Anirban Basu: Maryland Must Preserve Its First-Mover Status on Offshore Wind
By Anirban Basu
The writer is chairman and CEO of Sage Policy Group Inc. in Baltimore.
Maryland has enjoyed a burst of good news regarding its offshore wind economy in recent weeks, but one story the state’s policymakers should follow didn’t take place in Maryland.
It took place more than 200 miles south in Portsmouth, Va., where Gov. Ralph Northam announced that renewable energy powerhouse Siemens Gamesa will construct America’s first offshore wind turbine blade facility, creating 310 new jobs in the commonwealth and $200 million in local investment.
Why should Maryland policymakers regard what happens in southern Virginia? Because it demonstrates how much our southern neighbor and other coastal states will compete for the very offshore wind jobs that Maryland covets.
To be clear, Maryland has a head start on Virginia — for now. We have awarded 390 megawatts of offshore wind projects — enough to power 120,000 homes — while Virginia has authorized just 8 megawatts to date.
We want and need to maintain that advantage. The emerging offshore wind industry presents a $109 billion business opportunity in the U.S. thanks to its ability to diminish pollution, promote energy independence and revitalize American manufacturing. Regional bragging rights and new jobs for constituents — not to mention tens of millions in new tax revenue — are too enticing for Virginia and other coastal competitors to ignore.
For decades, Maryland wisely focused on recruiting and growing companies in industries of the future — cyber and IT, life sciences and aerospace. It worked, with Maryland consistently ranked as one of America’s most innovative economies and as an R&D leader.
But markets are constantly evolving. To preserve our first-mover status in offshore wind, state and local leaders must put the industry on their strategic priority list, or we could pay an economic price for decades to come.
Maryland’s first-mover status in offshore wind has already paid significant dividends. Offshore wind developer Ørsted, the world’s most sustainable energy company three years running, has invested heavily in growing Maryland’s offshore wind supply chain as part of its Skipjack Wind project. They recently partnered with minority-owned Crystal Steel to manufacture nearly $70 million in offshore wind steel parts on the Eastern Shore, and are opening a zero-emissions, $200 million operations and maintenance facility in Ocean City.
They’ve also announced proposals to bring GE Renewables and Hellenic Cables to Maryland to establish new manufacturing centers, good for another 500 jobs. Recruiting one industry leader begets others. That dynamic should be extended to the extent possible in Maryland.
Maryland’s other offshore wind developer, US Wind, has pledged up to $150 million to develop Sparrows Point Steel at Tradepoint Atlantic, Maryland’s first manufacturing facility developed to create offshore wind foundations. The company is also hiring executives focused exclusively on local minority business outreach.
So, how can Maryland preserve this first-mover status and its reputation as an innovator and leader in this emerging American industry?
First, the Maryland Public Service Commission must decide whether to award a second round of offshore wind projects this month. Ørsted and US Wind have proposed to develop an additional 1,800 megawatts of new offshore wind energy and are pledging to collectively spend nearly $1 billion in Maryland.
The commission can either award both projects, one project or no projects. Regardless, it’s a highly anticipated decision. Environmental advocates, clean energy developers, investors, steel manufacturers and labor unions eagerly await their decisions – decisions that will also send signals regarding Maryland’s competitive stance to rivals Virginia, New Jersey, Massachusetts, New York and Rhode Island among others.
Second, Maryland’s state and local economic development leaders would be wise to develop their own offshore wind supply chain growth strategies. Awarding offshore wind projects is the start of the business recruitment process, not the end.
A diverse supply chain must be organized to construct these projects, one that encompasses general contractors, specialty trade contractors, manufacturers, civil engineers, the maritime industry, safety inspectors and more. To develop America’s offshore wind supply chain, let’s first engage Maryland businesses like Crystal Steel and our own workforce, whether these workers hail from Baltimore, the Eastern Shore or other parts of our state.
Maryland can be proud of the leading role it has played thus far in bringing the offshore wind economy to America. But our leadership status is imperiled and can quickly be reversed. An informed decision by the Public Service Commission combined with supportive economic development will demonstrate to the nation and the world that Maryland means business.