GridLab: Assessing the Economic Impacts and Supply Chain Development of Offshore Wind in the US
Decarbonizing electricity generation is a key step on the path to a net zero carbon economy. Offshore wind is at an early stage of growth in the US, but capacity is expected to grow rapidly in the future. This growth represents a significant and largely untapped opportunity for the US to generate renewable energy and create jobs – especially if the US can capture the value of the sector and associated supply chain domestically. Our analysis finds that by 2050, development of US offshore wind could result in the creation of 37,000 additional jobs compared to a ‘business as usual’ baseline.
Cambridge Econometrics’ report assessed the economic impacts and opportunities of offshore wind deployment and associated supply chain development in the US. Our report contributed to a broader effort by GridLab and the UC Berkeley Center for Environmental Public Policy to evaluate the possibility and impacts of achieving 90% clean electricity by 2035 and 95% clean electricity by 2050.
Offshore wind is on the verge of rapid growth in the US, with numerous projects planned or under construction, supporting a cumulative capacity of 60 GW by 2035. Based on our research findings, business investments supporting the growth of offshore wind in the US are already underway, with at least 11 identified manufacturing and assembly facilities announced or under development. US ports have also begun investing in needed infrastructure upgrades to serve the needs of offshore wind development, including specialized accommodation for wind turbine installation vessels and feeder vessels (such as the New Jersey Wind Port). These initial advancements in developing the offshore wind supply chain will need to increase in order for the US to meet the ambitious domestic supply chain opportunities we evaluate in this project.
To assess the economic impacts of offshore wind development in the US, we used our macroeconomic model of the environment-energy-economy system, E3ME. We analyzed a scenario in which the US would develop 750 GW of US offshore wind capacity by 2050, consistent with the ‘High Ambition’ scenario in the 2035 Report 3.0. We compared this scenario to a business-as-usual baseline under two different assumptions of the domestic content share (i.e., how much of the offshore wind value chain can be captured domestically in the US): ): (1) a scenario with modest domestic content shares, with a relatively slow increase in US offshore wind supply chains over time; and (2) an ambitious scenario, where supportive economic policy allows the US to capture more of the supply chain domestically.
In designing these scenarios, we focused on key offshore wind components of the value chain: manufacturing, construction, and professional services sectors. Our macroeconomic analysis estimated impacts on the US economy as a whole, including how large-scale deployment of offshore wind affects the electricity prices for businesses and consumers, and the economic impacts that follow from these changes as well as direct investments.
We estimated subnational geographic distribution of economic impacts by allocating national-level employment results to regions of the US based on each state’s relative share of new and cumulative offshore wind capacity from 2023 to 2050, as well as other sector-specific considerations.
Key findings from Cambridge Econometrics’ research and analysis include:
By 2050, deploying 750 GW of offshore wind capacity could support employment for nearly 400,000 people in the US, spanning across the industry and related supply chains – 37,000 more jobs than in a ‘business as usual’ baseline.
The long-term economic impacts will depend on the extent to which the US is able to capture value in the offshore wind sector and contribute to domestic supply of manufacturing, construction, and related services. Upskilling the workforce is crucial for capitalizing on growth in this industry.
Short-term growth in offshore capacity will be most prominent in the northeast, but the South and Great Lakes regions have the greatest long-term potential. The Pacific and Gulf regions will grow as floating turbines become more readily available.
Employment growth will align with capacity growth, with inland regions also seeing a rise in offshore wind manufacturing jobs.