The offshore wind industry could eventually support thousands of Hampton Roads jobs and pump $740 million into the Virginia economy, according to a new economic impact study.
The study estimates that 5,200 jobs, the majority of which would be based in Hampton Roads, could be supported for each gigawatt of electricity the region installs and services annually, according to study author and Richmond consulting firm Mangum Economics.
“If it can grow on the East Coast, we think that it can be supported, in large part, from Hampton Roads,” said Doug Smith, president and CEO of the Hampton Roads Alliance, which paid for the study.
The report assumes that several aspects of the offshore supply chain will eventually be based in Hampton Roads — it mentions companies that make turbine blades, towers and offshore substations as examples.
The study assumes that Dominion Energy completes construction of its 2.6-gigawatt offshore project 27 miles off the coast of Virginia Beach. The construction phase of the project will produce 900 jobs annually from 2020-2026, according to the study. Once complete, the operation of the project is expected to generate 1,100 jobs annually.
“This is a reasonable but conservative estimate of the impact,” the study says. “In time, it may prove to be a significant underestimate, if the project attracts new businesses to Hampton Roads or Virginia in order to participate in the offshore wind energy supply chain.”
Measuring the scale of offshore wind was an intriguing proposition for Mangum, founder and CEO Fletcher Mangum said. For one thing, the industry currently doesn’t exist in an established form on the East Coast. So, the research firm looked to Europe, and more specifically, to the United Kingdom, to inform how an offshore wind turbine construction and maintenance supply chain might work. The U.K. generates around 10.4 gigawatts of electricity annually from offshore wind, according to the RenewableUK industry group.
David Zorn, consultant with Mangum, said he solidified his confidence in the study’s figures when estimating the cost of Dominion’s Virginia Beach project. After calculating the cost using Mangum figures, he then compared to the Dominion estimate, and realized the Mangum number was within 10%.
“That was totally independent of Dominion’s cost estimate,” he said.
The study does not directly account for the impact of a planned 2.5-gigawatt wind farm 27 miles off the coast of Kitty Hawk, North Carolina. Avangrid Renewables plans to construct the project and have it running by as soon as 2026. However, Zorn said the Dominion and Avangrid projects would be just a small portion of the one-gigawatt-a-year estimate. Dominion would be putting 2.6 gigawatts online over a seven-year period, and Avangrid’s project would add 2.5 gigawatts over six years or more.
“A better way to think about (the estimate) is if there are three Dominion-sized projects being served by Hampton Roads all at the same time,” Zorn said.
Two other parts of the wind study will be released in the future, Smith said. One will analyze the assets already in place in Hampton Roads, and another will measure the workforce needs for the offshore wind supply chain.
The study cost $70,000 and was paid for by the Hampton Roads Alliance. The cost is part of matching funding the organization is contributing for a $529,788 GO Virginia grant related to attracting offshore wind companies to the region.
The Hampton Roads Alliance is a regional economic development organization led by business leaders, 11 cities and counties and academic institutions. The public-private partnership is funded by both private sector investors and Hampton Roads governments.
View the full report at HamptonRoadsAlliance.com.