Charles River: Cape Wind Saves $7.2 billion

Report Title:  CRA Updated Cape Wind Report

Report Author: Charles River Associates (CRA)

Publish Date: 3/31/2012

Link to Report

Report Summary:

Charles River Associates (CRA) has conducted an updated analysis of the impact of the
Cape Wind project on lowering the ISO New England wholesale electricity market. Cape
Wind, a 468 MW offshore wind power project planned for Nantucket Sound, is expected to
provide enough power to supply approximately 4 percent of projected 2014 demand in
Massachusetts and approximately 2 percent of total projected 2014 New England demand.
This additional supply will reduce the need for generation from other power plants with higher
operating costs and pollutant emissions, primarily fueled by natural gas, oil, and coal. Using
updated input assumptions, CRA has projected wholesale power prices over the period 2014-
2038, for scenarios with and without Cape Wind in service, and quantified the expected
reduction in wholesale power prices and wholesale electricity costs that would result from the
power supplied by the project. In addition, CRA estimated the effect of the Cape Wind project
on employment in New England.
Key differences in input assumptions compared to CRA’s 2010 analysis include:
• Lower peak demand projections, while the energy demand forecast remained flat.
• Larger price spread between natural gas and fuel oil.
• Absence of a national carbon scheme.
• Additional generation retirements, driven by environmental regulations.

The principal findings of the updated analysis are:
• Adding Cape Wind would lead to a reduction in the wholesale cost of power
averaging $286 million annually over the years 2014–2038, resulting in an
aggregate savings of $7.2 billion over 25 years.
• With Cape Wind in service, over the years 2014–2038, the price of power in the
New England wholesale market would be $1.86/MWh lower on average.
• Over the combined 16-year period spanning construction and the first 15 years
of operations Cape Wind would create an average net addition of 514 jobs in
Massachusetts and 1,119 jobs in New England.


Tags: Policy , Wind

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