California Dreamin’ of Offshore Wind Energy and Job Creation

It’s not just states on the northeast coast of the US that stand to benefit from offshore wind – California could too.

Recent weeks have seen a lot of attention paid to the potential of offshore wind energy of the northeast coast of the US, but there is also potential aplenty on the country’s east coast.

A report from the Green Economy Programme at the Center for Labor Research and Education at the University of California, Berkeley suggests that floating offshore wind energy could play a leading role as a source of green energy and employment.

Robert Collier, a research and policy specialist in the Labor Center’s Green Economy Programme, suggests that, as California accelerates its transition to a low-carbon future, one of its challenges is to choose ‘high-road’ policies that not only cut emissions but spur broad-based growth, create quality jobs, and benefit communities, and notes that state and federal governments have recently launched a planning process for one emerging clean energy source with significant high-road potential: offshore wind.

Mr Collier’s report analyses the policy actions needed for offshore wind power to become an important component of California’s energy mix and an economic catalyst. He acknowledges that these steps would entail an unusual degree of long-term co-ordination and commitment by government and industry. Yet such an effort appears to merit serious consideration because of the sector’s potential to create high-wage employment and help balance the state’s power grid at electricity rates competitive with those of similar sources.

California state agencies already provide direct and indirect subsidies to other technologies such as battery storage and advanced biofuels. By placing strategic bets on competing clean energy alternatives, these subsidies stimulate what Mr Collier called a “multi-sided development race” that will strengthen the state’s climate policy options in the years to come.

“Offshore wind carries the same inherent risk as the other technologies in this race: the lack of certainty that they will cut their currently high costs enough to become fully competitive,” he writes, “but offshore wind also has a unique vulnerability that doubles as economic potential: its physical scale and logistical complexity.”

Deep water off the coast of California would probably preclude the use of fixed-bottom foundations and require the use of floating platforms of the type that are being developed in Europe and elsewhere.

As Mr Collier notes, any offshore windfarm requires an extensive supply chain. Ensuring this supply chain takes root in California rather than in Asia or Europe would require major upgrades to California’s infrastructure for ports, transportation, and transmission. The payoff would be creation of a new economic sector that – to a greater or lesser extent, depending on policy decisions – could provide significant job creation.

A necessary factor in developing this supply chain is investor confidence, and as Mr Collier noted, in-state production of the full range of windfarm components is possible if state and federal planners send clear signals to wind developers that, if they build this manufacturing capacity in California, their investments will find steady markets through a long-term series of offshore projects. Without such signals, it is likely that much of the supply chain would be outsourced, with fewer economic benefits for Californians.

“Californian offshore wind is a case study of the challenges and opportunities inherent in a 21st-century industrial policy for the clean energy transition,” he said. “An entirely new industry is being envisioned, potentially involving major infrastructure requirements and long-term power resource planning. Success will depend on policy decisions and market signals that are only just now beginning to be evaluated by government and non-government stakeholders.”

A central finding of his report is that California’s offshore wind planning efforts will soon need to broaden their scope. Since early 2016, the state and federal governments have commissioned research, conducted stakeholder outreach, and mapped out the labyrinth of state, federal, and local permitting. This is important groundwork, much of which involves potential environmental concerns that are outside the purview of this report. But because there are so few US precedents for high-road economic planning, additional attention will be needed to identify and design the appropriate policy tools.

The report’s findings include that offshore wind would bridge the daily late-afternoon gap between fast-vanishing solar output and rising residential electricity consumption, thus reducing the state’s need to import wind power from Wyoming or other out-of-state sources. In doing so, it could allow California to develop additional solar power without destabilising the grid. As an in-state energy source rather than an out-of-state import, offshore wind would be under the purview of the state’s own regulators as well as federal agencies, thus allowing California policymakers to ensure compliance with state policies and interests.

Until only a year or two ago, offshore wind seemed far too expensive to ever be able to compete with California’s other sources of renewable power, but recent technological innovations have sent offshore wind costs plummeting, suggesting that by the mid-2020s, floating windfarms will be close enough to price parity with land-based renewables.

An April 2016 analysis by the National Renewable Energy Laboratory of development scenarios for California offshore wind concluded that an economically feasible build-out of 16 GW would create steadily increasing employment totalling an annual average of 13,620 full-time jobs in construction, installation, and manufacturing by 2040-2050, and 4,330 full-time, long-term jobs in operations and maintenance, plus thousands more service-sector jobs in the broader economy.

California’s first offshore wind projects are likely to be executed with imported turbines and other parts, but if state policymakers send clear signals that a multi-year sequence of many contracts is in the offing, private manufacturers and investors are more likely to build factories and other facilities in California for turbines, blades, towers, and foundations. This, in turn, could lower costs and make the electricity produced more competitive with other power sources.

A full supply chain also presupposes the availability of suitable port facilities for manufacturing and assembly, and two alternatives appear potentially viable: either a multi-site approach, with different functions carried out at a variety of ports, or a single multi-use hub at Eureka, where the Port of Humboldt Bay has vast expanses of vacant industrial land at a deepwater harbour (although it also has major challenges for highway, rail transport and grid interconnection).

Mr Collier suggests that California’s initial offshore windfarms are likely to be either in waters near the Diablo Canyon nuclear plant, whose reactors are slated to close in 2024 and 2025, or offshore Humboldt and Del Norte counties, near a long-closed nuclear plant that is currently undergoing its decommissioning process. In either case, the result could be retraining and re-employment for some of the nuclear plant workers.

For offshore wind energy to achieve a leading role as a provider of clean energy and jobs, he suggests, co-ordinated industrial planning that has been rare in US states in recent decades would be required, but if California is to transition to renewable energy, policymakers and stakeholders should give serious consideration to it.

California Dreamin’ of Offshore Wind Energy and Job Creation, by David Foxwell, Offshore Wind, November 14, 2017.

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