The wheels are in motion for California’s offshore wind industry. At the start of 2019, the first phases of the federal leasing process are underway—potentially leading to a lease for offshore wind as early as 2020—and domestic and international firms are eyeing California’s market and creating strategic partnerships. Two entities, the Redwood Coast Energy Authority (RCEA) and Castle Wind, have proposed projects off the coast of Humboldt County and San Luis Obispo County, respectively.
Developer interest is warranted: With 112 GW of technical offshore wind resource potential along its coastline—enough to supply about 1.5 times the state’s annual electric energy use—California has the eighth-highest resource potential in the United States. As the state moves toward a zero-carbon electricity mix in 2045, offshore wind can provide value to the grid by balancing solar generation. Floating offshore wind technology, which is better suited for California due to its deep waters, is relatively new but has demonstrated impressive capacity factors. Scientists project that California’s floating offshore wind turbines could reach capacity factors of over 70 percent, in other words, generating 70 percent of their maximum theoretical output. This capacity factor is two to three times that of solar, nearly twice that of land-based wind, and even greater than that of coal.
In addition to grid reliability, offshore wind offers a number of other benefits to Californians, including the opportunity to develop a new industry from the ground up. We estimate that if California were to install 18 GW of offshore wind capacity by 2045, the state could support over 17,500 jobs in the offshore wind industry, related downstream industries, and surrounding economy in that year. However, the state will need to guide industry growth with a cluster-based approach: creating market certainty, training workers, and facilitating connections in its innovation ecosystem, among other strategies. Working hand in glove with key federal stakeholders such as the U.S. Navy will be needed to create win-win solutions for less restrictive maritime development.
Through extensive research and over forty interviews with stakeholders and experts in California, the authors assessed the current challenges and opportunities for offshore wind development. The report:
- Summarizes offshore wind activities in California to date;
- Presents the benefits of offshore wind in California;
- Outlines cluster-based strategies for economic development and current competitive advantages;
- Details development scenarios for offshore wind industry growth from 2019 to 2045 and associated economic impacts; and
- Suggests policy recommendations to pursue and investigate offshore wind in a holistic manner.
Summary of Recommendations
The report culminates in high-level recommendations for California’s leaders based on best practices in the United States and abroad. We recommend that the state bring a systems-level approach to offshore wind development that sets a broad vision for industry growth and considers near- and long-term industry needs and opportunities. While each recommendation can be viewed as a stand-alone option, the recommendations are intended to be complementary and would be more powerful if adopted as a package.
Policy 1: Appoint a California Offshore Wind Czar
Growing California’s offshore wind industry will require comprehensive logistics and holistic planning efforts across the state, federal, and international levels. The governor should consider appointing a California Offshore Wind Czar to create and lead a vision for growth that aligns with the values of Californians and to serve as the primary point of contact for California’s strategic offshore wind efforts. The Czar could be responsible for coordinating activities among state agencies, fostering community programs, advocating for policy and procedural changes in the federal leasing process, building international relationships for knowledge exchange, and capturing domestic and foreign direct investment opportunities.
Policy 2: Set a Market Acceleration Target and Establish a Comprehensive Approach to Studies
Currently, California has limited resources dedicated to sustainably building offshore wind projects and ensuring industry growth aligns with state values and leads to lower energy costs for ratepayers. By developing a state vision spurred by a market acceleration target, California leaders could prioritize areas of research that establish industry development guidelines and frameworks, survey potential impacts on coastal ecosystems, consider innovative financing mechanisms, and streamline project development, among other topics.
Policy 3: Establish a Phased Approach to Offshore Wind Workforce Development
California boasts a robust workforce training infrastructure that it can leverage to build a skilled and ready offshore wind workforce. Near-term activities could map workforce planning, convene stakeholder groups on best practice strategies, and target applicant pools interested in working in the offshore wind industry. Long-term efforts could help build a diverse and inclusive workforce, formalize partnerships between industry and training providers, and ensure investments in offshore wind safety training, operations and maintenance (O&M), monitoring and verification, and technology research and development.
Policy 4: Align Innovation and Access to Capital Policies with Industry Needs
Offshore wind innovation is key to lowering energy costs, increasing grid integration, opening up new markets, protecting marine ecosystems, and improving working conditions. California leaders could facilitate offshore wind research, collaboration, knowledge exchange, and business development through joint industry projects, multidisciplinary academic programs, industry/university partnerships, business accelerators, and access to capital mechanisms that help companies overcome barriers to market entry.
Policy 5: Upgrade Ports and Establish Port Innovation Districts
Globally, ports are the nucleus of offshore wind development, often serving as hubs for the assembly, staging, fabrication, and construction of turbine components and long-term O&M activities. As California cultivates its offshore wind industry, continued port planning and upgrades will be critical to support evolving industry operations. State activities could focus on upgrading key ports to catalyze early-stage projects, building port innovation districts, and prioritizing local community benefits in port revitalization efforts.