The economic and environmental impacts of UK offshore wind development: the importance of local content

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Abstract

We explore, through simulation of a purpose-built Input-Output model of the UK, the economic and emissions impacts of the likely future development of the UK's offshore wind sector, with a particular emphasis on the importance of local content. We explore six scenarios, including two illustrative simulations of the potential impact of Brexit on local content. We find that future offshore wind development does indeed generate a policy “double dividend” in the form of simultaneous and substantial reductions in cumulative emissions, which in each case exceed a year of the UK's total emissions, and improvements in economic activity (of nearly £30 billion cumulative increase in value-added when the 60% target for local content is achieved). It is also the case that, as anticipated, the scale of the economic stimulus arising from offshore wind development is directly and strongly related to the extent of local content. Future work could extend the modelling to relax the supply side assumptions of input-output modelling, disaggregate the analysis by regions and households to allow assessment of the impacts on the distribution of both economic activity across regions and income among household quintiles.
Original languageEnglish
Article number117436
Number of pages32
JournalEnergy
Volume199
Early online date26 Mar 2020
DOIs
Publication statusPublished - 15 May 2020

Keywords

  • low carbon economy
  • industrial strategy
  • supply chain
  • offshore wind
  • economic impact
  • input-output analysis
  • Brexit

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