Economic Impact & Financing
The U.S. Jones Act Compliant Offshore Wind Turbine Installation Vessel Study examines the functional requirements and costs of constructing purpose-built vessels that would comply with the U.S. Jones Act and meet the needs of the U.S. offshore wind industry. The Jones Act requires any vessel transporting cargo between U.S. ports, or between U.S. ports and offshore facilities, be built and flagged in the U.S. The study presents designs for two Jones Act compliant vessel options: a wind turbine installation vessel and a feeder barge. Estimating packages were sent to multiple U.S. shipyards and indicative prices of $222 million for the wind turbine installation vessel and $87 million for feeder barge were received. Using the cost data, a business model was created that showed 10-years of work, or a pipeline of approximately 3,500 to 4,000 megawatts of offshore wind capacity (roughly equivalent to the expected low regional offshore wind deployment trajectory), would provide the owner of a wind turbine installation vessel with a reasonable rate of return.
The U.S. Job Creation in Offshore Wind report quantifies the job impacts of offshore wind development and specifies the types of jobs to be created. A high market scenario of 8,000 megawatts by 2030 would yield a peak of over 16,000 full-time equivalent (FTE) baseline jobs in the U.S. in 2028, with baseline jobs being ones for which there are no compelling reasons why the work would not be performed by U.S. workers. The jobs most likely to be performed in the U.S. include project development and management, supply and installation of electrical substations and subsea cable, and wind farm operation and maintenance. Additional jobs are also possible, with manufacturing jobs seen as the sector with the greatest potential. When the additional jobs that have a high or medium probability of being performed in the U.S. are included, the number of U.S. jobs would climb to over 36,000 FTE annually between 2026 and 2028. A low market scenario of 4,000 megawatts would create roughly half as many baseline jobs as the high scenario and a smaller proportion of high or medium probability jobs. The high scenario would also trigger more investment in new factories and vessels in the US.
The Northeast Offshore Wind Regional Market Characterization report identifies the opportunities and challenges that will shape the offshore wind market. It estimates the scale of potential offshore wind deployment to serve Northeast markets through 2030, given the nature of the offshore wind resource, federal lease opportunities, state policies, regional energy needs, existing electricity generation and planned retirements, and transmission capacity. The report finds that a low regional deployment trajectory could lead to 4,000 megawatts of offshore wind generation by 2030 off the Atlantic coast of the Northeast. A high regional deployment trajectory could lead to nearly 8,000 megawatts, which could power almost four million homes. The report also provides background information on topics ranging from interconnection infrastructure and permitting timelines to electricity markets and relevant public policies.
- Offshore wind sites with economic potential are located predominantly in the Northeast and eastern shore of Virginia
- Across all regions, the number of sites with a positive net value (or a value close to a positive net value) increase over the time period considered
- State policies have driven offshore wind development recently (e.g., in New York and Massachusetts); these policies may play a key role when assessing the economic viability of offshore wind but are not considered in this analysis
- Further technology improvements are needed to achieve the cost reductions of this assessment
- Some regions will likely require unique technology solutions (e.g., to address low wind speeds in the Gulf, icing in Great Lakes, and deep-water floating solutions in the Pacific and Hawaii)
- The value of offshore wind to the electric grid system under some high-penetration renewable energy scenarios may not be fully represented by net value as calculated in this study.
This study uses an experiment where ferry passengers are sold hotel room “views” to evaluate the impact of wind turbines views on tourists’ vacation experience. Participants purchase a chance for a weekend hotel stay. Information about the hotel rooms was limited to the quality of the hotel and its distance from a large wind turbine, as well as whether or not a particular room would have a view of the turbine. While there was generally a negative effect of turbine views, this did not hold across all participants, and did not seem to be effected by distance or hotel quality.
Placement of wind turbines has prompted public concerns related to their effects on wildlife and scenic views. This has been especially relevant in coastal areas, where the proposed development of large offshore wind energy facilities in states including Massachusetts, New Jersey, Delaware, Virginia, and Oregon have been seen as a potential threat to the tourism industry. The response from the tourism industry has delayed or even blocked development of offshore wind facilities in some of these states.
The Offshore Wind Incentives for New Development (Offshore WIND) Act would extend the 30 percent Investment Tax Credit for offshore wind through 2025. The 2015 omnibus bill extended the Production Tax Credit (PTC) and Investment Tax Credit (ITC) for wind until 2019. But because of the longer planning and permitting times currently needed for offshore wind, the Department of Energy has found that no additional offshore wind projects are projected to be able to qualify for these tax credits before they expire.
Unitil, National Grid and Eversource Energy are seeking to procure a total of 400 MW of offshore wind energy generation. This solicitation also allows bidders to offer proposals for up to approximately 800 MW, and the companies will consider procuring up to approximately 800 MW if the Evaluation Team determines that a larger-scaled proposal is both superior to other proposals submitted in response to this RFP and is likely to produce significantly more economic net benefits to ratepayers based on the evaluation criteria set forth in this RFP. To support development of the offshore wind energy market, the companies are seeking proposals that include expandable, nondiscriminatory, open-access offshore transmission facilities for the efficient delivery of their power to the Onshore Transmission System.
This revised RFP addresses the definition of "Offshore Delivery Facilities" as well as spelling, grammar, and spacing issues.