$700M wind power project scrapped in NYC area

In the end, it was the cost that blew away the wind farm. Long Island Power Authority Chairman Kevin Law confirmed Thursday that the utility is scrapping plans to create a $700 million wind energy park with 40 turbines in an 8-square-mile area in the Atlantic Ocean, not far from Jones Beach.

"It's just too expensive," Law told The Associated Press. "It's not going to work. ...This is an economically based decision. We didn't even have to consider environmental or aesthetic concerns."

Initially popular with environmental activists, politicians and residents, support for the project has faded since it was first proposed in 2003, both because of construction costs, as well as fears the pristine landscape of Long Island's south shore beaches would be permanently altered.

It is the second offshore wind project to be scrapped in recent months. A developer in South Texas called off construction of about 170 turbines there after determining it no longer made economic sense to proceed. That developer said building an offshore farm would have been more than double the cost of one on land.

Plans are proceeding for an offshore wind farm in Massachusetts, where a company called Cape Wind hopes to build 130 windmills in Nantucket Sound. Cape Wind has not said how much that project would cost. Developers in Delaware also are planning an offshore wind farm.

Original estimates for construction on the Long Island wind farm were between $150 and $200 million. In 2004, FPL Energy won the right to build the project with a bid of $356 million, pending regulatory approvals. The latest estimates put the cost at $697 million.

Although FPL would have paid for the cost of construction, they inevitably would have passed on those costs to Long Island electric ratepayers, Law said. He said an independent report commissioned by LIPA on the economics of the $700 million project released Thursday found the costs to be "significantly" higher than traditional forms of energy generation. That report found that the cost for the transmission cable bring the power to shore, as well as financing, could bring the final tab to over $800 million.

An analysis by Dowling College's Long Island Economic and Social Policy Institute found the cost would be more than six times that of standard power. The cost of the turbines alone were estimated at $350 million, Law said, in addition to higher costs associated with placing the windmills in the ocean, rather than on land.

A call to FPL for comment was not immediately returned, but the company told Newsday it had not received official word from LIPA that the project was being scrapped. The LIPA board of directors will meet next month to officially vote on scrapping the wind farm.

In a recent report, the Department of Energy said the nation's wind-power capacity increased by 27% in 2006, and that the U.S. had the fastest-growing wind-power capacity in the world in 2005 and 2006. Still, despite wind farms now operating in 36 states, wind accounts for less than 1% of the U.S. power supply.

LIPA, which is operated by KeySpan Corp., provides electric service to more than 1.1 million customers in Nassau and Suffolk counties, and the Rockaway Peninsula in Queens.