According to the report, which was commissioned by the wind farm developer Cape Wind, the 420 MW Cape Wind offshore wind farm, if built, would reduce wholesale electricity prices by US$7.2 billion over a 25 year span.
The study said that the reductions will occur because the grid operator, ISO New England prioritises electricity produced from low-cost generating fuel, so the offshore wind farm would displace high-cost fossil fuels and bring prices down.
"This report makes it clear that Cape Wind will save electric consumers billions of dollars through price suppression while also creating jobs and helping promote cleaner air and greater energy independence," said Mark Rodgers, communications director at Cape Wind.
The report updates and increases the price suppression estimate given in a previous analysis, published in 2011, which estimated savings of $4 billion over a 25 year period. The developers of Cape Wind said the increased price suppression in the update was primarily down to an increase in power plant retirements and a larger price difference between natural gas and fuel oil.
The report, Update to the Analysis of the Impact of Cape Wind on Lowering New England Energy Prices, was produced by Charles River Associates for Cape Wind.
Developed by Massachusetts-based Energy Management Inc (EMI), the 420 MW Cape Wind project is aiming to be the first offshore wind project to reach completion in the U.S. It is expected to comprise 130, 3.6MW turbines in the Horseshoe Shoal in Nantucket Sound. EMI claims that the project can meet three quarters of the electricity needs of Cape Cod and the surrounding islands.
The project has completed local and federal permitting, and expects construction to take two years once underway.