Policy Recommendations

1. Enact the Defense Production Act for OSW,  Increase national security;
2. Set Regional Content Requirements and apply Build America, Buy America standards to all OSW projects;
3. Increase investment in the offshore wind workforce, and enhance partnerships between industry, labor, academic and government groups;

Enact the Defense Production Act for OSW,  Increase national security

To accelerate the development of offshore wind in the U.S. while promoting domestic job creation and national security, the Defense Production Act (DPA) should be authorized to allow for increased domestic production of offshore wind project components, including turbine manufacturing, construction, commissioning, and maintenance services.

The Defense Production Act (DPA) was enacted in 1950 as part of the broad civil defense and war mobilization effort against the Cold War ( Congressional Research Service, 2020 ). The current version of the law allows the sitting president to:

Under the Biden Administration, the DPA has also recently been utilized to significantly expand domestic solar and battery storage manufacturing, through expedited processing of critical minerals required for large-scale battery production and creation of solar component manufacturing facilities ( The White House, 2022 ). These efforts are a crucial component of the Administration’s goal to improve the accessibility of low-cost clean energy while reducing the national security risks associated with energy imports. While the U.S. has been a net energy exporter since 2019, imported fuels still account for around 22% of nationwide annual energy reliance. Enacting the DPA for offshore wind development would even further America’s energy independence and is crucial to maintain national security.

The offshore wind industry has shown ample potential to drive high-quality job growth while advancing the transition to carbon neutrality, as demonstrated by the development process in the UK and other leading countries. Supporting the expansion of the OSW domestic supply chain simultaneously decreases energy reliance on other nations throughout the capacity development process, contributing to the maintenance of energy security and opportunities for economic value through increased energy export. Applying DPA to support the domestic supply chain for OSW in a similar fashion to the Biden Administration’s enactment of the law for solar energy development would be the most effective and necessary intervention to implement domestic manufacturing at a rate that will support the current Department of Energy’s goals for 30 GW of capacity by 2030 and 300 GW by 2050.

Set Regional Content Requirements and apply Build America, Buy America standards to all OSW projects

To ensure high-quality regional job creation, economic benefit, and creation of a firm domestic OSW supply chain throughout the transition to Offshore Wind, the following should be prioritized:

(1) Setting Regional Content Requirements (RCRs) in high-development areas to aim for 20-60% of project materials, development, manufacturing, and maintenance processes to be completed by regional companies and workers by 2030.

Large-scale Offshore Wind deployment has the potential to create tens of thousands of American jobs while transitioning the nation to clean, domestically produced, and cost-effective energy. However, success is not ensured and accelerating the growth of the U.S. offshore wind supply chain is critical ( LEP, 2022 ). The demand for offshore wind is increasing in Asia and the region is projected to replace Europe as the world’s largest offshore wind market by the end of 2022. Maintaining a heavy reliance on foreign OSW supply chains will risk the sustainable growth of domestic suppliers in the U.S. ( Global Wind Energy Council, 2022 ).

Local Content Requirements (LCRs) are possible policy solutions to overcome these issues. LCRs require developers to source a certain percentage of supplies and services from local manufacturers or producers. In the existing OSW market, LCRs are part of the evaluation criteria for selecting a bid from a developer of an OSW project in some states (Kohley, 2022). For example, New York’s OSW bid evaluation criteria assign a weight of 20% to proposed in-state economic benefits. Specifically, the in-state purchase of goods and payments for workers in New York are evaluated alongside other economic beneficiaries ( New York State, 2022 ). In this way, LCRs incentivize developers to plan for higher utilization of local manufacturing in their proposed projects. According to the New York State Offshore Wind Master Plan’s scenario for “high use of local content and high market performance” producing 8 GW of energy from a regional OSW project by 2030 would create 45 times more manufacturing job opportunities in comparison to the “low use of local content and low market performance” (4 GW) scenario ( New York State, 2018 ). Similarly, New Jersey’s OSW project bid selection criteria have set a weight of 20% for evaluating the local economic impact of each proposal (Kohley, 2022).

When setting LCRs, it is also crucial for local, regional, and federal authorities to learn from the setbacks that other leading nations experienced with expanding their domestic supply chains during early developmental stages. In the UK, for example, setting a national Local Content Objective allowed even further reduction of LCOE for proposed projects alongside the creation of thousands of domestic jobs in manufacturing and project development. However, this shift was long overdue. Following more than ten years of progress in OSW, the government and offshore wind sector established the target of 60% UK lifetime content in domestic projects by 2030 ( BEIS, 2020 ). However, the EU filed a dispute with the World Trade Organization (WTO), pointing to the UK’s procedure for granting subsidies. Most notably, they asserted that the UK’s Contracts for Difference scheme (CfD) for Offshore Wind energy projects unfairly favored domestic products and suppliers over foreign competitors ( Baschunk, 2022 ). The CfD scheme was established with the aim of making OSW projects with 60% local content commercially viable, by covering the difference between the cost of renewable electricity generation and the regular market price for electricity through subsidies ( BEIS, 2020 ). Following negotiations, the EU and UK reached an out-of-court settlement where the UK agreed to remove their requirement for domestic content in the CfD scheme ( Busch, 2022 ).

Setting Regional Content Requirements (RCRs) in high-development areas is crucial for ensuring the fruition of regional OSW supply chains and economic growth ( ILR School, 2022 ). However, as demonstrated in the UK, government-led content requirements can potentially contradict international trade laws that prohibit unfair benefits for the use of domestic products over those of international competitors. One way that authorities can manage the tensions between international trade laws and LCRs is using the Jones Act, which the U.S. received an exemption for by the WTO through previous international negotiations ( Grennes, 2017 ). On the basis of this exemption, encouraging the usage of domestic vessels in lieu of the combination of foreign vessels and domestic feeder ships is a crucial option, both to boost local manufacturing and to improve cost efficiency for developing OSW projects. In addition to RCRs, expanding federal financial support for OSW projects should be prioritized. For instance, the Bipartisan Infrastructure Law’s “Build America, Buy America'' provisions ensure that federally funded infrastructure projects use American-made iron, steel, construction materials, and manufactured products ( The White House, 2022 ). Therefore, applying these provisions to all OSW projects would assist in ensuring the expansion of the OSW domestic supply chain.

Increase investment in the offshore wind workforce, and enhance partnerships between industry, labor, academic and government groups

Increase collaboration between industry, academia, government and labor groups to generate direct pathways to quality, union jobs, via educational programs, union apprenticeships and on-the-job training. Such partnerships will help ensure the labor demand for a growing offshore wind industry is met while supporting a just transition for frontline communities and fossil fuel workers.

If the U.S. is to meet and exceed the existing 30 GW target set by the Biden Administration, a domestic offshore wind supply chain would require an estimated 12,300-49,000 full time trained individuals annually (Shields et al., 2022). Without skilled employees ready to fill new job openings, offshore wind growth in the U.S. will be constrained and the cost of projects will increase (Kohley, 2022). Furthermore, the Biden Administration announced that meeting the 30 GW goal would trigger “​​tens of thousands of good-paying, union jobs,” signaling high quality jobs are a priority to meeting this target ( The White House, 2021 ). On June 23, 2022, The U.S. Department of Energy announced it is leading the buildout of an offshore wind supply chain roadmap through its participation in the new White House-led Federal-State Offshore Wind Implementation Partnership. This unprecedented type of forum is composed of 11 East Coast Governors and Administration officials to provide space for collaboration to generate a robust U.S. OSW supply chain and workforce (Energy.gov, 2022). To increase the success of this plan, partnerships between not only state and federal governments, but also labor unions, educational institutions, and the industry must be established to help create a clear and trusted pathway to union jobs that are accessible to frontline communities (Shields et al., 2022; DOL, n.d.). These partnerships are also imperative to ensure a just transition for fossil fuel workers, providing retraining programs and securing union jobs.

Across the U.S., over 195 wind energy education and training programs are offered by major universities, community colleges, and other educational opportunities as mapped by the U.S. Office of Energy Efficiency and Renewable Energy  ( EERE, 2022c ) . The U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy also has designed a Wind For Schools, a program to help primary educational schools integrate wind energy learning into the classroom and a Collegiate Wind Competition (CWC) for undergraduate students to gain real world experiences solving complex wind energy projects in preparation to enter the offshore wind market  ( EERE, 2022a; EERE, 2022b).  E ven with numerous programs, individuals experience difficulties seeking training opportunities. Collaboration between labor unions and educational institutions as well as industry partners can help identify individuals and ensure workers are trained appropriately to create a high and reliable work standard (Shields et al., 2022). Working together, the federal government and the industry can provide guidance to standardize training programs and provide direct funding for union apprenticeship programs, to increase the quality, reach, and number of such opportunities.

Key learnings from the UK can be applied to the U.S. In the UK, the Offshore Wind Sector Deal strengthened the partnerships between sectors and set specific targets for increasing the diversity and size of apprenticeship programs in the industry (BEIS,  2020 ). UK apprenticeship programs are often put on in partnership with educational institutions and wind energy companies. These programs are paid apprenticeships, most on an increasing pay scale, and are direct pipelines to employment. Currently, select states are integrating a similar framework to accelerate OSW development, but more collaboration with labor unions is needed.

A state government and training center partnership exists in Maryland, with the Maryland Energy Administration (MEA) dedicating $1.2 million in 2022 to be allocated to existing offshore workforce training centers through its Offshore Wind Workforce Training Grant Program in Maryland ( Maryland Energy Administration, 2021 ). The grant is meant to help offset training facilities’ capital expenditure investments and operating costs ( Maryland Energy Administration, 2021 ). Atlantic Shores Offshore Wind a 1,510 MW project that is a joint venture with EDF Renewables North America and Shell New Energies U.S. LLC has signed an agreement with six unions – Eastern Atlantic States Regional Council of Carpenters, Laborers’ International Union of North America, International Brotherhood of Electrical Workers Local 456, Local 400 and Local 351, International Union of Operating Engineers Local 825, Ironworkers International and Eastern Millwright Regional Council–  to commit to training local residents and tradespeople  (Mercure, 2021 ; State of New Jersey Board of Public Utilities, 2021 ) . The impact of such programs can be amplified if the federal government allocates substantial recurring funding for clean energy union apprenticeship programs.