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Summary:

As the Biden administration steps up efforts to expand offshore wind resources, this report finds that development of floating offshore wind in the waters off of Morro Bay and Humboldt Bay in California could create and support nearly 175,000 jobs, add $45 billion to the state’s economy, and produce 4.6 GW of wind energy.

California and federal lawmakers have an opportunity to hasten development—and scale the deployment—of this valuable new technology by enacting appropriate policies now. This is especially urgent on the heels of President Joe Biden signing into law the Inflation Reduction Act (IRA) of 2022. This bill includes full-value tax incentives for the manufacturing and deployment of technologies like offshore wind in the U.S. The IRA also includes billions of dollars for the U.S. Department of Energy (DOE) to help scale up technologies like floating offshore wind.

Offshore wind will diversify California’s renewable energy supply. This is critical to a stable electric grid and, crucially, can help the state achieve its long-term clean energy and climate ambitions in a least-cost manner. At the same time, floating offshore wind can create tens of thousands of new jobs for Californians, benefit underserved communities, and generate billions of dollars’ worth of wages, investments, economic benefits and tax revenues at the state, local and federal levels.

Policy Matters

California has been a global climate leader by passing policies that have created the market structures necessary to drive innovation, build the state’s clean energy economy and reduce carbon emissions. To maximize the economic benefits of harnessing the state’s offshore wind resources—especially in light of the major federal clean energy investments in the Inflation Reduction Act—state and federal governments must advance policies that will drive a sustainable, resilient offshore wind industry in California. Specifically, this includes:

// Development of a strategic plan by the end of 2023 that formalizes targets; identifies suitable sea space, programs and funding; advances economic and workforce development and in-state manufacturing opportunities; optimizes transmission planning and permitting; identifies potential impacts on ocean uses and the environment, as well as strategies for addressing those potential impacts; and helps de-risk projects early on in order to provide greater certainty for the industry.

// Ensuring that AB 525 requires the CEC to develop a permitting road-map that describes timeframes and milestones for a permitting process for offshore wind energy facilities and associated electricity and transmission infrastructure off the coast of California.

// The State of California must investigate the need for—and, if warranted, approve construction of—a subsea transmission cable from the Los Angeles Basin to Diablo Canyon. This could resolve current regional transmission constraints, reduce dependency on dirty natural gas peaker plants, and minimize threats of grid-induced wildfire, while providing transmission capacity to connect Southern California with potential future offshore wind development.

// State officials must leverage funding from the Infrastructure Investment and Jobs Act dedicated for grid modernization to upgrade the grid for offshore wind energy integration.

// Congress must invest more in grid modernization including passing a grid modernization tax credit that is essential to the development of offshore wind and the deployment of utility scale clean energy generally.

// The CEC, in partnership with the Ocean Protection Council and BOEM, must make continued investments in environmental planning and mapping for offshore wind development, primarily through the funding and support of the Offshore Wind Data Basin.

// The State should develop and fund an institute—under the purview of the California Coastal Commission—dedicated to the collecting and public sharing of data related to the monitoring and mitigation of ocean ecosystem impacts.

// BOEM must incorporate ocean ecosystem impact monitoring and mitigation stipulations in its lease agreements.

About this Report

The research team estimated local economic impacts for the Morro Bay and Humboldt Bay offshore wind projects using NREL’s modeling tool Jobs and Economic Development Impact (JEDI). JEDI is an input-output modeling tool used to generate outputs for employment, Gross Regional Product (GRP) and earnings for the construction and operations of a particular offshore wind project. The model illustrates the interdependent relationships between the different sectors of a region’s economy, to produce employment figures that vary according to the modeled project’s energy output and local content. The offshore wind activities modeled for the two locations are used as inputs into the model to estimate the multiplier effect on business, household, and government expenditures and industry employment. JEDI estimates these effects based on facility size, energy output, year of construction and the built-in economic multipliers specific to the project location. The economic outputs outlined in this report include:

// Jobs created from the construction of offshore wind facilities with 1.8 GW of capacity in Morro Bay and 1.2 GW in Humboldt Bay by 2030, a total of 3 GW in capacity across both sites.

// Jobs created from the construction of 4.2 GW of additional capacity in Morro Bay and 2.8 GW in Humboldt Bay between 2030 and 2040, to reach a total of 10 GW of offshore wind capacity across both sites.

// Annual number of jobs created for the operation of the initial 3 GW installed by 2030.

// Annual number of jobs created for the operation of 10 GW installed by 2040.

// Employment split by industry for Construction and Operations phases.

// Labor income resulting from jobs created by offshore wind projects.

// Additional GRP for Morro Bay and Humboldt Bay because of economic activity from offshore wind projects.

// Local, state, and federal tax revenue for Phases 1 and 2.

Summary:

New Mexico’s clean energy sector employed 12,014 workers by the end of 2021 an of 8.1% from 2021, the highest rate of job growth in the country. This strong growth was mainly driven by increase in clean fuels and clean vehicle jobs.

• 8.1% – New Mexico led the nation in clean energy job growth in 2021.
• 56% – Small businesses (<20 employees) accounted for nearly 3 out of every 5 clean energy jobs in New Mexico.
• Most Diverse New Mexico continues to have the most diverse clean energy workforce in the U.S. Hispanic and/or Latinos account for more than 1 in 5 workers (22.6%) and multiracial workers make up more than 1 in 7 (14.0%).
• 11.7% – Clean energy job wages are above state-specific medium wage.

Figure 4 // U.S. Clean Energy Employment by subsector 2021

Summary:

Clean jobs in North Carolina grew by over 4 percent in 2021, more than double the growth rate of the state’s total workforce for the year. That growth also demonstrates the clean energy economy’s strong recovery from the COVID-19 economic downturn and sets North Carolina up for even more clean energy job opportunities in the years to come — especially with the right policies in place.

• Black and African-Americans are under-represented by nearly 60% in North Carolina’s clean energy economy. Black workers occupy more than 21% of all jobs in the state, but less than 9% of clean energy jobs.
• North Carolina was home to 3.2% of the nation’s total clean energy jobs, 9th in the nation.
• More than two-thirds of the 27,217 clean energy jobs lost in North Carolina during the COVID-19 economic downturn had been regained by the end of 2021.
• Small businesses (<20 employees) accounted for almost 4 out of every 5 clean energy jobs in North Carolina, ranking 2nd among all 50 states.
• North Carolina ranked 1st among all 50 states in rural clean energy jobs, with 25,563 clean energy jobs in rural areas.

Figure 4 // U.S. Clean Energy Employment by subsector 2021

Figure 1 // Clean Energy Employment by year 2017–2021

Figure 3 //Clean Energy Employment by value chain 2021

Summary:

Clean energy and clean transportation jobs grew by more than 5 percent in 2021, with electric vehicle manufacturing jobs leading the way and renewable energy regaining most of the jobs lost in the COVID-19 economic downturn.

More than 3.2 million Americans were employed in renewable energy, energy efficiency, storage and grid modernization and clean fuels at the end of 2021, according to an E2 analysis of U.S. Department of Energy jobs data.

Approximately 156,000 jobs were added across all clean energy and clean vehicle subsectors in 2021—more than half of all jobs added to the total energy sector. Clean energy and clean transportation now employs more than 40 percent of all energy workers in America. Two years after the COVID-19 economic downturn wiped out more than 600,000 clean energy jobs, nearly 75 percent of those jobs were regained.

• 3.2 million Americans now work in clean energy, up 5 percent from a year earlier.
• Every clean energy subsector, from renewables and energy efficiency to electric vehicles and grid modernization, grew last year. Conversely, fossil fuel jobs fell 4 percent.
• While clean jobs grew along with most of the rest of the economy in 2021, they are still well below their pre-COVID peak, in part because of lingering uncertainty around federal policy.
• California, Texas and New York continue to lead the U.S. in total clean energy jobs. Following (in order) were Florida, Illinois, Michigan, Massachusetts, Ohio, North Carolina and Pennsylvania.
• New Mexico saw the biggest percentage growth in clean energy jobs last year after it passed some of the most promising clean energy policies in the country. But other states – led by Oklahoma, Kentucky, Indiana and Idaho – are also benefiting. Clean energy investments included in the Inflation Reduction Act would drive more job growth in those states and others.
• Clean vehicles were the big story in 2022. Jobs building electric vehicles grew by a dramatic 26 percent. Many Republican-led states, including Georgia, Kentucky, Texas and Tennessee, benefited greatly from expansions of EV and other clean transportation manufacturers, and also would benefit from electric vehicle tax credits included in the Inflation Reduction Act.
• Small businesses, the backbone of America’s economy, continue to employ the majority of the clean energy workforce. About 90 percent of all clean energy jobs were at companies that employed fewer than 100 workers.

Despite the strong job growth in 2021, uncertainty around federal policy cast a pall over the industry and job growth at the beginning of 2022. New clean energy project installations declined by 55 percent in the second quarter of 2022 alone, according to the American Clean Power Association, putting future job growth at risk.

However, with promising climate and clean energy investments and tax credits moving again in Congress in the summer, and the Biden administration stepping up its efforts to expand clean energy and cut carbon pollution, the second half of 2022 was looking brighter for continued strong growth in clean energy jobs.

2022 Clean Energy Employment Toplines