The United States has an opportunity to accelerate offshore wind energy growth by 28 GW, generating $1.7 billion in U.S. Treasury revenue by 2022, according to a study released from the research group Wood Mackenzie.
Findings from this study confirm additional lease areas are needed to meet demand, reduce energy costs, increase competition and ultimately generate thousands of jobs and billions in investment. Additionally, the findings offer guidance to decision-makers about new offshore wind leases, which can be a short-term solution to jump-start recovery from a coronavirus pandemic-driven economic slowdown.
“The Wood Mackenzie study provides a new impetus for the designation and leasing of new wind energy areas in federal waters off the U.S. coastline. States along the eastern and western seashores have a massive domestic clean energy resource and many states have set ambitious offshore wind goals to reap the economic and environmental benefits that offshore wind offers but cannot achieve those goals with existing leases,” said Joe Martens, director of New York Offshore Wind Alliance, a project of ACE NY
Commissioned by four energy industry groups, American Wind Energy Association (AWEA), National Ocean Industries Association (NOIA), New York Offshore Wind Alliance (NYOWA) and the Special Initiative on Offshore Wind (SIOW) at the University of Delaware, the study dives into the economic impact of offshore wind activities as a result of potential Bureau of Ocean Energy Management (BOEM) lease auctions in 2020, 2021 and 2022.
Based on existing activities and policy assumptions for future offshore wind development, 2 million acres of federal waters in the New York Bight, which includes parts of New Jersey, as well as California and the Carolinas, could be auctioned for commercial leases in 2020 and 2021. Other auctions for lease areas in the Gulf of Maine and areas in California could happen in 2022 and would generate an additional $500 million in U.S. Treasury revenue, according to the report.
“American offshore wind is a generational opportunity. Infrastructure spending, energy security and shovel-ready jobs with good wages will be unleashed,” said Erik Milito, NOIA president. “Importantly, offshore wind development will support jobs throughout the entire U.S. The same shipbuilders, heavy lift vessel operators, steel fabricators and countless other companies who built the Gulf of Mexico oil and gas sector stand ready to lend their expertise to the American offshore wind industry.”
The report estimates that total investment in the U.S. offshore wind industry will be $17 billion by 2025, $108 billion by 2030 and $166 billion by 2035; from 2022 to 2035, capital investment of $42 billion will go to turbine manufacturers and the supply chain, $107 billion will go to the construction industry, and $8 billion will go to the transportation industry and ports. Annual capital investment for O&M activities will increase to $2.4 billion in 2035.
“Wood Mackenzie’s new analysis reinforces and proves what offshore wind advocates already know: that offshore wind development can be a major part of the solution to our country’s most pressing energy needs and our country’s most immediate economic woes. Unleashing the potential of offshore wind power through immediate and consistent auctioning of new lease areas can help the United States rebound from the greatest economic downturn in our nation’s history,” said Nancy Sopko, executive director, SIOW.
The offshore wind industry coujld contribute additional economic benefits to the U.S. economy, including supporting tens of thousands of jobs. If the assumed BOEM auctions in 2021 and 2022 happen, total full time equivalent job creation from the resulting offshore wind activities, including development, construction and operation will be approximately 80,000 jobs annually from 2025 to 2035.
“Policymakers at the federal and state levels right now hold the key to unlocking the full potential of the offshore wind industry that will benefit all Americans,” said Laura Morton, AWEA senior director of Offshore Wind. “We’re on the cusp of a rare opportunity, but the U.S. remains far behind other countries in harnessing offshore wind technology. It’s time for us to unleash this abundant domestic energy source that will deliver tens of thousands of new jobs, revitalize coastal ports, and expand manufacturing opportunities, to reap major economic and environmental benefits.”
News item from AWEA