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This Week in Clean Economy: Manufacturing Job Surge Seen for East Coast Offshore Wind

Wind farms along Maryland's coast could create thousands of jobs for the nearly 900 companies that are positioned to manufacuture and install turbines.

Apr 6, 2012
Giant wind turbine blade

Maryland's steel mills, ship builders and metal parts makers may help the U.S. challenge Europe and China in the global offshore wind manufacturing market—if and when the state gives the greenlight to offshore wind projects.

A new report by Environment Maryland, an advocacy group, found that deploying wind farms along Maryland's coast could create "thousands" of jobs for the nearly 900 companies that are well positioned to supply iron, steel, bolts and cables for turbines—and to secure the installations to the ocean floor and hook them to the grid.

The firms span nearly two dozen industries, including electric power transmission, freight trucking, shipping, financial services and plastics manufacturing, according to the report.

The study, "What Offshore Wind Means for Maryland," is an effort to get the state legislature to adopt policies that would spur creation of a local offshore wind industry.

The United States has neither a single turbine spinning off of its coasts, nor a single operating factory for offshore wind parts.

Chinese and European companies dominate the global offshore wind turbine market, mainly because those regions have built installations and have a growing demand for more.

China has about 100 megawatts of offshore wind capacity, 130 megawatts in the pilot phase and has targeted 5,000 more megawatts within three years. In Europe, 10 countries have installed 3,800 megawatts of offshore wind—enough to power roughly 3.5 million homes. The European Wind Energy Association (EWEA), a trade group, expects that number to jump to 40,000 megawatts by 2020.

EWEA says the offshore wind sector has been a boon for job creation. Some 35,000 people work in businesses that build, install and operate offshore turbines, according to figures provided to InsideClimate News by the group.

Advocates say that the first East Coast state to complete an offshore wind project would be first in line to supply the entire region with wind towers, turbine blades and other components. Importing parts from abroad presents costly and logistical problems. Each offshore turbine weighs around 600 tons, nearly six times heavier than an average utility-scale windmill on land. Bulky steel foundations that anchor the turbines to the seabed can weigh hundreds of tons each.

Maryland itself has no official proposals to build an offshore wind farm, but that could change soon.

Maryland Is a Bit Closer

Last Friday—on the day of the study's release—Maryland's House of Delegates passed a bill, 88 to 47, to spur offshore wind by creating a "carve-out" in the state's renewable portfolio standard, a law that requires utilities to get 20 percent of their electricity from renewables by 2022. The carve-out would force utilities to source 2.5 percent of their electricity from offshore wind. New Jersey is the only other state with an offshore wind carve-out.

Tommy Landers, director of Environment Maryland, told InsideClimate News that the requirement is a crucial "driver to get utilities" to commit to offshore wind. Developers can't attract financing without a long-term commitment from utilities to buy the electricity generated by their turbines. Such projects can cost $5 million per megawatt, or billions of dollars to build and operate.

The Senate Finance Committee is now considering the measure and is expected bring it to a vote next week. Landers said he's "cautiously optimistic" that the Senate will pass the bill.

Gov. Martin O'Malley is certain to sign it into law if it reaches his desk. The Maryland Offshore Wind Energy Act of 2012 is one of his signature initiatives.

"It would be absolutely nuts for us, as an Atlantic state, not to want to be one of the first to harness the most available, renewable resource we have out there," he said at a Monday rally in Annapolis. Maryland's waters are suitable for 7,800 turbines, with an annual output of 14,000 megawatts—or nearly double the state's current electrical load, according to a January study by the University of Delaware's College of Earth, Ocean and Environment.

Key to the bill's success in the House was a cap on the amount that utilities can charge to cover costs of offshore wind. Residential customers would pay no more than $1.50 more a month on electricity bills, while businesses could be charged up to an additional 1.5 percent of their monthly bills.

The idea is to stimulate demand for offshore wind power by providing the electricity at competitive prices—and in so doing spark a new manufacturing industry.

At least one company, AC Wind, is already positioning itself to capitalize on a potential manufacturing boom. The three-year-old firm was formed specifically to supply the still-nonexistent market for turbine parts. In March, the company announced plans to spend up to $10 million to convert a former boat plant in Salisbury to mold 130-foot long turbine blades. It hopes to have the plant up and running in two years and to employ 200 people.

The state's "capital region," which hugs the District of Columbia, is already filled with financial experts, consultants and engineers needed to plan and manage projects and wade through the permitting process. Those types of jobs comprise more than 10 percent of an offshore wind turbine's total costs, said Environment Maryland.

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