Study: Cape Wind will reduce regional electricity prices by $7.2 billion
The increase in price suppression in the report update was attributed primarily to an increase in power plant retirements and a larger price difference between natural gas and fuel oil
Boston, April 2, 2012 — Cape Wind will reduce wholesale electric prices for the New England region by $7.2 billion over 25 years, according to a new report published by Charles River Associates.
The report shows that ISO New England, the electric grid operator, first dispatches electric generating units with the lowest cost fuel. Since Cape Wind's fuel — wind — is zero cost, the report states that Cape Wind will displace higher priced and polluting fossil fueled units resulting in average savings of $286 million per year in New England.
The Charles River Associates report is titled, "Update to the Analysis of the Impact of Cape Wind on Lowering New England Energy Prices," and was commissioned by Cape Wind. The original report was published in February 2010.
The increase in price suppression in the report update was attributed primarily to an increase in power plant retirements and a larger price difference between natural gas and fuel oil.
Price suppression in wholesale electric markets occurring as a result of wind power projects has been documented in Europe and in several U.S. power markets. Price suppression from wind power was noted in the 2009 report titled, "New England Governors' Renewable Energy Blueprint," which said, "All of the wind resource potential could provide downward pressure on the marginal prices for energy within the New England electricity market…this price pressure would ultimately benefit New England consumers."