Louisiana’s Gulf of Mexico region has long been dominated by the state’s offshore oil and gas sector, utilizing its ports, workforce, and expertise. However, Louisiana faces a critical juncture as the global offshore wind industry gains traction. With several offshore wind projects on the horizon in both state and federal waters along its coast, Louisiana has the opportunity to expand its energy industry into this growing sector.
Xodus Group conducted a comprehensive evaluation in collaboration with The Pew Charitable Trusts, Greater New Orleans Inc., the Southeastern Wind Coalition, the Center for Planning Excellence, and various stakeholders to assess its readiness for this transition. The objective was to determine Louisiana’s preparedness for offshore wind development in the Gulf of Mexico, along the US East Coast, and elsewhere.
Manufacturing:
Louisiana’s manufacturing sector holds significant potential to support offshore wind development, with over 100 fabrication and manufacturing assets capable of producing components for offshore wind projects. Shipbuilding, in particular, is a vital area of expertise, with opportunities to supply vessels and fabricate structures like jacket foundations and electrical service platforms.
Export Opportunity:
With over 30 projects along the US East Coast driving demand, Louisiana can seize a substantial portion of this export market while simultaneously building local capacity for future offshore wind development.
Offshore Services:
Louisiana’s offshore services sector, comprising approximately 175 companies with expertise in planning, installation, operations, and decommissioning for offshore oil and gas, can easily transition to supporting roles in offshore wind. The state’s experienced offshore workforce is well-equipped to upskill and contribute to offshore wind projects within Louisiana and the broader US market.
Ports & Marine Assets:
Port Fourchon and the Port of Lake Charles are undergoing upgrades to potentially serve as staging and marshaling ports for offshore wind projects. With additional investment in infrastructure, such as quayside assets and dredging, the ports can accommodate the significant components associated with offshore wind, positioning them to play crucial roles in supporting wind farm operations.
Transferable Skills:
Workers in marine transportation, offshore oil and gas, and advanced manufacturing sectors possess valuable experience and technical expertise that align favorably with offshore wind development. Approximately 71% of the existing workforce in these industries in Southeastern Louisiana has transferable skills suitable for supporting offshore wind projects.
Workforce Availability:
Over 60,000 workers in the state are employed in industries closely related to offshore wind. However, additional training and education programs are needed to address potential shortages and introduce workers to specialized manufacturing, installation, operations, and maintenance activities. Investing in training programs, particularly in diverse communities, is crucial for meeting workforce demands and supporting local manufacturing.
Regulatory Landscape:
Codifying offshore wind procurement targets into state law and allocating funding to support local capabilities are essential to increase confidence in the offshore wind industry. These actions will stimulate investment and support further infrastructure development in the Gulf of Mexico, enhancing Louisiana’s competitiveness in national export markets.
Incentives:
They are establishing additional incentives and complementing federal tax relief initiatives. Strategic development of incentive programs, leveraging existing cross-industry supports, and maximizing federal funds will enhance Louisiana’s attractiveness for offshore wind investment.
Innovation:
Leveraging local knowledge and expertise to support innovation in floating offshore wind and wind turbine technology tailored to extreme Gulf conditions, positioning Louisiana as a hub for operational excellence and thought leadership in the offshore wind sector.
State leaders have expressed support for offshore wind energy development, recognizing the chance to capitalize on Louisiana’s existing offshore energy skills and track record in this rapidly expanding sector. There is considerable potential to generate local economic benefits through job creation and industrial expansion supporting regional offshore wind projects. Louisiana’s commitment to green hydrogen further underscores the opportunity for offshore wind energy procurement, complementing efforts to decarbonize the state’s industrial processes.
On August 29, 2023, the Department of the Interior conducted the inaugural offshore wind energy auction for the Gulf of Mexico. RWE Offshore US Gulf, LLC emerged as the winner, securing the rights to develop a wind farm in a 102,480-acre area offshore Lake Charles with a bid of $5.6 million. This designated area holds the potential to generate approximately 1.24 gigawatts of offshore wind energy capacity, capable of powering nearly 435,400 homes with clean, renewable energy in Louisiana. Notably, the bid includes credits amounting to over $860,000 for investments in workforce training and domestic supply chain enhancement and $430,000 allocated for fisheries compensatory mitigation.
The analysis identified 458 unique companies with the potential to supply products or services in the offshore wind industry. Over 100 companies were identified with high or moderate applicability to offshore wind, suggesting they could support the sector with reskilling, retooling, or expanding existing operations.
The report highlighted companies with strong specialist expertise in technologies relevant to the offshore wind sector, a wealth of capability in supply vessel design and build services, and extensive experience in marine logistics. Louisiana’s supply chain demonstrates promising potential to meet the needs of the offshore wind industry and contribute to its growth.
As a recognized center for port infrastructure, maritime construction, and traditional energy production, Louisiana is well-positioned to diversify its economy and create new opportunities through renewable energy. This presents a chance for Louisiana to emerge as a leader in the offshore wind industry, leveraging its expertise to drive sustainable growth and economic development.
Additional state support and implementation of key recommendations are necessary to fully capitalize on Louisiana’s head start in this expanding sector.
