Shipbuilding on the ballot? Offshore wind sees an opening

By David Iaconangelo, Heather Richards | 11/02/2020 07:22 AM EST

Shipbuilding is not an industry that either U.S. presidential hopeful has championed over months of campaigning.

 Block Island, the first offshore wind farm in the country.

Block Island, the first offshore wind farm in the country. Gary Norton/NREL

Shipbuilding is not an industry that either U.S. presidential hopeful has championed over months of campaigning.

But Democratic nominee Joe Biden or President Trump could decide its fortune based on their plans for the burgeoning offshore wind industry.

Shipbuilding is now geared toward the country’s offshore oil and gas sector. But that could change: The prospect of thousands of offshore wind turbines being installed in the sea by U.S.-flagged ships, tended for years by well-paid mariners, has spurred talk of a renaissance.


"It’s going to bring back U.S. shipbuilding, is the basic bottom line," said Liz Burdock, president of the Business Network for Offshore Wind.

Renewable energy and labor leaders say tomorrow’s election could be a make-or-break moment for the technology. While Trump hasn’t directly stood in offshore wind developers’ way, advocates see Biden’s $2 trillion climate plan and 100% clean electricity commitment as a shot in the arm for the fledgling U.S. industry.

Trump has lambasted Biden’s plan as disastrous for taxpayers and fossil fuel jobs, using the final days of the presidential campaign to double down on his commitment to fracking and the oil and gas industry.

"Not to put too bright a point on it, but the stakes [of the election] are huge," said Jennifer Palestrant, chief deputy at the Virginia Department of Mines, Minerals and Energy, which oversees the state’s development of offshore wind.

Critics say the Interior Department under Trump has slowed permitting of the first offshore wind project of scale — the 800-megawatt Vineyard Wind proposal off the coast of Martha’s Vineyard — and the administration’s rallying cry for fossil fuels has upstaged its on-again, off-again support for offshore wind.

Developers have largely declined to comment on Trump’s criticisms of wind generation as unreliable, or his unfounded accusations that turbines cause cancer. But experts have tried to translate those comments, along with Trump’s and Biden’s policy proposals to date, into numbers — and project vastly different outcomes for the sector’s growth depending on tomorrow’s results.

A win for Biden would translate to a roughly 30% increase in the installed capacity of offshore wind power by 2030, compared with a base case scenario, said Dan Shreve, head of wind research at the Wood Mackenzie consultancy.

Wood Mackenzie’s low-end projection features 30% less growth than the base case — and it dovetails with a second term for Trump.

Pinned to those figures are the fates of related industries that have set their hopes on the offshore wind supply chain, from New London, Conn., ports to Louisiana shipyards.

‘I don’t want to be cheated’

Since 1980, half of U.S. major shipyards have closed as buyers have sought cheaper vessels made in Asia, according to the nonprofit Eno Center for Transportation. And in the last two decades alone, some 20,500 U.S. manufacturers of ship components have folded, according to a 2018 Department of Defense report.

Offshore wind proponents like Burdock say the industry could sprout shipyards far from the East Coast hubs of power demand — especially in red states along the Gulf Coast. "It shows that offshore wind is not just a blue-state economic development industry," she said.

Over the next decade, developers are projected to need hundreds of vessels to erect turbines off the East Coast, according to a 2013 analysis performed for the Energy Department by consultancy Douglas-Westwood Ltd.

Shipbuilder trade groups think that should translate to a boom in construction.

"This is the biggest market we’ve seen coming online in a generation," said Matthew Paxton, president of the Shipbuilders Council of America.

But there are lingering suspicions between the shipbuilders and the offshore wind industry.

Foreign shipyards already have experience making the types of specialized vessels needed for offshore turbine installations. And in many cases, they could do it for far cheaper.

Developers have used European ships for key work on the first two U.S. pilot projects. And although industry leaders like Ørsted A/S and Dominion Energy Inc. have already begun placing orders for U.S. vessels, wind trade groups have lobbied to preserve flexibility on where they source some of their biggest and most expensive ships.

"If there’s any caution in my voice, it’s because when you talk to the offshore wind guys, they want this to go with as few U.S. jobs as possible. And I’d say, that’s not going to work," said Paxton.

"I don’t want to be cheated out of this [opportunity]," he added.

The 100-year-old Jones Act tilts the odds in domestic shipbuilders’ favor. Under the law, any ship that moves cargo — like blades or nacelles, the gearboxes the house wind turbines’ core generating equipment — from one U.S. port to another must be U.S.-flagged. Seventy-five percent of the ship’s crew must also be American citizens.

Free-market groups have for years advocated for the law’s repeal, but it still has bipartisan support in Congress.

Lobbying battles

Wind advocates at the American Wind Energy Association (AWEA) say there will be "a huge need for U.S. vessels" if the current pipeline of projects goes forward.

That was underscored last month by an announcement by Ørsted and utility partner Eversource Energy, which said the two companies would invest in their "first Jones Act-compliant vessel".

The ship’s construction will create over 300 new jobs at shipyards in Florida, Louisiana and Mississippi, according to the companies. The companies did not disclose a price tag, though industry sources put the figure at around $80 million.

When the companies’ three projects off New York are completed, they plan to use the ship to carry teams of technicians to maintain the turbines.

But offshore wind advocates say developers should be able to shop abroad for the specialized vessels used to install turbines, whose blades can be the length of a football field.

Those vessels often cost hundreds of millions of dollars and take years to procure. And the question of whether they should be U.S.-made has pitted the wind and shipbuilding industries against each other in lobbying battles.

Much of the $630,000 spent by the Shipbuilders Council of America on lobbying this year concerned enforcement of the Jones Act for offshore wind and other industries, according to Senate disclosures. One of those issues was legislation requiring developers to use U.S. ships during construction of offshore turbines. A bill on the subject passed the House last year, though it didn’t advance in the Senate. And this year, a similar amendment to the National Defense Authorization Act was stripped out, at the behest of wind advocates.

"It’s way more efficient to use a U.S.-flagged vessel to install 80 turbines [on a utility-scale project]. But it’s a huge upfront cost," said Claire Richer, director of federal affairs at AWEA.

Hull or Norfolk?

Within 10 years, every teakettle in the United Kingdom will be powered by offshore wind, Prime Minister Boris Johnson said in colorful remarks last month that accompanied the United Kingdom’s $200 million commitment to offshore wind manufacturing (Energywire, Oct. 7).

U.S. labor groups are hoping a Biden administration would follow in Britain’s footsteps.

Jason Walsh, executive director of the clean energy and labor organization BlueGreen Alliance, says offshore wind provides an opportunity to boost union jobs at scale.

Lauding Biden’s progressive energy transition platform and support for "Buy American" commitments, the group made its first-ever political endorsement in its 14-year history.

There was "too much at stake" to do otherwise, Walsh said. "I don’t think this industry is going to get built if Trump gets [a second term]," he said.

Advocates say thousands of jobs are on the line.

Wind build-out could foster long-term demand for union electricians, welders and construction workers, who string together hours on separate projects to make a living, Walsh said.

"I don’t think we can wrap our heads around just how much product will be required for installation of over 50 gigawatts of offshore wind," he said.

The Block Island project in Rhode Island is a model, he said. The five-turbine wind farm is the first offshore operation in the United States. It was completed in 2016 and created 300 jobs with several different trade groups, Walsh said.

The labor potential goes beyond build-out to operation and maintenance, port employment, and eventually manufacturing, which Britain is now capitalizing on, he said.

"Economic development [organizations] from Norfolk to Baltimore to Maine should be looking really, really close [at this] as a growth opportunity," Walsh said.

Fishing groups, which are perhaps the most persistent skeptics of offshore wind’s effects, have pushed back against predictions of a stateside job boom.

One analysis, commissioned by the Responsible Offshore Development Alliance and published over the summer, found that as many as 86,000 new positions would emerge from offshore wind — but virtually all of them would be in Europe, whose manufacturers would fail to build new U.S.-based factories. Through 2030, American workers would mostly be used for operating and maintaining turbines, filling around 5,000 to 7,000 jobs, said the analysis.

Many state officials are far more optimistic about U.S. job benefits. But they also acknowledge their role in preparing a local workforce. One such program launched last month in Virginia with support from energy officials and is aimed at certifying workers to inspect and maintain turbines out at sea.

"Salt and water can be nasty things," said Palestrant, of the Virginia Department of Mines, Minerals and Energy. "It’s getting out there, performing regular maintenance, checking on all the systems."

Palestrant said she hopes Virginia can ultimately lure European companies that make offshore turbine parts.

But the 25 GW of projects targeted by East Coast states may not convince those companies to invest in ways that could require an army of Virginian welders, pipefitters and other skilled tradesmen, she said.

"They need to know that over the next 30 years, there’s going to be a consistent, year-in, year-out dependable pipeline of projects," said Palestrant. "They’ve got to see something like 50 GW."

That aligns with Biden’s pledge to double the offshore wind project pipeline, she said.

Willett Kempton, a professor at the University of Delaware and co-founder of its Center for Research in Wind, said that even if U.S. offshore wind projects were to multiply, manufacturing might develop in a piecemeal way.

Most investors will want gearboxes, designed to last offshore, to be made by experienced European suppliers for years to come, he said. Less-tricky parts like monopiles — steel plates that get rolled and welded into cylinders — could be low-hanging fruit for U.S. production.

Ørsted, for example, has committed to helping raise a monopile factory in New Jersey, though it has had to reaffirm its commitment to that project in recent months in response to some state lawmakers’ accusations that the power firm is lagging on its promise (E&E News PM, Sept. 10).

The global supply market for offshore wind is far ahead of the United States, and hubs like Hull in the United Kingdom are already ramping up wind turbine manufacturing.

But once a certain amount of the supply chain is supported from within the United States, Kempton said, the question will be: "Can you cast blades cheaper in Hull, or can you cast blades cheaper in Norfolk [Va.]?

"And probably the answer to that is Norfolk."

But federal policy is likely crucial if sectors like manufacturing are to be goosed by green demand, said Robert Scott, a senior economist at the Economic Policy Institute.

Scott published a white paper last month arguing that federal investment in clean energy and infrastructure, alongside policy to drive up U.S. exports, could support up to 13 million high-paying jobs and help restructure a post-COVID-19 U.S. economy away from the service sector.

Trump’s infrastructure promises — the White House was reportedly preparing a $1 trillion infrastructure plan geared toward highways, bridges and rural broadband earlier this year — have fallen flat, he said.

"He’s said he is going to have an infrastructure agenda for four years, and nothing," Scott said.

The Trump campaign did not respond to a request for comment.

The need for Capitol Hill

Biden has called for a carbon-free U.S. electricity grid by 2035 if elected. Making good on that commitment will require lots of offshore wind power, said Amanda Myers, a policy analyst at Energy Innovation: Policy and Technology LLC. It would also require Congress to cooperate.

The Democratic-controlled House has generally embraced measures to rapidly transition to clean energy sources like offshore wind. But the most aggressive proposals — like the Green New Deal — have failed to capture bipartisan support or find traction in the Republican-controlled Senate over fears they could undermine the economy, elbow out state-level energy policies and erase fossil fuel jobs.

There are a few exceptions, like bipartisan initiatives in both chambers to share revenue from offshore wind power with states.

If Democrats win control of the Senate, it could bolster the case made by climate hawks from offshore wind-friendly states like Massachusetts and Rhode Island. But there is conflict even among Democrats over how to navigate build-out of a large offshore wind sector in waters long held by commercial fishermen.

As Interior weighed approvals for Massachusetts’ Vineyard Wind offshore wind project, Democratic Sen. Sheldon Whitehouse of Rhode Island was among those pressing to tap the brakes on permitting until more research had been done on the industry’s impacts to other ocean users.

Still, should Biden win, renewable legislation bartered with a friendly Capitol Hill would be more effective than governance through executive order, said Shreve of Wood Mackenzie. Under a Republican-controlled Senate, a Biden administration could push renewables on public lands — which includes offshore — but may be stymied on the large infrastructure packages that would drive job creation for the energy transition at scale, he said.

Congress has various other avenues to prop up wind, like directing funding to the Bureau of Ocean Energy Management to accelerate permitting. And lawmakers could extend tax credits available for offshore wind, an area where wind developers have increased lobbying efforts, experts note.

And there is the Jones Act: Even if Congress doesn’t revise the backbone maritime law, executive agencies have power to grant waivers and set guidelines that could either lock in U.S. shipbuilders’ advantages or offer flexibility to developers.

The Trump administration’s stance on the Jones Act has varied over the years, with the president reportedly backing a waiver of the law for liquefied natural gas shipments before ultimately deciding against it.

Biden has written to maritime workers’ unions to assure them he would protect the law.

For offshore wind’s future, that promise also introduces a dilemma, said AWEA’s Richer.

"How do we meet clean energy goals as quickly as possible, while employing as many U.S. workers as possible?" she said. "I think that’s what folks are going to be trying to figure out."