Estimating the spatial economic and environmental impact of planned offshore wind energy in the USA using Environmentally Extended Multiregional Input-Output analysis

TL;DR

This paper presents a comprehensive multiregional analysis of the economic and environmental impacts of planned offshore wind projects in the US, integrating investment, supply chain emissions, and spillover effects to inform sustainable energy development.

Contribution

It develops a novel framework combining ORBIT and a multiregional input-output model to assess spatial impacts of offshore wind, including supply chain emissions and economic spillovers.

Findings

Projects require $16.3 billion investment and generate $27.6 billion economic impacts.

States with active energy generation are most affected environmentally and economically.

Projects offset construction emissions in less than a year through decarbonization efforts.

Abstract

There is a projected increase in offshore wind energy generation in the United States over the next three decades, driven by legislative commitments and government funding. Like other renewable technologies, the construction of offshore wind farms has environmental impacts and spillover effects that must be assessed. Developing offshore wind as a reliable domestic energy source requires a multiregional analysis of economic and environmental effects of constructing projects along lakefronts and coastal regions. Although no commercial offshore wind farms currently operate in the United States, seven states have announced capacity commitments exceeding 28 gigawatts by 2035. This study evaluates the spatial economic and environmental impacts of planned projects by linking the National Renewable Energy Laboratory Offshore Renewables Balance-of-system Installation Tool (ORBIT) with a multiregional input-output model of the U.S. economy developed in the Virtual Industrial Ecology Lab. ORBIT provides capital investment requirements for installation, which are combined with the model to estimate economic spillover effects. Environmental impacts are assessed using a newly developed multiregional greenhouse gas emissions dataset for the U.S. to capture supply chain emissions of offshore wind construction. The five projects analyzed require 16.3 billion dollars in capital investment and generate 27.6 billion dollars in direct and indirect economic impacts across the country. Emissions results show that states active in energy generation are most affected, but impacts can be reduced by decarbonizing the grid. A carbon payback analysis indicates the projects offset construction-phase emissions in less than a year. The framework highlights which states experience the greatest spillover effects in terms of emissions and economic activity required to support offshore wind expansion.