Cost-Benefit Analysis

Greener Energy: The Case for Wind Power at SJU and CSB

Wind Energy Costs

Wind energy's cost components include the explicit, financial costs of the turbines, which include the purchase price of the turbine (including transport and installation), the operation and maintenance (O&M) costs, the cost of capital, as well as the implicit (or opportunity) costs on the environment and society.

The explicit costs for a 600 kW Micon wind turbine is estimated by NAE to total $690,051 and when all other costs are included over a 30 year contract price, the price per Kwh (on a levelized basis...i.e., equal payments per year) totals $0.04661 (NAE pro forma calculations).

Other, implicit costs include the social or environmental costs. Though DeAngelis and Rashkin (Gipe, pp.242-3) conclude that wind almost always has the lowest social and environmental costs when compared to other fuel sources, it does provide concerns for many people. The following are cost categories that need to be included in any consideration of wind energy:

  1. Aesthetics: Some people consider wind turbines an intrusion on the landscape (especially large wind farms), although surveys indicate that people living close to wind turbines (small clusters) don't find them objectionable. Just as smokestacks in the past represented progress, wind turbines can be seen as symbols of good stewardship and courageous steps toward sustainability.
  2. Flora and Fauna Impact: Some endangered species have been killed by turbines, especially raptors in mountain passes with wind farms, although the death toll is lower than deaths from other forms of electricity generation. According to Don Aitken, a senior scientist with Union of Concerned Scientists, the number of birds killed so far is extremely small in relation to the number killed by other human activities that we have come to accept. (Gipe, p.357) Studies have shown that most avian deaths occur mainly in large wind farms in mountain passes. The number of trees that would need to be cut down to put up wind generators at SJU or CSB would be almost none since proposed sites already have access roads and are near cleared spaces.
  3. Safety: Good training can reduce the risks from construction and maintenance to almost zero. Wind Energy's principal advantage over coal has always been the reduced risk to public health. (Gipe, p.369)
  4. Noise: Modern turbines operate quietly and considering that over 20,000 turbines have been installed worldwide, there have been very few complaints about noise. Turbines meet and exceed noise standards established even in densely populated countries like Denmark, where turbines operate close to residential zones. Additionally, wind turbine noise has not been observed to disturb wildlife. The swishing noise of a wind turbine at SJU or CSB could be compared to quiet music or conversation. At a distance of 250 feet and 18 mph winds, the turbine emits about 40 to 50 dB of sound.
  5. Land: In general, wind turbines displace a very small land area. A Micon 600 kW turbine would take up approximately 900 square feet (30X30) not counting the access road. This includes the tower's pad and a little knoll around it.

Wind Energy Benefits

There are many benefits that would result from utilizing wind energy on the college campuses.

  1. Environmental Benefits: From an environmental standpoint, wind energy produces less pollution than conventional energy sources. For example, in 1995, NSP's Sherburne County, MN plant produced the following emissions: CO (carbon monoxide), NO2, (nitrogen dioxide) PB (lead), PM10 (particulates that are less than 10 microns), PT (particulates that are greater than 10 microns), SO2 (sulfur dioxide), and VOC (volatile organic compounds). Additionally, Sherburne County's power plant produced 14,423,409,598 kW hours of electricity in 1995. The following information can be used to quantify the fraction of CSB/SJU's social costs of these emissions.

    CSB/SJU's Projected Environmental Externality Values:

    Emission

    Total Emissions (tons)a

    Cost per tonb

    Total Cost

    CO

    0.11

    $5.99-$13.60

    $0.65-$1.50

    NO2

    2.17

    $68.80-$1,640

    $149-$3,559

    PB

    negligible

    N.A.

    N.A.

    PM10

    0.28

    $166.60-$2,380

    $47-$666

    PT

    0.28

    N.A.

    N.A.

    SO2

    1.90

    $0-$300

    $0-$570

    VOC

    0.01

    $1,180-$1,200

    $11.80-$12.00

    a Minnesota Pollution Control Agency (based on Sherburne County's 1995 emissions values)

    b Minnesota Public Utility Commission (based on Sherburne county's 1995 emissions values)

    Please note that, according to NAE, the data from SJU indicate a wind turbine should be able to produce approximately 1,265,000 kW hours of electricity per year. This means that SJU or CSB (depending on the location of the wind turbine) could reduce the amount of electricity that it buys from NSP by 1,265,500 kW hours per year, which would reduce emissions of the above pollutants (assuming other electricity customers don't immediately buy up SJU's share). The social cost for the reduced emissions ranges from $208.45 to $4,808.50 (using the values in the table above).

    Additionally, greenhouse gases such as Carbon Dioxide, for which no externality cost have been calculated here, would be reduced by the amount of wind-generated electricity.

    In addition to the environmental externalities values (the social cost of pollution), there is an explicit cost for these emissions. In 1995, the state legislature of Minnesota assessed a $21 per ton emissions fee for the following 5 pollutants: PM10, SO2, NO,VOC, and PB. Therefore, NSP has to pay a fee to the state that varies with the amount of pollutants it emits. For example, Sherburne County's power plant paid approximately $1,045,444 in fees to the state. If SJU decides to utilize wind power, it would reduce the amount of energy it purchases from NSP, thereby reducing NSP's emissions and their associated fees ($91.69 for CSB/SJU's share).

  2. Financial Benefit: From a financial standpoint, since the colleges pay about 4.3 cents per kWh for electricity from NSP, they would not have to pay NSP approximately $54,395 per year (at current prices) for the electricity that they would now produce with wind energy rather than buy from NSP. The benefit is two-fold. First, after the project is paid off, the schools own the wind turbine, and second, the savings increase over time if NSP's price per kWh increases. If CSB and SJU choose not to own the turbine, but instead contract for the power at an agreed-upon price, then the benefit lies in paying for cheaper power as NSP's rates rise over time, a reasonable assumption given past experience. Finally, the turbine would increase CSB's and SJU's good reputations and could attract more students and their tuition dollars.
  3. Educational Benefits: Having a turbine on either campus provides students and others in the region an opportunity to learn about renewable energy sources. In addition to the Bresnahan Pottery studio, the SJU Arboretum, the Community Garden, the wind turbine would let students (and others) learn first hand what practical steps towards sustainability look like.
  4. Good Publicity: Utilizing a clean energy resource on both campuses would create positive publicity. According to Maggie Prusa, Assistant Director of Admissions, there are a number of students interested in CSB and SJU because of the schools' focus on environmental issues. Also, many communities have used their wind plants to stimulate "green" tourism. For example Cornwall, England set up a visitor's center and charged an admission fee at their wind power plant. After 18 months in operation, 55,000 tourists had visited the tourist center. Tourism has also been a factor at other plants in Europe, Canada and the U.S. (Gipe, p.436) Lake Benton, MN for example, has a picture of a wind farm on the front page of its visitor's guide and directory and proudly considers itself the "Windpower Capital of the Midwest."
  5. Greater Self-Reliance: Finally, another benefit of utilizing wind energy as a resource is that CSB and SJU will be less dependent on what happens to the markets for electricity and gas. If there is a price shock in these markets, the colleges will be better positioned using wind energy as a supplemental energy resource.