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Marine Scotland: Economic Assessment of Short Term Options for Offshore Wind Energy in Scottish Territorial Waters: Costs and Benefits to Other Marine Users and Interests

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5. Assessment of Costs and Benefits to Other Marine Users

5.1 Introduction

This section provides estimates of the costs and benefits over 50 years from 2011 to 2060 that may be experienced by different marine users and interests in relation to the various implementation scenarios

5.2 Assessment of Costs and Benefits to Other Marine Users and Interests

A number of marine users and interests have been identified as potentially incurring additional costs associated with implementation of the Plan scenarios including the commercial fishing, shipping, recreational boating, recreational angling and tourism sectors.

Developers and operators of offshore wind farms may also incur some additional costs to mitigate some potential impacts on other marine users. These include costs associated with implementing solutions to maintain navigational safety (e.g. appropriate buoyage of offshore wind farm arrays) and costs associated with possible modifications and enhancement to aviation radar systems. It has been assumed that these are included within the costs of offshore wind farm construction and operation. The scale of such costs relative to the overall investment in offshore wind is estimated to be very small.

While some potential benefits have also been identified, these are likely to be small in terms of value and not significant in the context of the Plan as a whole. The extent to which such benefits might be realised remains very uncertain and it has not been possible to quantify them.

Table 37 presents a summary of estimated annual costs (undiscounted) for those sectors that are considered likely to incur costs as a result of short-term option development. The total annual costs range from £0.34m in the low impact scenario to £8.28m in the high impact scenario. The highest estimated costs are associated with commercial fisheries, shipping and ports, recreational angling and tourism sectors which are all broadly of a similar magnitude. In the high impact scenario, approximately 60% of the high impact scenario costs are estimated to occur in West Region, primarily related to potential cost impacts on tourism.

Table 37. Summary of estimated costs to other marine users (£m per annum undiscounted)

North East

East

South West

West

Total

Commercial Fisheries 1

£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-£0.003m

£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

Social Impacts

Not quantified

Not quantified

Not quantified

Not quantified

-

Total Quantified Costs

£0.07m-£0.13m

£0.17m-£2.32m

£0.02m-£0.87m

£0.08m-£4.96m

£0.34m-£8.28m

1 NB: low costs only apply for 5 years following construction; high costs apply for full plan period.

The total discounted costs to other marine users are presented in Table 38, ranging from £1.4m in the low impact scenario up to £168.7m in the high impact scenario. This large range reflects the available evidence base, the length of the appraisal period and current uncertainties about the extent of impacts, particularly in advance of detailed project-level assessments.

Table 38. Summary of estimated costs to other marine users (£m discounted)

Sector

North East

East

South West

West

Total

Commercial Fisheries

£0.3m-£2.6m

£0.7m-£15.4m

£0.1m-£1.1m

£0.3m-£14.4m

£1.4m-£33.5m

Aquaculture

-

-

-

-

-

Shipping and Ports

-

£0m-£31.4m

£0m-£0.2m

£0m-£0.6m

£0m-£32.2m

Aviation

-

-

-

-

-

Wave and Tidal Energy Development

-

-

-

-

-

Cables and Pipelines

-

-

-

-

-

Recreational Boating

£0m-£0.1m

£0m-£0.3m

£0m-£0.2m

£0m-£0.2m

£0m-£0.8m

Recreational Angling

-

-

£0m-£7.9m

£0m-£16.6m

£0m-£24.5m

Surfing, Windsurfing and Kayaking

-

-

-

-

-

Tourism

-

-

£0m-£6.9m

£0m-£70.8m

£0m-£77.7m

Social Impacts

Not quantified

Not quantified

Not quantified

Not quantified

-

Total Quantified Costs

£0.3m-£2.7m

£0.7m-£47.1m

£0.1m -£16.3m

£0.3m-£102.6m

£1.4m-£168.7m

Under the high impact scenario, the largest costs are estimated to relate to reductions in tourism expenditure, although commercial fisheries, shipping and ports, and recreational angling sectors also incur substantial costs. Approximately 61% of the costs are estimated to fall in West Region with relatively low costs associated with the single short-term development option in North-East Region.

While the costs to other marine users may be relatively small at the national and regional levels, they may still be significant to individual sectors and stakeholders locally.

5.3 Assessment of Employment Impacts

The cost impacts on other marine users have the potential to give rise to employment impacts for some, but not all, affected sectors. For example, cost impacts to the shipping and recreational boating sectors relate to an increase in operating costs, particularly fuel costs, and these would not be expected to give rise to employment impacts unless they resulted in a cessation of the activity. In both instances, the additional costs are considered to be minor relative to overall operating costs. For example a deviation of a few kilometres for a ship navigating across the North Sea is likely to represent only 1-2% of total journey length. On this basis, the study has assumed that there will be no employment impacts for these sectors.

However, for commercial fisheries, recreational angling and tourism, the cost impacts could give rise to employment impacts as a result of reduced expenditure (recreational angling tourism) affecting the income of businesses supplying these services or as a result of reduced income for fishermen. Many of the businesses in these sectors are small and may be susceptible to losses of revenue.

Isolating the costs identified in Table 37 above and applying simple economic multipliers representing commercial fisheries, tourism and recreational sea angling, it is estimated that around 140 jobs may no longer be supported in these sectors by year 6 in the high impact scenario, remaining at this level throughout the operating period (Table 39). This estimate is subject to considerable uncertainty, as discussed in Section 5.6.

In the high impact scenario, around 70% of the affected jobs are in Tourism, and around 14% are in Commercial Fisheries. Around 80% of employment impacts per annum are estimated to occur in West Region. These impacts are substantially lower in the medium and low impact scenarios.

Table 39. Employment impacts of the three scenarios on commercial fisheries, recreational angling and tourism sectors

Scenario

Maximum Gross No. Jobs Lost/Not Supported

Number

Year

High Impact

140

6

Medium Impact

26

8

Low Impact

4

6

The reduction in employment opportunity can be compared with data on the total number of employees in these sectors, from Section 3 of this report. This indicates a total of around 5,000 people employed in fishing in Scotland, just over 3,000 in sea angling and over 200,000 in tourism as a whole, with around 4,400 of these in marine and coastal wildlife tourism. The numbers of jobs indicated in Table 39 are a small proportion of these totals, but could still be significant locally.

5.4 Social Costs and Benefits

A range of costs and benefits may be experienced by wider society. The creation of jobs has the potential to provide important societal benefits in all Regions and at a national level. The contribution to tackling climate change will also provide important benefits at national and international scale. The size of these social benefits would be expected to vary in accordance with the scale of implementation of the Plan and the level of retention rates.

There is currently a high level of uncertainty about the costs to society associated with Plan implementation owing to the difficulties in quantifying social impacts. Some social costs may arise in South West and West Regions. Key issues relate to the impact of development on visual amenity. There are also stakeholder concerns that the scale of development overall would undermine some of the essential qualities of these Regions, including their wild and isolated character. Other specific concerns relate to possible impacts associated with shadow flicker, impacts on TV reception, infrastructure provision, health impacts and the effects on property prices and housing availability.

5.5 Environmental Costs and Benefits

The SEA Environmental Report identifies the potentially significant environmental effects associated with Plan implementation, taking account of mitigation measures. The key beneficial effect is the contribution to reducing carbon emissions. The most significant negative effects relate to visual impacts in West Region and South-West Region, although a range of other minor negative impacts may also occur. Partial implementation of the Plan under the low impact scenario would be expected to lead to a reduced visual impact in West Region, but with a corresponding decrease in carbon savings.

5.6 Data Gaps, Limitations and Uncertainties

In seeking to estimate future costs and benefits associated with the three scenarios, there are a large number of data gaps, limitations and uncertainties. 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. While the study has sought to accommodate many of the uncertainties through the use of alternative scenarios, the estimates will be influenced by the nature of the current evidence base, and the assumptions that have necessarily been applied to assess potential impacts over the potential lifespan of offshore wind developments.

5.6.1 Data Gaps and Limitations of Data

The estimates of costs and benefits to other marine users have been based on existing available data and evidence. National and regional data have been used, reflecting the nature of the study. However, more fine grained analysis would require site-specific data. The inherent difficulties in estimating future levels of activities and their value are also recognised.

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 national and regional spatial data and more site specific information is required to develop more accurate assessments of potential displacement, for example:

  • Fish spawning and nursery ground data are in the process of being revised, but at present are over 10 years old;
  • Fisheries analysis could be improved if more detailed data was used - e.g. position data on <15 metre vessels which is currently lacking, number and type of boats visiting short term option development sites, and the total landings of fish and shellfish taken from these sites; and
  • The methodology used to estimate the economic impact on the commercial fisheries sector while appropriate for providing an indication of regional scale impacts is not adequate for estimating the cost impacts at site level. The preferred method (as recommended by Cefas) for site level assessments uses accurate estimates of the numbers of boats from all local ports which visit the area in question, by gear type, and either the proportion of their year that they spend there, or the proportion of their annual income that they derive from it.

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.

The spatial scale at which tourism data was available to the study was relatively coarse,

reducing the sensitivity of the assessment. Data at a more disaggregated level would facilitate more accurate assessments of cost impacts. There is 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 is a paucity of 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.

The study has not sought to 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.

5.6.2 Uncertainties

There are high levels of uncertainty concerning potential cost impacts to other marine users, including commercial fisheries, tourism and recreational boating.

Accurate quantification of fisheries impacts is recognised as being challenging, particularly because of potential cumulative effects on fisheries activity from other types of marine development, the establishment of a Marine Protected Area network and ongoing reform of the Common Fisheries Policy. Owing to the limited data available to the study the cost estimates only provide a first order assessment of impact, although the scenarios are considered to reflect the range of potential cost impacts in each region.

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.

Similar high levels of uncertainty apply to the cost estimates for the recreational boating sector. While experiences elsewhere indicate that navigation risks for recreational vessels transiting offshore wind farm arrays are not significant, strong concerns remain amongst local sailing communities in some Regions.