Offshore Wind Energy leads to job creation and economic benefits for Ontario
December 10, 2010 by Mary Del
The development and operation of offshore wind energy in Ontario could, between 2013 and 2026, create an average of 3,900 to 4,400 jobs per year during the construction phase. It would also produce peak employment of 600 permanent positions in the operations and maintenance of offshore wind turbines, according to a Conference Board of Canada report assessing the potential contribution of offshore wind generation to the province’s electricity supply, employment and economic activity.
These outcomes are based on reaching 2,000 megawatts (MW) of generation capacity over 15 years.
The emergence of such an industry would add between $4.8 and $5.5 billion to Ontario’s economy during the 2013-2026 period, according to the report.
Ontario has made a long-term commitment to renewable electricity, in part to eliminate generation from coal-fired plants. The government’s Feed-in-Tariff (FIT) program has attracted the interest of the global wind power industry. Offshore wind is one of the renewable generation sources permitted in the FIT program, which offers long-term contracts at guaranteed prices for qualifying projects.
"An offshore wind industry in Ontario – one that develops enough projects to be sustainable in the longer term – would create both short-term construction employment and permanent green jobs in the operations phase," said Len Coad, director, Environment, Energy and Technology Policy, The Conference Board of Canada. "Should development progress as anticipated, it is likely that new industries will develop in the province to service the needs of the growing sector."
The study, which was financed by Vestas Offshore A/S, quantifies the combined direct, indirect and induced economic effects on economic indicators, such as real gross domestic product (GDP), employment, income and government revenues.
The analysis finds that, over the 2013 to 2026 period, the development of Ontario’s offshore wind industry would lead to a cumulative total of $10.044 billion in real capital investment and operations spending.
The contributions to GDP identified in the study are based on the share of local procurement, which is required to be a minimum of 50 percent under the FIT program. In the base case scenario of 55 percent being sourced locally, $4.8 billion is added to the Ontario economy; under a scenario where 63 percent of inputs come from local procurement, $5.5 billion in real GDP is generated.
In its analysis, the Conference Board assumes that seven projects in Ontario would add 2,000 MW of offshore wind capacity by 2026 (which is 5.7 percent of the total current generating capacity in Ontario of 35,000 MW). This would comprise about 20 percent of the renewable energy target announced in the Ontario government’s recently announced Long Term Energy Plan; the plan calls for renewable capacity from wind, solar and bioenergy to rise from 1,657 MW this year to 10,700 MW in 2018.
The potential offshore wind projects identified by the Conference Board study would contribute 1,014 MW of that growth in renewable capacity by 2018, plus an additional 986 MW in the longer term.
There are currently no offshore wind farms in operation or under construction in North America. Two major Ontario projects – both in Lake Ontario near Kingston – are progressing toward implementation, which together would add 714 MW of capacity.
The report, Employment and Economic Impacts of Ontario’s Future Offshore Wind Power Industry, is available at www.e-library.ca.