Published on June 11th, 2018 | by Carolyn Fortuna0
Offshore Wind = Promising Economic Engine & Job Creator in Maine
June 11th, 2018 by Carolyn Fortuna
The American Jobs Project has issued a new 2018 report that focuses on Maine as microcosm of the US to outline how the states can follow global trends toward energy transformation. The Maine Jobs Project: A Guide to Creating Jobs in Offshore Wind provides tailored strategies for building a skilled workforce and creating thousands of good-paying jobs for Maine workers in the offshore wind industry. The report delineates how a combination of interest from cooperative industry associations in the state, a growing network of composites manufacturers, and offshore energy potential because of strong winds could accelerate and expand the state’s energy economy.
The study found that capitalizing on increasing technology demand for offshore wind, which is expected to grow 16% annually through 2030, can support 2,144 direct jobs in Maine from manufacturing and material development, indirect jobs from suppliers, and induced jobs from spending in the local economy. This industry offers a diverse array of good-paying jobs that cater to different education and experience levels — which comes none-too-soon for Maine, with its job losses in legacy manufacturing industries that have disproportionately impacted rural communities.
Stagnant population growth, decreased prime-age labor force participation, and a rapidly aging workforce have contributed to a skills gap across Maine’s critical industries, producing New England’s slowest-growing post-recession economy. Maine has an opportunity to mobilize the offshore wind market in the Northeast, supplying expertise and products to facilitate the expected build-out of 7.5 GW of installed offshore wind capacity.
Offshore Wind Potential in Maine
The American Jobs Project tries to spur job creation in the advanced energy sector by identifying state-level economic opportunities and crafting the right solutions for in-state growth. The group believes that manufacturing is a cornerstone of the US economy—providing workers with good wages and causing a multiplier effect on local revenue and employment. It resolves to support industry jobs that are resistant to offshoring and automation.
Economic clusters are regionally situated groups of interconnected companies and institutions organized around a particular industry, such as the offshore wind industry. Offshore wind turbines harness the power of strong ocean winds by generating energy from faster, more consistent wind speeds and can be leveraged to meet the vast energy needs of coastal states, particularly across the North Atlantic. Offshore wind farms that are supported by floating foundations are uniquely suited for deeper waters, allowing turbines to be located further out at sea.
As such, floating wind power will be critical to the offshore wind industry’s long-term growth potential. Maine is home to concrete production, manufacturing facilities, and other assets that can be used to locally construct wind turbine components, such as floating foundations. This infrastructure offers Maine the potential to rise to the level of a global hub of innovation and create new jobs in advanced industries. By having a close network of suppliers and partners, companies in Maine can reap the benefits of increased productivity and operational efficiency. Efficiency will come through amplifying local job creation and economic growth by leveraging existing resources for manufacturing and production.
In the Northeast, four states are planning to invest $56 billion in offshore wind projects over the next decade. These states have indicated reliable levels of regional demand to warrant value chain development: Massachusetts alone plans to procure 1.6 GW of offshore capacity, and New York is exploring up to 1 GW of offshore production in partnership with Statoil, with a goal of reaching 2.4 GW by 2030.
Maine has the offshore wind resources to generate about 156 GW of electricity. With mass production, electricity rates for offshore wind will decrease to approximately 7.7 cents per kWh.
The report’s authors recommend that Maine policymakers and stakeholders should use the guide for collaboration and prioritization of policy actions, given the opportunities and challenges that lie ahead in growing the offshore wind industry. Policymakers can support these jobs by seizing the opportunity presented, increasing global demand, and overcoming barriers to industry growth. Build-out of the offshore wind industry will require clear policy signals, collaborative efforts, continued assessments, policy planning, and steady-handed leadership in order to surmount the unique challenges of this industry.
The report is broken into several categories of recommendations.
- Exploring future procurement options beyond a standard power purchase agreement (PPA) could ensure that future projects have multiple options for economic viability.
- Moreover, policymakers could consider procurement requirements that include local labor, as seen in Illinois.
- To encourage independent analyses, support effective long-term energy planning, and facilitate offshore wind development, the report indicates that Maine policymakers should consider re-establishing the State Planning Office.
- Given the challenges associated with the development of offshore wind projects, a dedicated staff will need to assess barriers, costs and benefits, and strategies for the proper mobilization of resources to support the industry.
- Maine could also create an Offshore Wind Production Tax Credit to send a clear policy signal to foreign and domestic investors that Maine is committed to developing offshore wind and attracting good-paying, middle-class jobs to the state.
- To help support a robust offshore wind cluster in Maine, state officials could leverage foreign direct investment (FDI) programs to provide targeted assistance to international businesses that can act as in-state anchor companies and fill critical gaps in the value chain.
- Maine could support the build-out of the offshore wind industry by establishing an anchor company tax credit to recruit key component manufacturers needed to meet in-state demand and develop a locally-sourced value chain to ease logistics and operations.
- Maine could leverage strategic marketing and outreach efforts such as developing modest improvements in the state’s brand, website, and media strategy to attract and expand new businesses in the state.
- The state could target investments in strategic offshore wind cluster development around deepwater ports, including upgrading ports and creating nearby innovation districts.
- Tax increment financing (TIF) is a municipal development financing tool that can yield economic benefits such as the creation of innovation districts or port upgrades. However, Maine could benefit from updates to TIF legislation that ensure proper oversight and stakeholder engagement, while also considering additional factors relevant to offshore wind.
- Maine could establish a Northeast Offshore Wind Innovation Center to coordinate regional offshore wind R&D efforts, foster engagement with important industry players, leverage investments from federal and state governments, and set and achieve goals related to floating foundation technology.
Access to Capital
- Maine can help emerging businesses overcome barriers to entry in the offshore wind market by providing targeted support to early-stage manufacturers of wind turbine components such as foundations, towers, and blades, as well as assistance to businesses engaged in design and engineering, siting and permitting, transportation, and storage.
- To foster an active startup culture and thriving entrepreneurial environment, the Maine Legislature could raise or eliminate the annual cap on the Maine Seed Capital Tax Credit to motivate investors to finance potentially higher-risk, higher-yield ventures and provide more capital than would have otherwise been invested.
- Maine could appoint a Foundation Liaison to develop relationships with and broker support from large national foundations engaging in program-related investments. Maine could leverage foundations’ funding mission and resources to facilitate support for in-state advanced energy companies.
- By offering financial and technical support to its workforce development organizations, Maine could ensure a strong pipeline of workers at each stage of industry growth, including site survey and development, manufacturing, construction and installation, and operations and maintenance.
- Maine could facilitate the growth of its offshore wind industry and help create a qualified workforce by expanding access to wind certificate and degree programs at community colleges. The colleges could provide students with hands-on training in wind turbine maintenance and electrical power production while also emphasizing fundamental electrical and mechanical concepts.
- Maine could improve its education and employment figures by expanding apprenticeships and career and technical education (CTE) programs, helping residents gain the workforce training needed to participate in emerging industries such as offshore wind.
To realize these opportunities, state and local leaders need to pursue strategies that create a strong foundation for industry growth in Maine and help local businesses grow, innovate, and outcompete regional, national, and global competitors. The authors argue that, in today’s competitive, globalized economy, businesses are more likely to thrive in cities and states that offer clear policy signals, a rich innovation ecosystem, fertile ground for capital investment, and a highly skilled workforce.
By mobilizing cutting-edge research and development, the report’s authors remind us that Maine can engage its academic and research networks to capitalize on local innovations in floating foundation technology, thus becoming a model for other US states for offshore wind development.
The report was prepared in partnership with the Maine Center for Business and Economic Research at the University of Southern Maine, the Environmental & Energy Technology Council of Maine (E2Tech), and BVG Associates, a data company based in London. The researchers conducted more than twenty interviews with stakeholders and experts in Maine. The results point to offshore wind as a promising economic engine and job creator.