Residents of Massachusetts and other states along the Eastern seaboard are experiencing the arrival of a new base industry for the state—offshore wind. Offshore wind is a distinct industry from onshore wind, owing to the vastly larger size of the wind turbines and the logistical complexities of working out on the ocean. The largest turbine on the market—the 12 MW turbine designed by General Electric—stands at 853 ft. The Prudential Building by comparison (not including the antenna), towers over much of Boston at 749 ft. With the arrival of this industry will come well-paying, white and blue-collar jobs in regions of the state that have relatively high unemployment. The industry also has the potential to expand the Commonwealth’s advanced manufacturing sector and create new markets for the state’s maritime and marine technology sectors.
The offshore wind industry got its start in Europe in places like Denmark and Germany. It then crossed the North Sea to the United Kingdom. As will be the case for Massachusetts, the UK offshore wind industry found its home ports in some of the more beleaguered cities of the country—places like Hull and Grimsby. These cities are similar to the Gateway Cities along the SouthCoast of Massachusetts—having lost their traditional industries but possessing untapped potential in their industrial ports. Now they are home to various facilities to serve the OSW industry: from operations & maintenance facilities to training facilities, from research facilities to factories. These facilities serve the OSW industry across Europe and create ripple effects in other areas of the economy.
Despite the relatively short distance between England and their blade facility in Denmark, Hull eventually became home to a Siemens blade manufacturing facility that now employs over a thousand workers. Originally, Hull was slated to become home to a nacelle factory, but the blade factory was a better match for the local workforce. Key leaders in Massachusetts have learned from this experience and are working to ensure that the Massachusetts workforce is prepared to seize emerging job opportunities. The workforce study commissioned by the Mass Clean Energy Center and being prepared by the PPC, Bristol Community College, , and Mass Maritime is a key step in that direction, by giving workforce development professionals the information they need to prepare the local workforce for the near term construction and operations & maintenance jobs.
Factors that will determine the speed and size of OSW industry growth in Massachusetts include the cost of the electricity produced by OSW as well as more generally, the size of the pipeline for new projects, the availability of shore-side infrastructure, and the extent to which the state obtains first mover status, which can lead to agglomeration effects as the supply chain co-locates. The cost of OSW is dropping rapidly, with the first subsidy-free OSW farm poised to be built in the Netherlands. According to a study conducted by the University of Delaware, OSW costs in Massachusetts will get down to 10.8 cents per kilowatt by 2027 (the deadline to procure 1,600 MW in OSW power). This is still much higher than for natural gas (5 cents per kilowatt), but costs will continue to fall as the local supply chain develops and technology improves.
The movement of the supply chain to Atlantic Coast is likely to happen much more quickly here than in the U.K. owing to the cost of transporting the massive components across the Atlantic (needless to say a longer trip than across the North Sea) and the emerging size of the U.S. market. While manufacturers we interviewed are keeping their location considerations close to the vest, they consistently noted that the U.S. is a major emerging market that is too big to ignore. When Siemens made their decision to open a blade facility in England there was estimated to be a 5 MW pipeline of projects, though this estimate turned out to be optimistic. Our analysis conservatively estimates a pipeline in the Northeast U.S. of about 4.6 MW of nameplate capacity, depending on capacity factors, although this is a small fraction of the total available resource in the existing wind energy areas.
It is clear that the ability to take advantage of the potential of the OSW industry in Massachusetts relies heavily on the ability of our workforce, infrastructure, and business leaders to anticipate industry needs and emerging opportunities. Done right, the potential for the state is substantial. According to a study by the PPC prepared for Vineyard Wind, average wages for occupations in the industry are over $80,000 , which compares favorably to the state average wage of about $67,000. Jobs range from white-collar legal and finance positions; to scientific and technical positions; to well-paying, blue-collar construction jobs; to long-term, stable jobs in operations and maintenance. Significantly, according to the PPC’s analysis of the Vineyard Wind project, about 90 percent of the Massachusetts jobs will be located in the Southeastern part of the state—an area that has fewer job opportunities than in Greater Boston and that includes sub-regions such as Martha’s Vineyard and Cape Cod, which struggle with the seasonal nature of their tourist-driven economies.
Furthermore, there is the potential to remediate and renew shoreside industrial sites such as the recently closed Brayton Point power plant in Somerset and Eversource/Sprague Oil site in New Bedford. Both must be used for water-dependent industrial uses given their location in Designated Port Areas, but would be very expensive to clean up for reuse. The companies in the offshore wind industry, which must locate by the water due to the size of the components, have the incentive to turn these properties around.
OSWEP is tracking these trends in an effort to inform an evidence-based industrial strategy. One year ago, the thought of local manufacturing related to offshore wind was a pie-in-the-sky idea to many. Today, it has been exciting to see how developers are already making commitments to procure some of the components locally, including crew transfer vessels for local boat builders Gladding-Hearn and Blount Boats and batteries from NEC Energy Solutions in Westborough. There has even been discussion of manufacturing some of the major turbine components on the SouthCoast, including towers, monopile foundations, and transition pieces. Ultimately, there will be OSW-related activity all along the Eastern seaboard and windfarm development will require a network of ports. However, the competition between states is fierce and there is a need for bold and quick action if Massachusetts wants to win the race.