The COVID-19 pandemic has shocked the global energy sector, forcing projects to suspend work to comply with social distancing regulations, challenging the investment conditions of markets bracing for economic recession and slashing power demand by up to 10% in some regions in 2020. The size of that decline is around seven times greater than during the 2008-2009 global financial crisis (according to the IEA) and has hit demand for oil, natural gas and coal the hardest.
But renewable energy will see an overall increase in its share of global power generation this year, due to its cost-competitiveness and priority dispatch in many markets. And the offshore wind sector, with longer project development timelines, will largely be shielded from the short-term supply chain disruptions which impacted project execution in onshore markets across the world. In 2020, the wind capacity lost to the pandemic is estimated by GWEC Market Intelligence at around 15 gigawatts – most of the downgrade will affect onshore wind power, with volume shifting to come online by 2021 instead.
The pandemic has highlighted the opportunity to make wind power a cornerstone of economic growth and recovery packages. By mid-2020, as lights around the world flickered back on and assembly lines restarted, global carbon emissions have already sharply rebounded. It is critical for the health, welfare and prosperity of the global community that the clean energy transition becomes a core component of economic stimulus and growth packages. Studies show that investing in renewables will have a multiplier effect on economic growth: Rs. 50 spent to advance the global energy transition returns Rs. 200-600, according to IRENA, while clean energy infrastructure construction generates twice as many jobs as fossil fuel projects.
Offshore wind power for green recovery
Offshore wind offers compound value for investment, with high capacity factors and average global costs declining more than 50% over the last decade. In decarbonisation terms, 1 gigawatt of offshore wind power avoids more than 3.5 metric tonne of CO2 – giving it more potential for carbon avoidance as a technology to displace fossil fuels than even onshore wind, solar, hydro or efficient gas power. Keeping global warming within 1.5-2 degrees of pre-industrial levels will require at least 100 gigawatts of new onshore and offshore wind capacity to be installed on an annual basis through 2030, with the accompanying scale-up of investment.
The Ministry of Renewable Energy (MNRE) has plans to generate 5,000 megawatts of offshore wind by 2022, and 30,000 megawatts by 2030. NTPC and ONGC have signed an MoU (memorandum of understanding) to explore offshore wind and other renewable energy projects in India and overseas. Increasing investment to undertake modernisation of grid and transmission infrastructure will also be key to integrating large volumes of offshore wind.
Millions of jobs on floating farms
At a time when the government is considering maximum impact per rupee of economic stimulus, it is worth highlighting that offshore wind farms have greater labour requirements than onshore wind farms, due to more complex construction, assembly and installation activities. Offshore wind power offers a range of job opportunities across the value chain – from project planning and financing to manufacturing and transport to construction and operations and maintenance (O&M).
A 2020 study by the American Wind Energy Association found that the sector offers “good, well-paying jobs requiring a diverse technical workforce spanning an estimated 74 occupations… [including] electricians, welders, turbine technicians, longshoremen, truck drivers, crane operators, ironworkers, pipe-fitters, pile drivers, engineers, mechanics, scientists, and offshore equipment and vessel operators.”
Based on data from IRENA, gathered during a 2018 study of nearly 30 stakeholders, GWEC estimates that 17.3 direct jobs (defined as one year of full-time employment for one person) are created per megawatt of generation capacity over the 25-year lifetime of an offshore wind project. With nearly 51 gigawatts of new offshore wind capacity forecast to be installed worldwide by 2024, that equals nearly 900,000 jobs in offshore wind created over the next five years – a figure which can only increase if offshore wind deployment scales up.
For near-term local employment, a study by GWEC, Global Wind Organisation and Renewables Consulting Group found that 2.5 persons were required to construct and install 1 megawatt of offshore wind – an indication of potential job creation for already licensed projects. Once the wind farm is connected, jobs in operations and maintenance (O&M) last over the lifetime of the project – roughly 25 years for offshore wind. O&M spans a variety of needs, from contract management to wind turbine maintenance to offshore logistics. As well, remote automated control is increasingly employed in O&M, via a SCADA system, radio telemetry and artificial intelligence applications. These areas require highly skilled workers with a background in data science, mechanical and computer engineering and telecommunications.
Maximising local economic activity will require policymakers to make strategic choices on how existing workers can be leveraged for high-growth areas. Where possible, re-skilling offshore oil and gas workers for the growing wind sector should be a priority to encourage low-carbon economic growth and competitiveness. This is also a fair response to labour market disruptions from the energy transition and pandemic, including dislocation of jobs for offshore oil and gas workers.
Outside of manufacturing turbine components, offshore wind generates jobs in the manufacturing of steel for foundations, substations and installation vessels, sub-sea cables to evacuate electricity from offshore farms to onshore grids and trucks and vessels for the transport of equipment and workers. All these areas can leverage the capabilities and supply chains of the offshore oil and gas sector.
Potential short-term investment areas to support a just and inclusive transition include targeted education and training schemes, industrial upgrades and promotion of public-private partnerships. Long-term investment areas include supplier development programmes and national roadmaps to develop industrial clusters in strategic areas of need.