The focus of analysis was on how New York could be impacted by the development of wind farms in terms of new jobs, wages and sales.
Continuing our economic impact series, we now travel from the warm waters of the Florida Keys to the cool waters of the Great Lakes. In 2010, Camoin Associates participated in an analysis of the potential economic impact of offshore wind farms in the Great Lakes. The focus of the analysis was on how New York State could be impacted by the development of wind farms in terms of new jobs, wages, and sales. Camoin Associates built a series of models to estimate the economic impact of three different levels of offshore wind industry development in New York State. These impact scenarios were used to demonstrate the probable economic impact if the State is able to establish itself as a leader in the offshore wind industry.
This analysis required significant research to better understand general energy-sector trends as well as offshore wind economics and experimentation occurring in Europe with novel systems and large arrays of offshore turbines. The project team looked into what industry assets currently exist in New York State, what opportunities exist, and what constraints must be mitigated.
Using this research, three different scenarios were modeled based on how quickly and intensely the offshore wind industry developed and how much of the industry activity could be attracted to NYS. The most optimistic scenario assumed the following:
- New York establishes a dominant cluster of major manufacturers and their supply chain vendors and 50% of the value of all components used in US offshore installations is produced by in-state firms.
- Two installation vessels specialized for freshwater projects are retrofitted in the State over a 20-year period.
- New York’s universities and private research groups rival those in Europe and Asia in R&D spending and capture one third of all public offshore wind energy related R&D spending in the US.
Based on the research and economic modeling, it was determined that the economic development potential is enormous if the Great Lakes offshore wind market becomes well-developed enough to sustain component manufacturing in the region and if New York State is successful at becoming a recognized center of innovation in the industry. If the above assumptions come to fruition, the annual economic impact of this scenario on New York State is over 7,000 jobs, nearly $500 million in earnings, and nearly $2 billion in sales at New York based businesses for 20 years.
The outcome of the analysis, besides a summary of the jobs, earnings, and sales generated by the wind industry in New York State, was a series of recommendations to those involved about how they could support the wind industry in its efforts to expand in New York State. Some recommendations include:
- Great Lakes regional collaboration
- Funding a freshwater offshore wind research center
- Unique pricing systems and streamlined process
- Port upgrade competitions
- Investing in a Great Lakes transmission network
- Tax credits for offshore wind component manufacturing
Editor’s Note: Over the next few months we will be highlighting some our recent economic and fiscal impact analyses. These projects range from Florida to Maine and vary significantly in project type from mixed-use to rail-trail. At the end of the series we will present some of the highlights and lessons learned for conducting impact analyses.