The Atlantic Ocean is a magnificent resource of untapped power to generate offshore wind energy.
The next frontier in domestic energy production, offshore wind is a unique opportunity to create an entirely new industry and thousands of jobs by tapping into this clean, stable-priced resource and harnessing it for energy. A resource which, by the way, has enough potential along the U.S. East Coast to meet the electricity demands of at least one-third of the United States – or, enough to power the entire East Coast. This emerging industry will create thousands of jobs and improve consumer access to clean energy sources.
The Atlantic Wind Connection backbone transmission project is an essential foundation to this new industry. Designed to accelerate offshore wind development, the project is led by well-established independent transmission company Trans-Elect and sponsored by Bregal Energy, Google, Marubeni Corporation, and Elia.
The Mid-Atlantic region alone offers more than 60,000 megawatts of offshore wind potential
in the relatively shallow waters of the outer continental shelf, ten to twelve miles off the coast. That’s enough to power more than 50 million homes.
Today, voters in the Mid-Atlantic support offshore wind more than ever. In fact, public opinion polling of area voters found that 79 percent of Mid-Atlantic respondents support the development of wind power and a strong majority are willing to pay extra to get this clean energy.
Jobs and Growth
Offshore wind presents the unique opportunity to create an entirely brand new industry in the United States. With over 8,000 components in a modern wind turbine, many offshore wind turbine components can be manufactured here in the United States. Today, about 2/3 of the components in U.S. land-based wind turbines are manufactured domestically.
There are significant opportunities for U.S. manufacturers to play a similarly substantial role in the offshore wind supply chain. Local sourcing is preferred for towers, castings, forging services, nacelle covers and blades to reduce transportation costs, decrease currency risk, and increase just-in-time turbine availability, product quality and service. As turbines become larger, few suppliers are equipped to produce the unique components and the size makes the components expensive and difficult to transport. The offshore wind industry’s development will open up new markets for local suppliers.
According to a 2011 study of the economic benefits of offshore wind, commissioned by Atlantic Wind Connection, the employment and GDP impact can be immense. The study was conducted by IHS Global Insight, a leading global analytics firm. IHS analyzed the economic benefits of building 7,700MW of offshore wind farms and the AWC offshore transmission line along the Mid-Atlantic. They found that a Mid-Atlantic build-out can create approximately 310,000 job-years of work (about 31,000 workers) in the US. There will be direct employment growth primarily in the construction of and operations/maintenance of the wind farms and transmission system, but that there will also be significant opportunities to develop the local manufacturing supply chain. Thus, a Mid-Atlantic build-out can create:
- 80,000+ job years from direct construction and manufacturing,
- 98,000+ job years from indirect employment at suppliers of equipment and services, and,
- 130,000+ job years induced as wages flow through the economy.
All the additional economic activity would increase the GDP by $33 billion and increase Federal, state and local taxes by $7.5 billion.
Lowering Energy Prices
Decades ago, land-based wind was considered high cost. America, however, committed to lead in land-based wind and over time we learned to build turbines better, larger, and at a lower cost. Today, not only are thousands employed in land-based wind, but the cost of land-based wind energy production has decreased close to the level of fossil-fueled energy. Land-based wind is now a viable, stable-priced, clean energy resource that contributes to our energy security.
A similar success is possible with offshore wind. Today it is comparable in cost to solar energy. However, as offshore wind technology evolves, with larger, more efficient machines, and as the supply chain is localized, it is possible to lower the cost of offshore wind energy to the range of $0.07 /kWh by 2030, according to the DOE’s National Offshore Wind Strategy.
Less well understood, is that offshore wind - even at a higher cost initially - can lower energy prices. It is counterintuitive, but here’s how: Electricity is sold in an auction market. Each energy resource is bid into that auction, at the cost of producing an extra unit of that energy ($/MWhr). That cost is primarily determined by fuel costs. Nuclear power, for example, has very low fuel costs and as a result it bids into the auction at a low price. On the other hand, coal has a comparatively high fuel cost and thus bids in higher than nuclear, or increasingly higher than even natural gas today. Once offshore wind farms are built and operating, their offshore wind energy will bid into the market at zero cost. This is because (again, once in operation) there will be no cost associated with producing an extra megawatt of offshore wind electricity because the fuel – the wind – is free.
Let’s use New Jersey as an example. While southern New Jersey has abundant nuclear resources and a lower overall energy demand, northern New Jersey is densely populated with the highest energy prices in the state. That’s because of what’s happening behind the scenes in the energy markets. Market price is set by the units that are needed to meet load. Today, without offshore wind, old, polluting, inefficient peaking units in the north are used to meet peak load demand and are setting the market price. When the New Jersey Energy Link is able to bring in offshore wind, and to move surplus lower cost clean nuclear and natural gas energy from southern New Jersey to northern New Jersey, those expensive peaking units will be displaced, and so the overall market-clearing price will settle at a much lower level. This is a benefit that will be enjoyed by all ratepayers in that market.
Reducing Congestion and Improving Reliability
In addition to impacting market-clearing prices, offshore wind carried by the Atlantic Wind Connection will also relieve costly grid congestion. Like heavy road traffic that slows the progress of people and goods, congestion on the electricity grid prevents lower cost and cleaner generating plants from serving customers. That is, when there is congestion on our grid, we cannot utilize the most efficient sources because they cannot get through. Think of the Atlantic Wind Connection as a north-south highway that allows the least-cost energy to flow freely, lowering prices and eliminating congestion costs.
Improving the north-south transmission pathways in the Mid-Atlantic region with an offshore backbone also supports grid reliability and security. This region includes our nation’s financial hub, major east coast transportation and chemical infrastructure, our largest naval base and other critical military and national security facilities, and the nation’s capital. Energy flows into this region largely from west to east along major transmission trunk lines and from south to north. During times of grid stress, due to severe storms, cyber-attack, physical attack, geomagnetic storm, or other significant event, the AWC north-south backbone can provide that extra margin of controllable transmission capacity that can keep the lights on. It does this by providing an alternate north-south path for moving power away from damaged or overloaded west-to-east or north-south terrestrial transmission lines.