|  Apr 10, 2012

Renewable Energy Saved Illinois Consumers over $100 Million

New report from the Illinois Power Agency shows wind and other renewables reduced wholesale power prices, boosted economic growth

CHICAGO, IL (April 10, 2012) – Illinois residents and businesses saved over $100 million in power costs thanks to wind and other renewable energy sources, a result that highlights the broad importance of wind energy to the state’s economy.

In a study prepared for the Illinois General Assembly late last month, the Illinois Power Agency (IPA) found that adding wind power to the electric grid reduced wholesale power prices by $176.8 million while simultaneously creating jobs and other economic opportunities for residents and businesses. The conclusion affirms that renewables are a positive addition to the state’s energy portfolio.

“When the sun is shining or the wind is blowing,” the report states, “the combined output of renewable generators benefits all customers by bringing down the market price of electric energy for all resources operating at that time. This is because wind and solar generation can effectively bid in at a zero fuel cost.”

According to the study, renewable resources lowered Illinois’ average locational marginal price (LMP) for electricity by $1.30 per megawatt-hour (1.3 cents per kilowatt-hour), for a total savings of more than $176 million.

“This landmark study affirms what the wind industry has known for years,” said Wind on the Wires Policy Manager Kevin Borgia. “Wind energy has no fuel cost, which allows wind generators to bid lower spot market electricity prices than any traditional energy source. This translates to lower power prices for Illinois ratepayers and businesses.”

The IPA analysis confirms similar studies from Massachusetts and New York, which also found wholesale price-reductions from incorporating renewables onto the power grids in those states.

Illinois businesses are also enjoying strong growth from the manufacturing of wind turbine components and construction of wind farms in Illinois, the study notes, highlighting a 2011 Illinois State University (ISU) report on the economic impact of wind energy in the state.

The ISU report found that the first 2,422 MW of wind installed in Illinois has created over 13,000 temporary jobs and nearly 600 permanent jobs in the state, while also providing new business to construction, engineering and manufacturing-related firms. These new opportunities were in addition to the millions of dollars paid to Illinois landowners leasing space to wind farms, and millions in new property taxes that wind developers pay to local governments in Illinois.

Despite the positive findings, the IPA report also highlights the need for additional action to ensure Illinois ratepayers fully benefit from wind energy. The IPA analysis notes that renewables can be a hedge against electricity price volatility, but those benefits are not captured by a reliance on one-year contracts for renewable energy certificates (RECs), which has been the IPA’s primary mechanism for procuring renewables since 2007.

A REC is a derivative product of renewable energy, it is not physical energy.  A reliance on one-year RECs subjects Illinois ratepayers to volatility in both REC prices and fossil fuel prices because of the laws of supply and demand. 

The price of energy from wind is near an all-time low.  Consumers would benefit from locking in long-term power-purchase agreements (PPAs) for wind energy now.    Such long-term PPAs are standard in the renewable energy industry.  Longer term contracts will lock in these low prices for a 10 to 20 year period.  They also provide a stable revenue stream necessary for new generation to be built, bringing additional jobs and economic development to the state.

The full study can be found at the IPA website:


Wind on the Wires is a 501(c)(3) nonprofit organization based in St. Paul, Minn., which is comprised of wind developers, environmental organizations, tribal representatives, public interest groups, clean energy advocates, farm groups and businesses providing goods and services to the wind industry. Our mission is to overcome the barriers to bringing wind energy to market by addressing technical and regulatory issues, as well as through education and public outreach.

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