Essays in Offshore Wind Energy Development

The US is second only to China in terms of installed land-based wind energy, but no commercial offshore wind energy facilities exist in the US to date. Numerous states are in the offshore wind planning process, among them North Carolina (NC). Among East Coast states, NC has the largest share of offshore wind resources (23%). This, together with low predicted production costs and a large electricity market, puts NC in a unique position to develop offshore wind energy.;Substantial resources have been invested in estimating wind resources, examining legal and geological frameworks and exploring possible shipping, military and environmental conflicts with wind energy development. Economic analysis to date has focused almost exclusively on levelized cost of energy generation. While visual impacts are the most cited reason for opposition to wind farms, no quantification of the possible viewshed externalities resulting from wind farm development have been conducted. Moreover, while job creation and carbon reduction are frequently mentioned as benefits resulting from offshore wind energy development, no information exists to date on how these aspects impact resident willingness to pay to have wind energy augment the grid.;This study uses the economic valuation method of choice experiments (CE) to estimate the willingness to pay (WTP) for different offshore wind energy scenarios in NC to better understand the economic trade-offs that accompany such development. This is achieved through two separate surveys. The first, the vacation rental (VR) survey, focuses on coastal tourism and examines the change in WTP for vacation property rentals located close to beaches where ocean views are impacted by wind facilities. The second survey, the General Population (GP) survey, is administered to a random sample across the state of NC to estimate the WTP to have offshore wind energy augment the grid, and examine how this WTP depends on the visual impacts, job creation and carbon reduction accompanying offshore wind farm construction. Both surveys consist of two treatments to examine differences in preferences given different sets of information. The VR survey examines the impact of providing respondents with both daytime and nighttime visualizations. All previous studies have only included daytime images, a potentially important omission since turbines are lit at night. The GP survey investigates how respondent WTP differs depending on whether respondents were told that offshore wind farm development would take place off a developed coastal town or off the Cape Hatteras National Seashore. Both applications allow for unobserved preference heterogeneity across respondents by employing latent class models.;Results of both surveys suggest that viewshed impacts of offshore wind farms are an unambiguous disamenity, both for the beach rental market in NC, as well as for the NC population in general. Moreover, welfare impacts are significantly higher if nighttime images are included in the survey or the wind farm location is specified to be off the Cape Hatteras National Seashore. For the rental market specifically, results from the VR survey suggest that the construction of wind farms within view would result in approximately 55% of respondents no longer renting in the area and another 24% would require substantial discounts in rentals prices to continue renting in the area if turbines are placed close to shore. However, the disamenity impact of visible wind farms is found to decreases with distance. Given costs of construction and operation increase with distance from shore, these results suggest that the optimal location of wind farms is likely within a visible distance from the shore. Moreover, results from the GP survey suggest that the visual disamenity can be offset to some extent by the job creation and carbon reduction that accompanies offshore wind energy production.