Regional electric grid operator ISO New England Inc. has released a report examining the economic impacts of adding significant offshore wind energy into the mainland grid. Overall, the results project reductions in production costs, energy expense, CO2 emissions, average wholesale electricity prices, and congestion on key regional transmission interfaces, as offshore wind is added to the grid portfolio. The study also suggests the scale of revenues available to the offshore wind industry from this scale of development.
The report in question is ISO-NE's 2015 Economic Study: Evaluation of Offshore Wind Deployment. That report, released on September 2, 2016, presents the results of a study requested last year by the Massachusetts Clean Energy Center (CEC), focusing on the economic impact of up to 2,000 megawatts (MW) of offshore wind deployment into the Southeastern Massachusetts/Rhode Island (SEMA/RI) area.
According to ISO-NE, the results of this study suggest that "offshore wind deployment could bring sizable economic and environmental benefits to New England." The study found that while results were sensitive to assumptions like transmission constraints, fuel prices, and carbon allowance costs, overall offshore wind deployment would yield economic benefits. Annual production cost savings would range from $104 million to $807 million depending on the scenario and scale of development, while annual load-serving entity cost savings would range from $56 million to $491 million.
The study also found that adding offshore wind would reduce annual systemwide carbon dioxide emissions (by between 1,518 kilotons and 4,230 kilotons), because energy produced by offshore wind would mainly offset emission-producing thermal units.
The study also modeled revenues
flowing to offshore wind facilities under the various
scenarios, ranging a low of $83 million per year for 1,000 MW under the least favorable conditions, to $732 million with 2,000 MW of offshore wind and most favorable conditions.
While the U.S. is not yet home to any commercially operating utility-scale offshore wind project, interest in marine renewable energy resources is booming. Deepwater Wind's project off Rhode Island's Block Island is expected to come online this year. Massachusetts has recently enacted legislation calling for utility procurement of 1,600 megawatts of offshore wind; the developer of a project proposed off Massachusetts was recently acquired by a Danish investment fund; and federal efforts remain ongoing to lease sites on the Outer Continental Shelf for commercial offshore wind development.