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Study gauges economic impact of offshore wind

Job, tax benefits for Mass. much greater than Canadian hydro imports

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MASSACHUSETTS WON’T GAIN MUCH economically by importing hydro-electricity from Quebec into New England, but a new report indicates the Bay State’s upcoming procurement for offshore wind will have a positive impact.

A study commissioned by Vineyard Wind, one of three bidders on the procurement, said an 800 megawatt offshore wind project would yield between 1,180 and 1,633 direct, full-time equivalent jobs in Massachusetts, with most of them in southeastern Massachusetts. Most of the jobs would be in development and construction, with only about 80 in ongoing operations and maintenance.

The project is also expected to generate $17 million a year in new state and local tax revenue, the report said.

Vineyard Wind commissioned the Public Policy Center at UMass Dartmouth to study the economic impacts of an 800 megawatt and 400 megawatt project. Only the report for an 800 megawatt project was released.

Michael Goodman, the executive director of the UMass Dartmouth center and one of the authors of the report, said the jobs will be high paying (wages ranging from $77,671 to $85,021) and located in a section of the state that needs them.

To meet its emissions targets, Massachusetts is in the midst of negotiating a contract for the import of hydro-electricity from Quebec. Most of the economic benefits of the imported electricity (jobs, taxes, and economic development) will flow out of state to Quebec and which ever state hosts the transmission line – either New Hampshire or Maine.

By contrast, the offshore wind procurement is focused on companies that will build wind farms off the coast of Massachusetts and use Massachusetts as a staging area. Goodman said the UMass analysis of Vineyard Wind’s proposal is unique to that project, but he acknowledged the ventures of the other two bidders (Bay State Wind and Deepwater Wind) would probably have a somewhat similar economic impact.

Massachusetts will procure 1,600 megawatts of offshore wind in stages. The initial stage could run anywhere from 250 megawatts to a maximum of 800 megawatts. All of the bidders were required to submit 400 megawatt bids.

The bidders have engaged in a heated behind-the-scenes debate over the optimum size of the initial procurement. Bay State Wind has indicated an 800 megawatt initial procurement would be best because it would deliver low prices for the power and signal to the offshore wind industry that Massachusetts is serious about garnering a large chunk of the emerging industry.

Deepwater Wind has taken a go-slow approach, urging the state to start small and go bigger over time. Officials at Deepwater Wind argue a smaller, initial procurement would give Massachusetts time to build up its capacity to serve the offshore wind industry and capture a greater chunk of the supply chain and more jobs. An 800 megawatt initial procurement, the company argues, could put a damper on bidding for future procurements and lead to more imports of equipment and labor from Europe.

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About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

Although the companies have made their arguments for big or small procurements, they have also hedged their bets with proposals of varying sizes.

Goodman said a bigger project is likely to prevail in the procurement because of its ability to offer a lower price due to economies of scale. “I don’t follow the logic of smaller is better,” he said.

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