Cancelling five major offshore wind projects could significantly increase electricity costs for customers on the US East Coast, according to a new analysis by the American Clean Power Association. The projects play an important role in meeting rising electricity demand and strengthening regional power system stability.
The analysis estimates that cancelling the projects could increase electricity costs by $45 billion over the next decade. Together, the five projects would deliver nearly 6 GW of offshore wind capacity and supply electricity to more than 2.5 million homes.
On 22 December, the US Department of the Interior issued a stop-work order for five offshore wind projects serving the PJM, NYISO and ISO-New England power markets. The projects are already under construction, with most more than 70% complete, and have undergone extensive reviews by the National Oceanic and Atmospheric Administration, the Department of the Interior, the Department of Defense and other federal agencies.
ACP assessed the impact of removing these projects from the power system and translated the results into expected retail electricity rates across 15 states and Washington, DC.
The analysis indicates that, without these offshore wind resources, wholesale electricity prices would rise sharply during evening peaks and winter periods, including extreme weather events. Power systems would become more dependent on non-renewable generation, increasing exposure to price volatility. In addition, grids would lose access to low-cost, winter-peaking clean energy that helps stabilise prices during periods of high demand.
At peak times, electricity prices are determined by the most expensive power plant required to meet demand. Offshore wind reduces reliance on these high-cost plants by providing steady, lower-cost generation, contributing to greater price stability.
ACP has called on policymakers to consider the potential consumer cost impacts of delaying offshore wind development and to seek solutions that balance national security concerns with the need for affordable and reliable electricity
