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Blue Seas - Green Energy: A Sectoral Marine Plan for Offshore Wind Energy in Scottish Territorial Waters - Part B Post Adoption Statement

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Background

B4. SOCIO-ECONOMIC ASSESSMENT

B4.1 Marine Scotland responded to the views that came forward in consultation workshops and responses and commissioned consultants to carry out an initial, high-level and strategic socio-economic assessment of the Draft Plan. This study, entitled the Economic Assessment of Short Term Options for Offshore Wind in Scottish Territorial Waters, focused on the impacts of the Short Term options at national and regional levels. As the study focused on high-level strategic impacts, analyses of site-specific or local impacts were considered out of scope, as these would be more adequately addressed through project-level analyses.

B4.2 ABPMER, in association with SQW and Risk and Policy Analysis ( RPA), were appointed to undertake the assessment, and the work commenced in December 2010. The project was managed by Marine Scotland, with input from other areas of Scottish Government. A wider project advisory group was also established, involving national and regional stakeholders from the offshore wind, fishing, shipping, ports & harbours and tourism sectors, as well as key planning authorities. A significant level of consultation with key stakeholders was undertaken during the study to develop a better understanding of potential impacts and develop key assumptions.

B4.3 The study assessed the impact of short term option development in the North East, East, West, and South West regions of the Draft Plan. As no short term options had been identified in the North and North West regions, these areas were not considered within the analysis.

B4.4 The socio-economic assessment aimed to provide information and analysis on a range of relevant areas, and will be delivered in two constituent parts. The first part of the assessment considered the costs and benefits of the Draft Plan on different marine sectors (such as commercial fisheries, tourism, and shipping) at both national and regional levels. Potential social impacts were also considered, though these were not quantified within the analysis. The results of this part of the assessment (Part 1) are reported within this Post-Adoption Statement.

B4.5 The socio-economic assessment also aimed to provide a comparison of the economic and social benefits associated with the development of the short term options for offshore wind in Scottish Territorial Waters against any potential economic and social costs. In doing so, it would also consider the impact, in terms of Gross Value Added ( GVA) and employment, that the short term options could have on the regional economies affected, and on the wider Scottish economy. By its very nature, such analysis is complex and methodologically challenging. This analysis is being undertaken within the two-year review period allocated to the Plan.

B4.6 Potential environmental impacts and impacts on visual amenity associated with the short term options were considered with the SEA. Consequently, although any impacts that have emerged from the SEA have been noted within the project, valuation of these impacts was considered out of scope for the purposes of the socio-economic assessment. Consideration of different approaches for distributing revenues from the short term options was also considered to go beyond the scope of work.

Study Methodology

B4.7 Part 1 of the socio-economic assessment was informed by a range of evidence. These included published and unpublished data and reports, spatial data layers, and other specific information provided through stakeholder engagement. Stakeholder engagement took place via the project advisory group, and through additional direct contact. These evidence and data were used to develop a Baseline for marine sectors, and to estimate the potential national and regional impact of the short term options on marine sectors.

B4.8 The evaluation of costs and benefits for other marine sectors was undertaken using several steps. These were:

  • Identification of sectors potentially affected - this was based on a review of SEA Environmental Report consultation responses, wider information on the effects of offshore wind farm development on other marine users and a spatial analysis in GIS to identify potential interactions between the short term options and other marine users;
  • Evaluation of interactions - the nature of the interactions between the short term options and other marine users were evaluated to determine whether specific interactions were likely to have a significant effect on the other marine user. This evaluation took account of stakeholder views and the existing evidence base; and
  • Valuation (monetisation) of costs and benefits - where significant interactions were thought likely to occur, the costs and benefits to other marine users were estimated.

B4.9 For each marine sector, the evaluation of costs and benefits was undertaken through use of scenarios. These scenarios consisted of a High Impact scenario, a Medium Impact scenario, and a Low Impact scenario. The assumptions underpinning these scenarios for each marine sector were sector-specific. However, in broad terms, the High Impact scenario assumed that sectors' activities would be incompatible with the short term options in the areas where they interact, and therefore do not take place. The Medium Impact scenario assumed that aspects of the sectors' activities would be compatible with the short term options, or that appropriate mitigation measures could be put in place, which would allow some aspects of the sectors' activities to continue. The Low Impact scenario assumed that the short term options would have a limited significant impact on other marine sectors' activities. This may be as a result of activities being naturally compatible, through use of mitigation measures, or through reduced scale of development of short term options.

B4.10 Taken together, the scenarios provide a range of potential national and regional impacts of the short term options on other marine sectors. Costs and benefits were estimated over 50 years, which is an appraisal period consistent with the potential lifespan of offshore wind assets, and were discounted using discount rates drawn from HM Treasury's Green Book. However, it should be noted that these impacts are ex ante estimates. The quality of these estimates are determined by the available data and evidence.

What were the Broad Findings of Part 1 of the Socio-Economic Assessment?

B4.11 Using the evidence and methodology outlined in B4.7 and B4.8, the socio-economic assessment investigated what marine sectors could potentially be affected by development of the short term options. The results of this assessment are shown in Table B4.1:

Table B4.1: Assessment of Impacts on Other Marine Sectors16

Sector

Impact on Sector?

Nature of Impact

Regions Affected

Commercial Fisheries

v

Loss of revenues from displacement or cessation of fishing activity

North East, East, West, South West

Aquaculture

×

Shipping and Ports

v

Increased costs from additional steaming distances

East, West, South West

Aviation

×

Wave and Tidal Energy Development

×

Cables and Pipelines

×

Recreational Boating

v

Increased costs from additional steaming distances

North East, East, West, South West

Recreational Angling

v

Loss of expenditure on related activities from displacement or cessation of activity

West, South West

Surfing, Windsurfing and Kayaking

×

Tourism

v

Loss of expenditure from displacement or cessation of activity

West, South West

Social Impacts

v

Not quantified. Negative impacts as a result of impacts to existing economic activities; positive impacts as a result of offshore wind farm supply chain development

B4.12 This assessment identified that the short term options were likely to impact on Commercial Fisheries, Shipping & Ports, Recreational Boating, Recreational Angling and Tourism activities at regional and national levels. It was thought likely that Commercial Fisheries would be affected in each area where short term options were present, and that Shipping & Ports would be affected in each area barring the North East region. Tourism and Recreational Angling impacts were thought to be affected in West and South West regions. It was thought unlikely that there would be regional or national impacts on Aquaculture, Wave & Tidal Energy developments, Cables & Pipelines, or on Surfing, Windsurfing and Kayaking, due to the absence of significant spatial conflict between these activities and the short term options.

B4.13 The socio-economic assessment quantified the potential scale of the estimated impacts for the marine sectors potentially affected by the short term options. These costs are incurred once construction of the short term options begins, and continue to be incurred once they become operational. The range of estimated annual costs for each marine sector in each region resulting from the Low Impact to High Impact scenarios are shown in Table B4.2.

Table B4.2: Estimated annual costs to other marine users between Low and High Impact Scenarios (£m, Real Terms)17

Sector

North East

East

South West

West

Total

Commercial Fisheries

£0.07m - £0.13m

£0.17m - £0.76m

£0.02m - £0.06m

£0.08m - £0.70m

£0.34m - £1.65m

Shipping and Ports

-

£0m - £1.55m

£0m - £0.01m

£0m - £0.03m

£0m - £1.59m

Recreational Boating

£0m - £0.00m

£0m - £0.01m

£0m - £0.01m

£0m - £0.01m

£0m - £0.03m

Recreational Angling

-

-

£0m - £0.42m

£0m - £0.80m

£0m - £1.22m

Tourism

-

-

£0m - £0.37m

£0m - £3.42m

£0m - £3.79m

Total

£0.07m - £0.13m

£0.17m - £2.32m

£0.02m - £0.87m

£0.08m - £4.96m

£0.34m - £8.28m

B4.14 Costs are also assessed over the 50 year appraisal period, which reflects the impacts over the potential lifetime of the Short Term option developments. The range of total estimated values for each marine sector in each region resulting from the Low Impact to High Impact scenarios over the 50 year appraisal period are shown in Table B4.3.

Table B4.3: Estimated total costs to other marine users between Low and High Impact Scenarios (£m, discounted over 50 years, rounded to nearest £m)

Sector

North East

East

South West

West

Total

Commercial Fisheries

£0m - £3m

£1m - £15m

£0m - £1m

£0m - £14m

£1m - £34m

Shipping and Ports

-

£0m - £31m

£0m

£0m - £1m

£0m - £31m

Recreational Boating

£0m - £0m

£0m - £0m

£0m - £0m

£0m - £0m

£0m - £1m

Recreational Angling

-

-

£0m - £8m

£0m - £17m

£0m - £25m

Tourism

-

-

£0m - £7m

£0m - £71m

£0m - £78m

Total

£0m - £3m

£1m - £46m

£0m - £16m

£0m - £103m

£1m - £169m

B4.15 These findings illustrate the range of possible impacts across the scenarios, with the total value of the impacts varying from around £1 million over 50 years in the Low Impact scenario to around £169 million over 50 years in the High Impact scenario. The High Impact scenario is viewed as being an estimate of the 'worst-case' impact on other marine sectors. This analysis suggest that the overall impact of the short term options on other marine sectors over the 50 year appraisal period would be relatively small at the national scale. The largest impacts at a national scale were estimated to accrue to Tourism, Commercial Fisheries, and Shipping & Ports.

B4.16 The impacts are also relatively small at regional levels. Impacts also vary across regions, with the majority of estimated impacts accruing to West region. Commercial Fisheries impacts mainly accrued in West and East regions. Shipping & Ports impacts accrued mainly in East region, while Tourism impacts accrued mainly in West region.

B4.17 These impacts costs may also result in some employment opportunities being lost in the affected marine sectors, compared to what would have happened in the absence of the Short Term options. When the costs are isolated and applied to simple economic multipliers representing Commercial Fisheries, Tourism and Recreational Sea Angling, it is estimated that around 4 jobs per year in the Low Impact Scenario and up to 140 jobs per year in the High Impact Scenario are no longer supported in these sectors compared to what was projected to have happened in the absence of the Short Term options. Around 70 per cent of these jobs are in Tourism, and around 14 per cent are in Commercial Fisheries. Around 80 per cent of employment impacts per annum occur in West region. These impacts are substantially lower in the Medium Impact and Low Impact scenarios.

B4.18 The magnitude of the estimates vary across scenarios, as they are heavily influenced by the assumptions used to determine them. In the High Impact scenario, it is assumed that a substantial loss of tourism revenue takes place each year from lost resort development investment in the West. However, this does not occur in the Medium or Low Impact scenarios. The High Impact scenario also assumes that all Commercial Fisheries are excluded from fishing in Short Term option areas, whereas this assumption is relaxed for static gear vessels in the Medium and Low Impact scenarios. The High Impact scenario assumes that commercial shipping must navigate around the Short term option areas, while the Medium and Low Impact scenarios assume that flexibility around site footprints can allow for impacts on navigation to be mitigated. As the most restrictive assumptions in the analysis are present in the High Impact scenario, this should be viewed as an estimate of the 'worst case' impact on other marine sectors.

B4.19 However, although these impacts are relatively small at national and regional levels, they may still be significant at local levels.

Data Gaps

B4.20 As with all socio-economic assessments, the establishment of a baseline involves a degree of extrapolation and projection of data from recent years into future years. Consequently, it may not adequately reflect potential future trends in marine sectors' activities. Such inaccuracies will become more pronounced as the time period for analysis lengthens. Furthermore, the estimates of costs and benefits to other marine users have been based on data available within the short time scales for the study. Estimates of the costs of mitigation measures for aviation and navigation impacts are particularly uncertain, pending more detailed project-level assessments of aviation and navigation risks. Similarly, estimates of commercial fisheries impacts have necessarily been based on high-level spatial data and more site specific information is required to develop more accurate assessments of potential displacement.

B4.21 Furthermore, actual impacts to the commercial fishing sector will be sensitive to the outcome of discussions between site developers and the fisheries representatives in terms of which types of activity may be allowed to continue within arrays and along cable routes.

B4.22 The spatial scale at which tourism data was available to the study was relatively coarse, reducing the accuracy of the assessment. Data at a more disaggregated level would facilitate more accurate assessments of cost impacts. While some information exists in relation to the effects on tourism of onshore and offshore wind farms elsewhere in Europe, the circumstances are not fully comparable to those applying in some of the short-term option areas. Furthermore, it is difficult to define an appropriate zone of influence for offshore wind farms and thus to determine the size of the area over which economic impacts might be experienced. Further research on the impacts of offshore wind farms on tourism, particularly where these are located relatively close inshore is required.

B4.23 There was a lack of data on the numbers and types of vessels using recreational sailing routes. This proved a key limitation in seeking to quantify the cost impacts. Similarly there are limited publicly available data on commercial shipping data. Improved availability of AIS data would significantly ease the task of estimating impacts to commercial shipping and improve the reliability of estimated potential cost impacts.

B4.24 The socio-economic assessment did not quantify social impacts owing to the difficulties of valuing such impacts. However, the importance of social impacts has been highlighted by a considerable number of stakeholders, particularly in West and South West Regions, and further data collection and assessment of these potential impacts is needed to better inform decision-making at project level.

B4.25 Work on Part 2 of the socio-economic assessment is ongoing. This work, which is complex and methodologically challenging, is being undertaken within the two-year review period allocated to the Plan.