• 100 MW capacity, 25-50 turbines• More consistent wind speeds• Does not use valuable landProject ScheduleFinancial Analysis• Cost of turbines $85 million• Installation cost $50 million• Annual O&M $4 million• Annual Revenue $22.5 million• Operational for 20 years• NPV of Project -$11 millionRisks and Uncertainties• Reliance on technological advances– Unproven technology• State and federal permitting process• Financial uncertainties• Construction difficulties• Natural disastersTropical Storm and Hurricane Tracks (1851 – 2000)Costs and Benefits• Freedom of energy supply– Replaces dependence on foreign oil• Environmentally sound– Prevents emissions of greenhouse gases and other pollutants• Reduces medical costs• Visual impact– Off the coast of popular beaches (state parks) • Danger to wildlife–Birds– Fisheries– Endangered species• Hurts local fishing• Energy source only feasible due to government assistanceFuture• Looks very bright– Lack of opposition so far– Government commitment• Wind power offers a valuable alternative to fossil fuels– Cuts down air pollution and greenhouse gases• Limited environmental and economic
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