If the US accelerates development in offshore wind and opens up new lease areas for development, it stands to benefit from 28 additional GW of clean energy, US$1.7Bn in US Treasury revenue by 2022 and massive investment around the country
The findings of a new study by Wood Mackenzie confirm that additional lease areas are needed to meet demand, reduce energy costs, increase competition, and generate thousands of jobs and billions in investment. If new lease areas are auctioned, investment will follow, the report says.
In addition, 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.
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 activity 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, 2M 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 as early as this year as well as in 2021.
That level of leasing could support 28 GW of offshore wind development and generate US$1.2Bn in US Treasury revenue. Other auctions for lease areas in the Gulf of Maine and areas in California could happen in 2022 and would generate an additional US$500M in revenue.
Significant capital investment will be put into the US economy to support offshore wind. Total investment in the US offshore wind industry will be US$17Bn by 2025, US$108Bn by 2030 and US$166Bn by 2035.
From 2022 to 2035, capital investment of US$42Bn will go to turbine manufacturers and the supply chain, US$107Bn to the construction industry and US$8Bn to the transportation industry and ports. Annual capital investment for O&M activity will increase to US$2.4Bn in 2035.
In addition to delivering clean energy to millions of households, the offshore wind industry will also contribute a variety of economic benefits to the US economy, including supporting tens of thousands of jobs and billions of dollars in capital investment. If the assumed BOEM auctions in 2021 and 2022 happen, total full time equivalent (FTE) job creation from the resulting offshore wind activities, including development, construction and operation will be approximately 80,000 jobs annually from 2025 to 2035.
AWEA senior director offshore wind Laura Morton said, “Policymakers at the federal and state level hold the key to unlocking the full potential of the offshore wind industry that will benefit all Americans.
“We are on the cusp of a rare opportunity, but the US remains far behind other countries in harnessing offshore wind technology. It is time for us to unleash this abundant domestic energy source that will deliver tens of thousands of new jobs, revitalise coastal ports, and expand manufacturing opportunities, to reap major economic and environmental benefits.”
NOIA president Erik Milito said, “American offshore wind is a generational opportunity. Infrastructure spending, energy security, and shovel-ready jobs with good wages will be unleashed. Offshore wind development will support jobs throughout the entire US, 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.”
NYOWA director Joe Martens said, “This study documents the enormous near- and mid-term economic benefits that offshore wind energy can provide: more than US$1Bn in revenue to the federal treasury, tens of thousands of jobs and billions in investments in ports, vessels and other infrastructure, at a time when the nation needs it the most. It is time for the federal government to act with the same urgency as the states.”
Special Initiative on Offshore Wind executive director Nancy Sopko said, “This 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 US rebound from the greatest economic downturn in our nation’s history.
“SIOW urges decision-makers in the Department of the Interior and the Bureau of Ocean Energy Management to heed the findings of this new analysis and act quickly to unlock the multi-faceted potential of US offshore wind development.”
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