Construction of an offshore wind turbine off the coast of England in 2010. (Photo by DECC via Creative Commons)

Construction of an offshore wind turbine off the coast of England in 2010. (Photo by DECC via Creative Commons)

Report: Stable policy key to Great Lakes offshore wind jobs

Offshore wind energy development in the Great Lakes could create thousands of manufacturing and construction jobs in the region — if lawmakers get the policy right.

A new report by an Illinois economist concludes that the economic impact of offshore wind farms in the Great Lakes greatly depends on whether the industry can grow at a steady pace.

Offshore wind developers are more likely to open regional offices and manufacturing facilities if they view the Great Lakes as an opportunity for sustained, long-term growth, it says.

But if incentives and permitting turn out to be as choppy as Lake Superior during a wind storm, those companies would probably import parts and expertise from elsewhere instead.

“The key to making sure those jobs reside here is to have stable policy that creates a steady stream of build out. That’s the big takeaway,” said David Loomis, an economics professor at Illinois State University.

Loomis is also a member of the steering committee for the Great Lakes Wind Collaborative, a public-private group that promotes wind energy development in the region and paid for the economic study.

The report, “The Potential Economic Impact of Offshore Wind Energy in the Great Lakes,” uses a formula developed by the National Renewable Energy Laboratory to estimate offshore wind job creation.

The numbers vary widely depending on the projected capacity that’s plugged into the formula.

Under the low scenario, in which 1,000 megawatts are installed by 2030, the industry would support about 750 full-time jobs in the region by the end of the next decade, in addition to more than 12,000 during construction.

Under the high scenario, which assumes 5,000 megawatts installed by 2030, the industry would be responsible for almost 3,900 full-time jobs, as well as more than 121,000 temporary ones during construction.

As the amount of installed capacity increases, the number of jobs created in the region increases at a faster clip, the report says. That’s because companies start to see setting up local operations as worthwhile investments.

“If you make a commitment to put a lot of these in, you get even more in the way of economic [impact],” Loomis said.

In all but the low scenario, turbine manufacturing and supply chain jobs exceed on-site construction jobs. Loomis said that the region’s large manufacturing base stands to benefit from supplying parts and equipment to offshore wind developers.

The Great Lakes Wind Collaborative intends to use the job estimates to help convince policymakers to support offshore wind development in the Great Lakes region.

“With the right set of policies and incentives, here’s the kind of payoffs we could see for your investment in this area,” Loomis said.

The reception to offshore wind farm proposals in the Great Lakes has been mixed so far. A Norweigian company encountered controversy in 2009 when it proposed a project offshore from the Michigan tourist town of Ludington.

In Ohio, meanwhile, the Lake Erie Energy Development Corporation is doing preliminary studies for a six-turbine project offshore from downtown Cleveland that it says has strong support from the community.

Still, major questions need to be resolved before offshore wind farms become a reality in the Great Lakes, Loomis said. For example, more study is needed of wildlife impacts and more collaboration is needed to sort out complicated jurisdictional issues.

Loomis said the hope is that the economic impact study will convince policymakers to prioritize these issues so that the industry can begin to develop.

The economic impact question is one that’s being discussed in other regions with offshore wind potential, too. The U.S. Department of Energy will host a webinar at 2 p.m. CST today (Nov. 20) on jobs and economic impact for offshore wind.

2 thoughts on “Report: Stable policy key to Great Lakes offshore wind jobs

  1. The “steady stream” that the desired “stable policies” would create is a steady stream of direct subsidies, tax breaks, and ‘must take’ laws that require utilities to buy the wholesale wind power at above market prices. All that will be needed for offshore wind to flourish in the Great Lakes.

  2. I absolutely agree with Rolf.

    Please see my analysis of the LEEDCO Icebreaker project:
    http://jerrygraf.wordpress.com/2013/09/29/analysis-of-leedco-icebreaker-project-do-wind-watts-really-work/

    Payback of the initial investment of $127,000,000 will never happen. Over $57,000,000 will remain unpaid after 25 years.

    Despite their supposed presentation as power sources for average everyday power needs, wind turbine projects are often granted special Power Purchasing Agreements (PPAs) which allow prices for their electricity that are many times higher than average wholesale price. It is disconcerting that a large portion of the feasibility studies and the on-going discussion are often devoted to proposals to make the projects appear viable with public spending and it is evident that, to make these projects work, massive government subsidies and large increases in the cost paid for electricity will be required to offset the investment losses and attract investors.