More States Back Offshore Wind, Citing Economic Potential

Many states are looking to offshore wind as a key source of clean energy that’s essential in their fight against climate change. Other states are just looking to cash in.

“States and regions that invest in offshore wind are going to benefit greatly economically,” said South Carolina state Rep. Jason Elliott, a Republican. “If South Carolina doesn’t take advantage of this emerging industry, the concern would be that it will go elsewhere.”

Elliott sponsored a bill that became law this year directing state Commerce Department officials to study the economic potential of producing equipment needed for the offshore wind industry. South Carolina lags other Atlantic coast states on policies aimed at putting turbines in the water, partly because of a reluctance to impose renewable energy mandates on electricity suppliers. But Elliott and other state leaders want to compete for the fabrication, manufacturing and shipping of components for the fast-developing industry.

Those investments eventually could open the door for projects to install turbines off South Carolina’s coast, Elliott said.

The offshore wind industry, which produces little electricity today, is poised to grow exponentially in the coming years as long-awaited projects come online, and more waters are opened for leasing. President Joe Biden has called for 30 gigawatts of offshore wind capacity by 2030, enough to power more than 10 million homes. Experts say that growth has been driven by state policies, largely in the Northeast, which mandate certain amounts of offshore wind energy.

While those climate-focused policies — as well as favorable wind conditions in the region — have put Atlantic waters on the cusp of generating significant power, the success of those efforts has caught the attention of other states that see the industry as a potential economic driver.

Louisiana legislators, for example, passed a law this year to allow for leasing of state waters in the Gulf of Mexico for offshore wind projects. The state’s Mineral and Energy Board must now craft rules to establish a leasing process.

“There’s no doubt we are experiencing the effects of climate change, but primarily, this bill is to provide an opportunity,” said state Rep. Jerome Zeringue, the Republican who sponsored the measure. “One wind farm can create 5,000 jobs, and that has the potential to benefit this region.”

State Leaders

For years, many East Coast states have laid the groundwork for offshore wind power. Eight states set goals or mandates that total 39 gigawatts of capacity by 2040. Many have invested in ports, workforce development, transmission infrastructure and manufacturing sectors. 

Fifteen different projects have reached the permitting phase, ranging from North Carolina to Maine. Meanwhile, the Biden administration has moved to offer areas in the Pacific Ocean and Gulf of Mexico for offshore wind leasing, as states on the West Coast and the Gulf have gotten in on the action.

Ava Ibanez, project manager for ocean policy at the National Caucus of Environmental Legislators, said state lawmakers increasingly have pushed offshore wind legislation in recent years. Ten coastal states considered 27 offshore wind bills in 2022, 10 of which have passed so far, she said. 

States that have been longtime leaders on offshore wind policy remained active this year. Massachusetts lawmakers passed a clean energy bill with a major focus on offshore wind. The bill would establish an investment trust fund to support the industry, which could include everything from ports to manufacturing to training. Lawmakers have not yet determined funding levels for that program.

The measure would also eliminate strict price caps on electricity projects, allowing other benefits such as local manufacturing to be considered on bids — a provision that likely would benefit offshore wind projects.

“For a little state like us, it’s a shift to realize that we could be an energy net exporter once these projects are built out,” said state Sen. Julian Cyr, a Democrat who has been among the state’s top backers of offshore wind. “We have an opportunity to be a real leader in this space, but it’s not going to happen without persistent state investment.”

Cyr said Gov. Charlie Baker, a Republican, may seek to veto sections of the bill related to buildings and transportation, but he didn’t expect much “meddling” on the offshore wind provisions. Baker’s office did not respond to a request for comment.

Maryland lawmakers passed a law this year streamlining the payment structure for offshore wind projects’ renewable energy credits. State Sen. Brian Feldman, the Democrat who sponsored the measure, said it was a technical cleanup more than a groundbreaking advance, but illustrates the policy work that needs to happen for the industry to take off.

“The process we had in place was extremely inefficient,” he said. “It’s not good in terms of developing offshore wind to have the way the payment flow works be cumbersome and complicated.”

Maryland is committed to procuring more than 1.5 gigawatts of offshore wind by 2030. Feldman pointed to the upcoming gubernatorial election, in which Democrat Wes Moore is favored to succeed Republican Gov. Larry Hogan, suggesting that Moore may be willing to support more aggressive clean energy policies.

Ibanez, the legislative analyst, noted bills passed in other states: Rhode Island set a procurement target of 600 to 1,000 megawatts, New Hampshire lawmakers increased the state’s role in planning offshore wind development, and Virginia provided funding support for the state’s Office of Offshore Wind.

Progress also has come from state regulatory agencies. Federal officials are expected to hold the first offshore wind lease sale in California waters this fall, and state regulators there have twice voted to allow the lease phase of projects to move forward. Meanwhile, a draft report from the California Energy Commission signaled that the state could target as much as 20 gigawatts of offshore wind power by 2050.

“We’re a lot further along than we were in January,” said Adam Stern, executive director of Offshore Wind California, a trade group promoting the industry. “There are a lot of things ahead of us, but we’re feeling very positive about the state of events right now.”

Stern called for lawmakers to approve Democratic Gov. Gavin Newsom’s budget request of $45 million to support port upgrades needed by the industry, calling it a “welcome initial investment.” He said the state also needs to resolve how it will handle power purchase agreements for offshore wind. 

‘We Have the Infrastructure’

In the states that have been less focused on climate policy, the interest in offshore wind shows that leaders see serious economic potential.

“There’s going to be a significant increase in energy demand, and it’s going to require all forms of energy,” said Zeringue, the Louisiana lawmaker.

Zeringue said his state is uniquely poised to build offshore wind projects, capitalizing on the coastal construction expertise and infrastructure already serving the oil and gas industry.

Under the law enacted earlier this year, Zeringue said he hopes to have the first offshore lease sale in state waters within 12 months.

“If you can build an oil rig, you can build a wind turbine,” he said. “We have the infrastructure and the manpower.”