Examining the potential economic impacts of Scottish offshore wind developments

Student thesis: Doctoral Thesis

Abstract

Since the turn of the century there has been significant change in Scottish energy policy, with climate change mitigation being a key objective. To meet policy objectives the Scottish Government has set out a wide range of targets with the most ambitious being to meet the equivalent to 100% of gross electricity demand from renewables by 2020. With Scotland having the highest offshore wind resource in Europe (25% of the total) it is expected that offshore wind will be important in reaching this target, and there are currently several wind farms in development. Recently there has been a focus on the possible economic development resulting from large scale renewable projects. This is the primary motivation of this thesis – examining the potential economic impacts arising from the development of Scottish offshore energy wind capacity.In this thesis there are six chapters, with the first being an introduction to Scottish energy policy; the evolution to the electricity network, and wind energy in Scotland. The purpose of this chapter is to provide the reader with the necessary background to understand the context of this thesis.Chapter 2 details the development of an Electricity Satellite Account (ElSA) framework, from which we create an ElSA for Scotland for 2012. Satellite accounts have been used extensively to improve the System of National Accounts (SNA) by extending the analysis of sectors which are not well represented in that framework (with the most common satellite account being for tourism). In the standard SNA framework the electricity sector is represented by a single sector which incorporates generation, transmission, distribution and sales, raising a number of problems for meaningful economic analysis. The development of an ElSA allows a better understanding of the interactions between electricity generation and consumption and the economy. This is the first attempt (to our knowledge) to develop an ElSA has been development and as such we take elements of the Tourism Satellite Account (TSA) framework and modify these to develop a satellite account for the electricity sector in Scotland.The development of an ElSA not only allows for a better understanding of the linkages between the electricity sector and the economy, it can be used to disaggregate the electricity sector within the IO tables – data which in turn feeds into a number of popular macroeconomic models. This is the focus of Chapter 3. The disaggregation of the electricity sector is not new endeavour, there are several examples of this being carried out. However the contributions of this chapter is that, using the ElSA information, we develop and apply a â€hybrid” methodology which accounts for the variations in electricity price. There are examples in the literature noting the problem disaggregating based on volume of electricity (Jones et al, 2010; Algrain et al 2014) and this is the first known attempted of accounting for the variation.In Chapter 4 the disaggregated IO table from Chapter 3 is used to create an IO model which is used to investigate the macroeconomic impacts from the development of offshore wind capacity in Scotland. Several different scenarios – single farm; planned capacity and future growth - are modelled in this chapter with particular attention paid to the local content (an increasingly important policy issue). The two contributions of this chapter are the investigation on the cumulative economic impacts of planned Scottish offshore wind developments and the impact of changes in local content.IO models have well known assumptions– most notably a passive supply side and fixed prices. In Chapter 5 we relax these assumptions by using a CGE model based on the AMOS framework with disaggregated electricity sector, which again uses the disaggregation from Chapter 3. This AMOS framework allows for the impacts of many more variables (comp
Date of Award1 Oct 2017
LanguageEnglish
Awarding Institution
  • University Of Strathclyde
SponsorsEPSRC (Engineering and Physical Sciences Research Council)
SupervisorGrant Allan (Supervisor) & Stuart McIntyre (Supervisor)

Cite this