Executive summary. This research report seeks to provide a systematic review of current literature (both academic and grey) on socio-economic impact assessment methodology and mitigation/enhancement methods. It includes academic, industry and government literature relating to OWF published over the 10 years to 2019. The review first considers impact assessment methodology, and then its application to Offshore Wind Farms (OWFs), for both economic and social impacts. There is then a specific examination of socio-economic impacts of OWFs, with particular reference to Scotland. The executive summary here briefly sets out the nature of socio-economic impacts and their assessment, and associated challenges and opportunities in relation to OWF development, especially in Scotland.
Nature of socio-economic impacts and their assessment: Socio-economic impacts can be summarised as the “people effects” of development actions. They cover a wide range of social and economic impacts and the boundaries are fuzzy between social and economic impacts. Economic impacts can range from the macro-impacts on a nation’s GNP to the impact on construction workers’ wage levels in a town adjacent to a project. Social impacts may include impacts on local demographics, livelihoods, housing, local services, and wellbeing and community cohesion. Socio-economic impact assessment seeks to identify the impacts of development actions on people, and who benefits and who loses; it can help to build the needs and voices of diverse groups in a community into project planning and decision-making. The consideration of the social and economic impacts of major developments has been the poor relation of impact assessment until the current century. However, it is now a much more important element in the assessment of the impacts of major projects. Evolving international guidance, standards and legislation on SIA stress the importance of maximizing opportunities for local content (i.e. jobs for local people and local procurement), and the necessity for a project to earn its ‘social licence to operate’ in the host community.
Assessing the economic impacts of OWFs – challenges and opportunities: OWF is a rapidly increasing energy sector and the UK is the global leader. Yet there is concern that the UK offshore wind sector has not sufficiently capitalised on its lead to secure local economic content, in terms of UK investment and UK jobs. Economic leakage is greatest for the construction (CAPEX) stage, with only on average about 20% of expenditure staying in the UK; but in contrast, around 70% of the operational (OPEX) stage stays in the UK. Whilst much of the offshore construction work will not be from local companies, there is more local potential with onshore work (e.g. sub-station connections; local port improvements) and operation and maintenance. The impacts of multiple OWFs developments can be cumulative, and can be a catalyst for port development and other supply chain activities (e.g. set down areas, assembly and, in some cases, fabrication facilities). A modelling trend that has evolved in the OWF sector over the last decade is the development of an Input–Output (I-O) approach to the prediction of economic impacts. However, this “top-down” approach does have some limitations. The focus of mitigation and enhancement is very much on the enhancement of local benefits, for example through developer support to maximise local supply chain benefits and local employment via training and recruitment policies. Monitoring of actual, rather than predicted local impacts, is essential for the advancement of the planning, assessment and management of economic benefits in the interests of the local community. Yet such monitoring has been very limited to date.
Assessing the social impacts of OWFs – challenges and opportunities: Methods to analyse social impacts, as well as mitigation and enhancement methods, are developing. There is increasing recognition of the need for both technical and participatory approaches, in order to
Literature Review on the Socio-economic Impacts of OWFs and their Assessment
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capture the complexity and nuances of potential social impacts on a given community or group of communities. Early community engagement is crucial, in order to lessen the impact in relation to fear and anxiety, which in turn has a positive effect on the social impacts of an offshore development. It is also important to ensure sustained engagement throughout the project’s lifetime, in order to mitigate or avoid longer-term social impacts. This review also demonstrates the importance of taking into consideration culturally meaningful aspects, such as the importance of seascape, which might have impacts on the community’s attitude and perception. Research indicates that OWF overall have a positive impact on well-being, motivated by beliefs about environmental impact, job creation and local economic growth. However, there can be opposition motivated by concerns over profitability, decreases in property values and impacts on wildlife. The host community generally sees mitigation and enhancement methods as positive. Research suggests that emphasising the community benefits, rather than benefits to individuals, will garner greater support for offshore wind developments. Overall, there is an emerging literature on the social impacts of OWFs, but there is a need for more work, particular in relation to potential impacts on the sense of community and belonging.
Socio-economic impacts of OWFs, with particular reference to Scotland: Scotland has great potential for renewable energy development, with an estimated 25% of all of Europe’s offshore wind and tidal potential. There is considerable government ambition for the industry at both UK and Scotland levels, with strong strategy positions and support initiatives, and in local authorities and other Scottish agencies. Yet the take-up of OWF projects in Scotland is currently low, compared with take-up for Scottish onshore wind and with English offshore wind. However, starting with the 588 MW Beatrice project, the number of major projects now in the pipeline could see Scottish offshore wind at least matching the 5GW capacity of Scottish onshore wind by the early/mid 2020s. Scotland is also pioneering innovation in the offshore wind industry, exemplified by the turbine size (8.4MW) and suction bucket technology for the Vattenfall Aberdeen project, and the Statoil floating Hywind project. Research on socio-economic impacts for offshore wind in Scotland identifies some impact issues and opportunities relating to: process (e.g. how to improve community participation), economy (eg the potential from the O&M stage), and social (e.g. on rural way of life), plus for other sectors, such as fishing. There is also the key issue of the importance of the provision of the required facilities needed at Scottish ports to support the offshore wind industry. However, there is growing good practice by developers such as SSE, Scottish Power and Vattenfall, who have promoted an array of measures to mitigate negative impacts and enhance positive impacts, especially on local employment and supply chain opportunities and with community benefits agreements
