Local economic impacts of wind power deployment in Denmark

Abstract

An argument sometimes used to support renewable energy is that it may contribute to job creation. On the other hand, these technologies often face local opposition. On the case of Denmark, the country with the longest experience with wind power, we examine whether the installation of new turbines had local economic benefits. We use a quasi-experimental set-up and exploit time and regional variations at the municipal level. We find that the deployment of wind power contributed to the increase in personal income for entrepreneurs and some retirees. As municipalities received payments from wind investors ahead of the construction, the new wind revenues were followed by increases in local public spending. Regarding employment, we find very minor effects in some sectors but the aggregate local employment does not change significantly