Study – Offshore Wind Has Key Role In Future Energy Affordability

by Staff Report

NEW HAVEN, CT — Renewable energy, especially offshore wind, is cost-competitive and can help stabilize the cost and reliability of energy in New England, according to a new study.

The analysis, commissioned by The Nature Conservancy and conducted by Dunsky Energy + Climate Advisors examined whether renewable energy resources would still make economic sense if not required by state policy or mandates. According to the study, the answer is yes. 

“It’s good news that renewable energy — something we know is good for our health, our environment, our labor force, and our economy — is also good for our wallets,” said Nathan Frohling, director of external affairs for The Nature Conservancy in Connecticut. 

Frohling said state residents were rightly concerned about rising electricity costs.

“This analysis shows that renewable energy, and particularly offshore wind, is a vital part of a practical, cost-competitive strategy for delivering reliable electricity while reducing our dependence on unpredictable natural gas markets,” he said.

The study found that New England’s heavy reliance on natural gas, spending on transmission and distribution infrastructure, and broader inflationary pressures across the economy, have been leading factors behind recent increases in electricity bills. 

The analysis found that wholesale electricity prices closely track the price of natural gas, which has experienced significant volatility and price increases in recent years. Those costs have ultimately been passed on to ratepayers. By contrast, state clean energy programs have remained a relatively small and stable share of customer electricity bills, according to the study. 

To test the economics of various energy options, Dunsky compared three scenarios: an energy system dominated by fossil fuels (natural gas), a least-cost mix regardless of energy source, and an all-clean-energy mix. The analysis found that as New England’s electricity demand grows through 2050, the lowest-cost pathway for meeting rising demand will require a significant amount of renewable energy, especially offshore wind. The study showed that renewable energy resources will make up approximately 80% of new generation capacity in the lowest cost energy mix scenario. 

The report concludes that expanding renewable energy is not only consistent with affordability goals, but also that it is needed to stabilize future energy costs. Unlike natural gas, renewable energy resources are often developed through fixed-price contracts that provide greater certainty around long-term energy costs. Offshore wind also has no fuel costs, helping reduce exposure to swings in global fuel markets that can affect electricity prices. 

When all energy technologies are allowed to compete solely on the basis of cost, the modeling showed that significant offshore wind development is a key part of the least-cost electricity mix for New England. That means it remains part of this least-cost mix even when environmental and climate benefits are excluded from consideration, and even when it was not required to help satisfy state carbon reduction targets or renewable energy standards.  

According to regional grid operator ISO New England, the region is expected to become a winter-peaking electricity system by 2035, meaning electricity demand will be highest during the winter months. The study found that offshore wind is particularly well-suited to help meet this challenge. Along the Atlantic coast, offshore wind is strongest during the winter months, aligning with projected future demand patterns. At the same time, the region’s natural gas infrastructure faces its greatest constraints during the winter, when gas is needed both for heating and electricity generation. 

“No single energy resource should be relied on to meet all of New England’s needs on its own,” said Sam Ross, Director, Dunsky Energy + Climate Advisors. “The study demonstrates the value of a diversified energy portfolio that includes offshore wind, land-based wind, solar generation, battery storage, and other resources that can work together to maintain reliability while controlling costs.” 

Notably, the analysis focused strictly on system costs and did not account for broader public health, climate, or environmental benefits associated with reducing emissions.