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Published on April 3rd, 2012 | by Zachary Shahan


Cape Wind Would Reduce Price of Electricity by $7.2 Billion, Study Finds

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April 3rd, 2012 by Zachary Shahan
wind power price of electricity cape wind

Cape Wind, the offshore wind energy project that has run a decade-plus marathon against rich NIMBY activists trying to attack it from any angle, would reduce the price of electricity in the New England region by $7.2 billion over 25 years, according to a new study published by economic consulting firm Charles River Associates.

In particular, it is wind’s $0 cost of fuel and the “merit order” effect, which we’ve written about many times, that would drive down the cost of electricity.

“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 entitled, “Update to the Analysis of the Impact of Cape Wind on Lowering New England Energy Prices.”

“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,” a news release noted.

“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 entitled, ‘New England Governors’ Renewable Energy Blueprint’, which stated ‘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.’”

For more on wind lowering the cost of electricity, see:


Source: Cape Wind

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About the Author

is the director of CleanTechnica, the most popular cleantech-focused website in the world, and Planetsave, a world-leading green and science news site. He has been covering green news of various sorts since 2008, and he has been especially focused on solar energy, electric vehicles, and wind energy since 2009. Aside from his work on CleanTechnica and Planetsave, he's the founder and director of Solar Love, EV Obsession, and Bikocity. To connect with Zach on some of your favorite social networks, go to and click on the relevant buttons.

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  • JohnInMA

    So does this study result mean the utilities have or will renegotiate their power purchase agreements from Cape Wind or establish new pricing guidelines via regulators? I get the rationale from the Charles River analysis, I just don’t understand how it is realized. The ratepayers’ price is heavily manipulated, and the PPAs signed so far have a relatively long term. Or is it the case that someone other than the ratepayers will benefit from the price forces driven by the “zero fuel” cost from Cape Wind?

  • lukealization

    I don’t care about $7.2 billion! I don’t like it because it ruins my view! -_-

    I wish these NIMBY’s would shut up. They’re BANANA’s (Build Absolutely Nothing Anywhere Near Anything).

    • Jessica Owens

      I can’t believe that you think your view is more important than making sustainable, economic decisions.

      • lukealization

        Umm… clearly sarcasm?! :

    • Zachary Shahan

      i know — i can’t imagine their thought process. :D

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