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The economic impacts of marine energy developments: A case study from Scotland

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  • Allan, G.J.
  • Lecca, P.
  • McGregor, P.G.
  • Swales, J.K.

Abstract

Delivering the ambitious renewable energy targets set by the Scottish Government will require significant expenditures. Plans have been set out to develop 1.6GW of marine (wave and tidal) energy capacity between 2010 and 2020 in the Pentland Firth and Orkney Waters area (off the north coast of Scotland) with construction costs estimated at £6 billion. This paper uses multi-sectoral economic models to explore the impact that these (temporary) expenditures could have on the Scottish economy. It is shown that the standard Input–Output (IO) modelling approach significantly overstates the employment and value added impacts compared to Computable General Equilibrium (CGE) methods—in which short-run scarcity of factors of production are explicitly modelled. CGE results (under myopic and forward-looking model specifications) produce smaller impacts during the timespan of expenditures but, unlike IO methods, identify non-trivial “legacy effects” after the expenditures cease.

Suggested Citation

  • Allan, G.J. & Lecca, P. & McGregor, P.G. & Swales, J.K., 2014. "The economic impacts of marine energy developments: A case study from Scotland," Marine Policy, Elsevier, vol. 43(C), pages 122-131.
    • Handle: RePEc:eee:marpol:v:43:y:2014:i:c:p:122-131
    DOI: 10.1016/j.marpol.2013.05.003
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    References listed on IDEAS

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    3. Zeyringer, Marianne & Fais, Birgit & Keppo, Ilkka & Price, James, 2018. "The potential of marine energy technologies in the UK – Evaluation from a systems perspective," Renewable Energy, Elsevier, vol. 115(C), pages 1281-1293.
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    5. Samuel Draycott & Iwona Szadkowska & Marta Silva & David M Ingram, 2018. "Assessing the Macro-Economic Benefit of Installing a Farm of Oscillating Water Columns in Scotland and Portugal," Energies, MDPI, vol. 11(10), pages 1-20, October.
    6. Hashemi, M. Reza & Grilli, Stéphan T. & Neill, Simon P., 2016. "A simplified method to estimate tidal current effects on the ocean wave power resource," Renewable Energy, Elsevier, vol. 96(PA), pages 257-269.
    7. Dalton, Gordon & Allan, Grant & Beaumont, Nicola & Georgakaki, Aliki & Hacking, Nick & Hooper, Tara & Kerr, Sandy & O’Hagan, Anne Marie & Reilly, Kieran & Ricci, Pierpaolo & Sheng, Wanan & Stallard, T, 2015. "Economic and socio-economic assessment methods for ocean renewable energy: Public and private perspectives," Renewable and Sustainable Energy Reviews, Elsevier, vol. 45(C), pages 850-878.
    8. Ruano-Chamorro, Cristina & Castilla, Juan Carlos & Gelcich, Stefan, 2018. "Human dimensions of marine hydrokinetic energies: Current knowledge and research gaps," Renewable and Sustainable Energy Reviews, Elsevier, vol. 82(P3), pages 1979-1989.
    9. Lewis, M. & Neill, S.P. & Robins, P.E. & Hashemi, M.R., 2015. "Resource assessment for future generations of tidal-stream energy arrays," Energy, Elsevier, vol. 83(C), pages 403-415.
    10. Mu, Yaqian & Cai, Wenjia & Evans, Samuel & Wang, Can & Roland-Holst, David, 2018. "Employment impacts of renewable energy policies in China: A decomposition analysis based on a CGE modeling framework," Applied Energy, Elsevier, vol. 210(C), pages 256-267.
    11. Connolly, Kevin, 2020. "The regional economic impacts of offshore wind energy developments in Scotland," Renewable Energy, Elsevier, vol. 160(C), pages 148-159.
    12. Segura, E. & Morales, R. & Somolinos, J.A. & López, A., 2017. "Techno-economic challenges of tidal energy conversion systems: Current status and trends," Renewable and Sustainable Energy Reviews, Elsevier, vol. 77(C), pages 536-550.
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    15. Corbelle-Rico, Eduardo & Sánchez-Fernández, Patricio & López-Iglesias, Edelmiro & Lago-Peñas, Santiago & Da-Rocha, José-María, 2022. "Putting land to work: An evaluation of the economic effects of recultivating abandoned farmland," Land Use Policy, Elsevier, vol. 112(C).
    16. Connolly, Kevin & Allan, Grant J & McIntyre, Stuart G, 2016. "The evolution of green jobs in Scotland: A hybrid approach," Energy Policy, Elsevier, vol. 88(C), pages 355-360.
    17. Fanning, Tim & Jones, Calvin & Munday, Max, 2014. "The regional employment returns from wave and tidal energy: A Welsh analysis," Energy, Elsevier, vol. 76(C), pages 958-966.
    18. Bianchi, Marco & Fernandez, Iratxe Fernandez, 2024. "A systematic methodology to assess local economic impacts of ocean renewable energy projects: Application to a tidal energy farm," Renewable Energy, Elsevier, vol. 221(C).
    19. Neill, Simon P. & Lewis, Matt J. & Hashemi, M. Reza & Slater, Emma & Lawrence, John & Spall, Steven A., 2014. "Inter-annual and inter-seasonal variability of the Orkney wave power resource," Applied Energy, Elsevier, vol. 132(C), pages 339-348.
    20. Allan, Grant & Comerford, David & Connolly, Kevin & McGregor, Peter & Ross, Andrew G., 2020. "The economic and environmental impacts of UK offshore wind development: The importance of local content," Energy, Elsevier, vol. 199(C).

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