Publication - Impact assessment

Offshore wind energy - draft sectoral marine plan: social and economic impact assessment

Published: 18 Dec 2019
Directorate:
Marine Scotland Directorate
Part of:
Energy, Marine and fisheries
ISBN:
9781839603792

A social and economic impact assessment to support development of the draft sectoral marine plan for offshore wind energy.

316 page PDF

4.9 MB

Contents
Offshore wind energy - draft sectoral marine plan: social and economic impact assessment
2 Approach to the Assessment

2 Approach to the Assessment

2.1 Introduction

2.1.1 The methodology for the assessment of social and economic impacts has built on similar previous studies[10],[11][12] and previous EIAs for offshore developments. It follows wider guidance on impact assessment including Scottish Government guidance on Business and Regulatory Impact Assessment[13] and the Green Book methodology[14].

2.1.2 The methodology described below covers:

  • Scenarios relating to future offshore wind development;
  • Defining relevant marine activities for inclusion in the assessment;
  • Establishing a baseline;
  • Outcome of scoping;
  • Assessment methodology;
  • Assessing negative economic impacts to marine activities;
  • Assessing positive economic impacts to marine activities;
  • Assessing social impacts on individuals, communities and society;
  • Assessing combined impacts.

2.1.3 The work has been taken forward working closely with the Project Board and SEIA Steering Group. Organisations represented on the Project Board and Steering Group are listed in Appendix A.

2.2 Scenarios Relating to Future Offshore Wind Development

2.2.1 The DPOs for offshore wind identify potential broad locations within which future arrays might be located. However, in order to provide a sufficient basis to carry out a quantitative socio-economic impact assessment, it is necessary to make assumptions about the potential scale (potential installed capacity), nature (the types of technologies) and timing of possible development within these DPOs. Possible socio-economic impacts associated with array export cables, also need to be taken into account where practicable.

2.2.2 Given the inherent uncertainty in seeking to predict the scale and timing of development, a number of scenarios were developed, primarily relating to different possible scales of development within the DPOs, so that these uncertainties could be explored. The impacts of these scenarios were then compared against the ‘do nothing’ option in seeking to estimate the potential positive and negative impacts associated with offshore wind development within the DPOs.

Developing Scenarios relating to the Potential Scale of Future Development

2.2.3 At a UK level, at the start of 2019, there were 7.9 gigawatts (GW) installed offshore wind capacity and around 23.9 GW of additional offshore wind with formal rights (at various stages of planning, consenting or construction).

2.2.4 Scotland currently has six operational offshore wind sites with a total capacity of over 900 MW: the Beatrice demonstrator project (two 5 MW turbines), the Beatrice offshore wind farm (588MW) (from mid-2019) the Hywind Scotland Pilot Park project (30 MW capacity), Robin Rigg (180 MW capacity), Levenmouth Demonstration Turbine (one 7 MW turbine), Kincardine floating turbine (2MW) and the European Offshore Wind Deployment Centre deployed 11 turbines, with a total capacity of 93 MW.

2.2.5 Within Scottish Territorial Waters there are currently plans to install up to a further 1.3 GW capacity of offshore wind in two further short-term option sites Inch Cape and Neart na Gaoithe), together with up to 4.15 GW capacity within two Round 3 sites in offshore waters — Moray Firth (1.7 GW) and Firth of Forth (2.45 GW). Currently Neart na Gaoithe, Moray East (Moray Firth) and Seagreen Phase 1 (Firth of Forth) have all obtained Contracts for Difference.

2.2.6 There are currently few long-term projections for potential future offshore wind development for the period covered by the draft Plan (up to 2050).

2.2.7 Key indications of potential future UK offshore wind capacity requirements include:

  • Offshore Wind Industry Council Sector Deal[15]: aiming for 30 GW UK installed capacity by 2030.
  • Committee on Climate Change 2018 Progress Report to Parliament[16]: considered scenarios of 28-34 GW UK offshore wind installed capacity by 2030.
  • National Grid Future Energy Scenarios[17]: estimated between 26–53 GW UK offshore wind installed capacity by 2050 in four different energy scenarios. These scenarios seek to take account of factors such as the electrification of transport and the potential role of interconnectors and electricity storage capacity.
  • The UK passed legislation in June 2019 committing it to net zero greenhouse gas emissions by 2050[18], and the Scottish Parliament passed the Climate Change Bill on 26 September 2019, committing Scotland to becoming a net-zero society by 2045;
  • In August 2019, The Crown Estate announced further leasing for 2017 project extension applications totalling 2.85 GW[19].
  • In October 2019, The Crown Estate initiated Round 4 leasing with a proposed installed capacity of at least 7 GW in English and Welsh waters[20].
  • European Wind Energy Association[21]: indicated that UK installed capacity could be as high as 55 GW by 2030 under a high scenario, assuming 98 GW of offshore wind in the North Sea. Discussions in the North Sea Energy Forum have also indicated interest in exploring options for up to 200 GW installed capacity in the North Sea by 2050, although this would be dependent on the establishment of a North Sea grid.

2.2.8 By 2035, National Grid scenarios suggest a total Scottish generating capacity of between 13 and 25 GW, primarily from renewables. This potentially leads to increasingly dynamic Scottish network behaviour depending on factors such as weather condition and price of electricity. With demand in Scotland not expected to exceed 5.7 GW by 2040, which is much less than the Scottish generation capacity, Scotland will be expected to export power into England. At times of low renewable output, however, Scotland may need to import power from England[22].

2.2.9 The future requirement for and contribution of offshore wind to UK supply will depend inter alia on cost competitiveness of offshore wind, UK Government policy in relation to other forms of electricity generation such as nuclear new build and community renewables, the development and cost-effectiveness of electricity storage capacity for intermittent sources of generation and the pace of electrification of transport.

2.2.10 In terms of progress towards national targets, The Committee on Climate Change[23] noted that Scotland is performing well in reducing greenhouse gas emissions compared to the rest of the UK, and met its annual legislated target for 2016. Overall, Scottish emissions are now 49% below 1990 levels, and Scotland is on course to outperform the interim emissions reduction target for at least a 56% reduction in actual emissions by 2020. The Scottish Government introduced the Climate Change (Emissions Reduction Targets) (Scotland) Bill to the Scottish Parliament in May 2018 following advice from the Committee on the definition and levels of the new targets. The amendments lodged to the Climate Change Bill raised the ambition of the 2030 and 2040 targets for emissions reductions to 70% and 90% respectively. The newly passed Climate Change (Emissions Reduction Targets) (Scotland) Act 2019 implements some of the most stringent statutory targets in the world, with the aim of ending our contribution to climate change, definitively, within a generation.

2.2.11 In view of the significant planned expansion of renewables and the scope to further develop renewables opportunities, which would make Scotland a significant net exporter of renewable energy, the Committee on Climate Change[24] notes that the main challenges to Scotland achieving its long-term emission reduction targets relate to tackling emissions from agriculture and transport.

2.2.12 Investment in electricity infrastructure is crucial to realising Scotland’s renewable energy potential, allowing power to flow from remote areas of high resource, where grid connections are often weak, to major centres of demand. This is particularly the case for the Highlands and Islands, where connection to the mainland grid network can be challenging.

2.2.13 Overall, the above evidence could indicate a clear potential requirement for new leasing of OWF at UK level of between 10-20 GW installed capacity by 2050 with a possibility of greater demand depending on progress with a North Sea grid. Some of this requirement will be met from further leasing offered by The Crown Estate for England, Wales and Northern Ireland waters, but there is also an opportunity for Scotland to contribute to meeting this demand.

2.2.14 Based on the above, three scenarios (termed ‘Low Case’, ‘Medium Case’ and ‘High Case’) have been developed for the purposes of this study relating to different scales of possible future offshore development within the DPOs at national level in the period 2020 to 2050 as follows (in terms of additional capacity beyond existing lease agreements):

  • Low Case: 3 GW installed capacity;
  • Medium Case: 5 GW installed capacity;
  • High Case: 10 GW installed capacity;

2.2.15 A recent review of the density of offshore wind turbine layouts for recent European offshore wind projects[25] indicated that densities were largely within the range 4.3–6.5 MW per km². This density is governed by the need to maximise harnessing of the wind resource without affecting the performance of adjacent turbines within an array. Constraints within individual DPOs could result in lower levels of deployment but it may also be possible to achieve higher levels of deployment at other locations. Assuming an average density of 5 MW per km² for future projects under the Plan and based on the combined area of the DPOs, the DPOs have a combined potential to accommodate over 70 GW installed capacity. This capacity is an order of magnitude greater than the likely demand under the Plan.

2.2.16 In order to carry out a realistic assessment of the potential social and economic impact of possible development under the Plan, consideration has been given both to possible scales of development within each DPO and possible scales of development at regional and national levels. These assumptions are set out in Table 2.

2.2.17 The assessment of the potential negative impacts of development within individual DPOs has assumed that development occurs at a ‘maximum realistic level’ (column 5 of Table 2) having regard to the overall capacity of the DPO and the anticipated overall scale of likely development under the Plan at regional and national levels.

2.2.18 At regional scale, it is unlikely that development will occur in every DPO in a region and some locations will be taken forward in preference to others. Table 2 therefore also includes assumed realistic regional scales of development under the scenarios. To quantify impacts at regional level, the sum of the DPO-level impacts has been scaled back pro rata to the regional scenario totals. To quantify impacts at national level, further scaling back of the regional totals has been undertaken in line with the overall scale of likely development under the Plan at national level under each scenario.

2.2.19 For individual DPOs, in line with the broad parameters for the Plan, it has been assumed that the minimum scale of development within any DPO is 100 MW.

Table 2 Indicative Capacity and Occupancy of Draft Option Plan Areas

Region DPO Area (km²) Potential installed capacity (GW) Realistic maximum development scenario for DPO (GW) Regional Low Scenario (GW) Regional Medium Scenario (GW) Regional High Scenario (GW)
East E1 3816 19.1 3
E2 1287 6.4 2
E3 474 2.4 1
Sub-total 5577 27.9 6 1 2 3
North East NE1 776 3.9 2
NE2 464 2.3 1
NE3 339 1.7 1
NE4 440 2.2 1
NE5 496 2.5 1
NE6 699 3.5 2
NE7 1027 5.1 3
NE8 401 2.0 1
Sub-total 4641 23.2 12 1.5 3 4.5
North N1 1163 5.8 2
N2 560 2.8 2
N3 1106 5.5 2
N4 200 1.0 1
Sub-total 3030 15.1 7 1 2 3
West W1 1107 5.5 2
Sub-total 1107 5.5 2 0.5 1 2
South West SW1 292 1.5 1
Sub-total 292 1.5 1 0.3 0.6 1
Total 14646 73.2 28 4.3 8.6 13.5
Scaled back in national scenario to: 3 5 10

Consideration of Possible Future Technologies

2.2.20 There is currently uncertainty concerning the nature of possible future offshore wind technologies that will be deployed. The DPOs provide space both for conventional fixed bottom installations in shallower water (less than 60 m depth) and for deeper water (floating) technologies. It is currently unclear how quickly and to what extent deep water technologies might become cost competitive and thus what the balance between technologies might be.

2.2.21 There is also uncertainty concerning construction methods, particularly for deep water technologies, where a variety of options for foundation substructures might be considered.

2.2.22 The precise nature of the technologies to be deployed and their construction methods has the potential to affect the nature and scale of impacts, including socio-economic impacts. However, it is not appropriate to make detailed assumptions about project-level technologies and construction methods in this plan-level assessment. Many socio-economic impacts associated with offshore wind farms do not vary as a function of technology choice, although it is noted that tethering arrangements for floating offshore wind could affect the area of seabed that would be sterilised for commercial fishing activity. This uncertainty has been captured in the methodology for the commercial fisheries assessment.

2.2.23 In addition, while some socio-economic impacts may arise as a consequence of environmental impacts (which may vary to an extent depending on the technology) it will be a general requirement of the EIA and HRA processes to minimise such impacts to acceptable levels (where necessary underpinned by licence conditions). On this basis, residual environmental impacts should not be of sufficient magnitude to give rise to significant socio-economic impacts.

Developing an Indicative Programme

2.2.24 The timing of possible development within individual DPOs is particularly uncertain. The assumption has been that the draft Plan will look to enable development within the period 2030 to 2050. Assuming Plan adoption in 2020, it is possible that consenting could be completed in some DPOs within 4 years with construction in these areas starting as early as the late 2020s, and for those schemes to become operational by the early 2030s. Whilst it is not possible to predict precisely when and where development may come forward, for the purposes of this assessment differing assumptions have been made at individual DPO, regional and national levels.

2.2.25 For the purposes of assessing the individual DPOs it has been assumed (as a worst-case cost assumption, and to allow different DPOs to be compared on the same terms) that construction will begin in 2028 with construction completing and operation starting in 2030.

2.2.26 The assumptions on the temporal sequencing of development at regional and national scales are summarised in Table 3 and Table 4. The year that each development enters operation is shown, with construction taking place during the two preceding years. In these scenarios, the latest developments enter operation in 2042 in order that some element of operational cost is included in the assessment. The proposed mitigation measures for some DPOs has not been incorporated into the temporal assumptions as this would have the effect of reducing the apparent negative economic impacts of those DPOs/regions over the assessment period. These mitigation measures may move the impacts for some DPOs slightly later, but there is uncertainty around how long the mitigation will be in place.

Table 3 Temporal assumptions used in regional assessments

Region Scenario Total development in region (GW) Development Size (GW) Year entering operation
East Low 1 1 2030
Medium 2 1
1
2030
2035
High 3 1
1
1
2030
2035
2040
North East Low 1.5 1
0.5
2030
2035
Medium 3 1
1
1
2030
2035
2040
High 4.5 1.5
1.5
1.5
2030
2035
2040
North Low 1 0.5
0.5
2030
2035
Medium 2 1
1
2030
2035
High 3 1
1
1
2030
2035
2040
West Low 0.5 0.5 2030
Medium 1 1 2030
High 2 1
1
2030
2035
South West Low 0.3 0.3 2030
Medium 0.6 0.3
0.3
2030
2035
High 1 0.5
0.5
2030
2035

Table 4 Temporal assumptions used in national assessments

Region Scenario Total development in region (GW) Development Size (GW) Year entering operation
National Low 3 1
1
1
2030
2035
2040
Medium 5 1
1
1
1
1
2030
2033
2036
2039
2042
High 10 2
2
2
2
2
2030
2033
2036
2039
2042

Taking Account of Cable Routes

2.2.27 There is currently a high level of uncertainty concerning the possible location and number of export cables associated with potential development within the proposed DPOs. These requirements will depend on the scale and location of development within the DPOs and the future development of grid connection points (both onshore and offshore). Some information is available from National Grid[26] on potential and planned grid reinforcement which indicates locations where capacity may be available in the future, but this only extends to the medium term and does not take into account potential further offshore wind development in Scottish waters. It remains challenging to predict the precise routes for export cable corridors. Given these uncertainties, a qualitative assessment of the impact of export cables is carried out where feasible, taking into account potential constraints inshore of the DPOs.

Supply Chain Development

2.2.28 The scenarios drive the assessment of positive economic and social impacts, with a series of assumptions required on how, where and why the supply chain could grow and/or change in response to the levels of spending. Quantitative assumptions on the potential scale of future developments, the possible future technologies, the indicative programme of spending and where that spending will be targeted provide the basic scenario assumptions. These have been developed into scenario storylines to explain how the level of spending could result in changes to the supply chain in the associated Nomenclature of Territorial Units for Statistics (NUTS) level 2 areas.

2.2.29 The method used is based on six key steps:

  • Step 1: estimate level of spending per GW per year per activity, with five different activities identified reflecting the different stages of projects:
  • Development and project management;
  • Wind turbine supply;
  • Balance of plant;
  • Installation and commissioning;
  • Operation, maintenance and service.
  • Step 2: identify percentage of spend that retained per region per GW per year to account for leakage where spend occurs outside of Scotland. This is based on the current status of the supply chain and its capacity to provide the services required and the extent to which the supply chain is expected to grow. National retention is based on the ‘typical’ retention across all of the regions given the need to factor back total spending at the national scale, which means this total will be less than the sum across all regions.
  • Step 3: allocate total spend to a spending profile to reflect the projected timing of the different activities in each region and nationally.
  • Step 4: apply the GVA effects relevant to the different activities to estimate GVA impacts based on level of spend that is retained and total amount of GW expected to be installed.
  • Step 5: apply the employment effect relevant to the different activities to estimate number of full-time equivalents (FTEs) that could be generated from the investment.
  • Step 6: divide jobs into those that would be for local people and those where people would relocate.

2.2.30 The outcomes of each step are provided in Section 4 with a summary of the results. The detailed methodology and key input data and information used in each step are provided in Appendix C.

2.3 Defining Relevant Marine Activities for Inclusion in the Assessment

2.3.1 A wide range of human activities occur in or are dependent on the marine environment which could potentially be affected by aspects of offshore wind development. For consistency with previous assessments, the following categories of activity (sectors) are considered within the study:

  • Aquaculture (finfish and shellfish);
  • Carbon Capture and Storage;
  • Coast Protection and Flood Defence;
  • Commercial Fisheries (including salmon and sea trout);
  • Energy Generation;
  • Military Activities;
  • Oil and Gas (including exploration, production, interconnectors, gas storage);
  • Ports and Harbours;
  • Power Interconnectors;
  • Recreational Boating;
  • Shipping (Commercial);
  • Telecom Cables;
  • Tourism (including heritage assets);
  • Waste Disposal (dredge material); and
  • Water Sports.

2.4 Establishing a Baseline

2.4.1 To assess the potential social and economic impacts of potential offshore wind development on relevant marine activities, it is necessary to establish a baseline (counterfactual) for each sector affected, against which the potential impacts of the Plan can be assessed.

2.4.2 Baseline information is therefore required for each relevant marine activity including:

  • The current location, intensity and economic value of activity; and
  • How the location, intensity and economic value might change over time in the absence of the Plan.

2.4.3 The ‘Sectoral Marine Plan for Offshore Wind Energy (Regional Locational Guidance (RLG))[27], provides a national baseline for each relevant marine sector included in the assessment in Section 2 of that report with Region specific information in Sections 3 to 7.

2.5 Outcome of Scoping

2.5.1 The potential for offshore wind development (including associated export cables) to give rise to social and economic impacts on other activities depends on the nature and scale of interactions between them. The scoping assessment defines the potential interactions and identifies those with the potential to give rise to significant social and economic impacts.

2.5.2 A scoping assessment[28] was undertaken based on the AoS. This drew on relevant previous studies and took account of specific factors relevant to each area. The scoping assessment was subsequently updated to take account of the selected DPOs. The identification of potentially significant interactions drew on previous social and economic assessments (e.g. ABPmer et al., 2011[29] and ABPmer & RPA, 2013[30]) and wider sources on interactions such as MMO (2014)[31].

2.5.3 To identify the potential for significant socio-economic impacts to occur, the scoping process took account of:

  • Whether the activity spatially overlaps with one or more AoS/DPO;
  • For tourism, where more than 10% of an AoS/DPO is within 15 km of a seascape unit with a low 'Capacity Index', based on Scott et al. 2005[32];
  • The extent to which the spatial overlap is judged likely to give rise to a significant interaction; and
  • The likely scope to avoid a significant interaction through spatial planning of the location of arrays within an AOS/DPO.

2.5.4 Where one or more potentially significant interactions was identified, further consideration has been given to the potential impact pathways by which social and economic impacts may arise and the extent to which any or all of the relevant pathways require assessment. Where potential for significant social and economic impacts was identified, these interactions have been subject to more detailed assessment.

2.5.5 Where potential impacts will need to be mitigated up-front by the developer as a condition of consent, it is assumed that the residual impacts will not give rise to significant social and economic impacts. The mitigation costs to be met by the developer are not included in the costs presented in the assessments described within this study, as there is uncertainty around the nature and scale of any mitigation required. For example, in the case of potential impacts to aviation radar, it has been assumed that these will need to be mitigated by the developer, particularly in the short and medium term, and therefore significant impacts to the aviation sector will be avoided and so are not quantified within this assessment.

2.5.6 Similarly, where potential social and economic impacts arise from potential environmental impacts, it has been assumed that mitigation will be required for such (environmental) impacts as a condition of consent, and the residual environmental impacts will not give rise to significant social and economic impacts.

2.5.7 A summary of the outcome of scoping is provided in Table 5 and further detail in Appendix D.

Table 5 Summary of outcome of scoping

Sector Scoping – Need for Detailed Assessment
Aquaculture No detailed assessment required.*
Aviation Detailed assessment required for:
  • Height obstruction of commercial helicopter navigation routes (arrays).
Carbon Capture and Storage Detailed assessment required for*:
  • Competition for space (sterilisation of seabed potential storage areas/obstruction of potential pipeline routes) (arrays).
Coast Protection and Flood Defence No detailed assessment required.
Energy Generation Detailed assessment required for*:
  • Competition for space (offshore) within DPO areas (arrays).
Fisheries Detailed assessment required for*:
  • Complete loss or restricted access to traditional fishing grounds (arrays and cables);
  • Changes in fishing patterns, including gears used and species targeted (arising from displacement of fishing vessels as a result of loss of traditional fishing grounds) (arrays);
  • Obstruction of fishing vessel navigation routes (arrays);
  • Fouling of fishing gear on cables or seabed infrastructure;
  • Consequential impacts to seafood processors and other food, beverage and services including accommodation and water transport.
Military Activities Detailed assessment required for*:
  • Competition for space (arrays);
  • Interference with underwater communications (arrays).
Oil and Gas Detailed assessment required for*:
  • Competition for marine space - restricted access to seafloor (arrays);
  • Competition for marine space - restriction on exploration activities (arrays);
  • Competition for marine space - obstruction of pipeline routes (arrays).
Ports and Harbours No detailed assessment required.*
Power Interconnectors Detailed assessment required for*:
  • Competition for space with potential future interconnectors (DPO areas intersect proposed interconnector routes) (arrays).
Recreational Boating Detailed assessment required for*:
  • Alterations to informal cruising routes (arrays);
  • Deterrent to investment in marinas/supply chain (arrays);
  • Increase marine risk (arrays).
Shipping Detailed assessment required for*:
  • Obstruction of transiting vessel and/or ferry routes; increased steaming distances and time (arrays).
Telecom Cables Detailed assessment required for*:
  • Competition for space with potential future telecom cables (arrays).
Tourism Detailed assessment required for*:
  • Impacts to landscape or seascape – long term (arrays).
Waste Disposal No detailed assessment required.*
Water Sports Detailed assessment required for*:
  • Displacement due to spatial overlap between array and recreational sea angling activity (arrays).
* Cable route implications have been considered to the extent possible where there is clarity on their potential location.

2.6 Assessment Methodology

2.6.1 The assessment of economic impacts and the consequent social impacts on individuals, communities and society has been undertaken for scoped-in activities and interactions.

2.6.2 The sections that follow provide a high-level overview of the methods applied for:

  • Assessing negative economic impacts to marine activities;
  • Assessing positive economic impacts to marine activities;
  • Assessing social impacts on individuals, communities and society (positive and negative); and
  • Assessing combined impacts.

2.7 Assessing Negative Economic Impacts to Marine Activities

2.7.1 The assessment of negative economic impacts has been conducted for individual DPOs and at regional and national levels. Detailed methods for each sector are provided in Appendix E.

2.7.2 Analysis of interactions between offshore wind development and other marine activities is generally based on spatial analysis using geographical information system (GIS) tools to provide a quantitative estimate of the interaction.

2.7.3 Estimates of economic impacts are then made following different approaches, all based on the likely effect of key economic indicators of performance:

  • Where an interaction would result in a material reduction in the level of output from an activity, the economic impact is assessed in terms of a reduction in Gross Value Added (GVA) and employment;
  • Where an interaction would result in an increase in that activity’s operating costs but would not result in a reduction in economic output from that activity, the impacts are expressed in terms of monetary costs; and
  • Where an interaction might create investment uncertainty for an activity, such uncertainties are noted in the analysis but not quantified.

2.7.4 Where an interaction has the potential to affect economic output, resulting in impacts to GVA and employment, in line with Scottish Business and Regulatory Impact Assessment (BRIA) guidance[33], a distributional analysis of the economic impact has also been carried out. The outputs from this distributional analysis have been used to inform the assessment of social impacts. Further details on the methods used to assess impacts to GVA and employment and for the distributional analysis are provided in Appendix E and section 2.9.

2.7.5 The economic assessment has been undertaken for a time period of 40 years, starting in 2020 and finishing in 2059 to capture the main period of potential impacts and excluding repowering and decommissioning which could start to occur in the very final years. This ensures that the assessment covers the likely period of construction of deep water wind projects (expected from the late 2020s), with operation assumed in the scenarios to commence in the period 2030 to 2042).

2.7.6 In line with latest HM Treasury guidance, the standard 3.5% declining discount rate has been used for positive and negative impacts over the 40-year time period. The impacts of the offshore wind plan could extend to cover long-term, intergenerational effects so the reduced discount rate was applied as a sensitivity (this excludes the pure social time preference). The reduced rate starts at 3% for years 0–30, compared with 3.5% for the standard discount rate. This then declines to 2.57% for years 31–75, compared with 3.0% for the standard discount rate.

2.8 Assessing Positive Economic Impacts to Marine Activities

2.8.1 Positive impacts for the Scottish economy are calculated at both national and local authority level. The percentage local retention rates included in the scenarios are used as the basis for identifying what level of spend is retained in Scotland and what level would lead to impacts being felt elsewhere (outside Scotland). Since these percentages are reported on a regional scale, multipliers are applied to enable knock-on jobs and GVA to be estimated.

2.8.2 In addition, leakage from one region to another is an important consideration in the regional assessment, as well as leakage outside of Scotland for the national assessment. A sensitivity test has been undertaken to assess what the additional impacts might be if there is leakage from the West region to the North and North East regions, rather than if all leaked spend is invested outside of Scotland (e.g. England or Ireland). Consideration is also given to the impacts of substitution effects, where growth in the supply chain in response to investment in offshore wind could substitute for activity in other industry sectors due to capacity limitations (displacement from other sectors would count as a negative impact for the affected sector). This is reported based on the capacity of the supply chain to deliver the expected level of spend in each region individually and across Scotland as a whole.

2.8.3 BVG Associates (2019)[34] gives a breakdown of undiscounted capital and operational costs for a typical offshore wind farm, based on a 1 GW wind farm using 100 10 MW turbines located 60 km from shore in 20 m water depth. Development and project management is assumed to begin in 2022. This is used as the basis for estimating total spent along the supply chain. The total spend per activity are applied with the percentages assumed for local retention as the basis for estimating the GVA and jobs that could be generated associated with the scale and programme of future development. The levels of spend retained locally are combined with multipliers to give an estimate of the positive impacts in terms of GVA and jobs that could result from the level of spend (where this is assumed to give a measure of the change in output). However, the impacts will be derived for the Scottish economy as a whole on the basis of national multipliers.

2.8.4 National multipliers are available for Scotland. National multipliers detail the relationship between producers and consumers and the interdependencies of industries for a given year. They offer a picture of the flows of goods and services (products) in Scotland but they are only available for the onshore economy[35]. Multipliers are assigned to the most relevant SIC codes for each of the activities given in the BVG (2019) report:

  • Development and project management: multipliers used for 71 (architectural services, etc.: includes other engineering activities such as ‘design activities for the construction of civil engineering works’);
  • Wind turbine supply: multipliers used for 28 (machinery and equipment);
  • Balance of plant: multipliers used for 41-43 (construction);
  • Installation and commissioning: multipliers used for 41-43 (construction);
  • Operation, maintenance and service: multipliers used for 33 (repair and maintenance).

2.8.5 There are two types of multipliers available depending on the level and round of effects being calculated. Direct and indirect impacts are captured by Type I multipliers. Direct impacts relate to the specific sector, whereas indirect impacts relate to the businesses that supply that sector. Type II multipliers also include induced effects (the effect attributable to the ensuing change in compensation of employees which may cause further spending and hence further changes in final demand).

2.8.6 Multipliers are available for GVA and employment effects from the Scottish Government[36]. Multipliers for GVA effect reflect the direct and indirect (and induced if Type II multipliers are used) GVA changes to the direct output change, due to a unit increase in final use. Employment effect multipliers apply to changes in output, or GVA. Applying the GVA effect to the change in output (estimated as locally-retained spend) for each activity (development and project management, wind turbine supply, balance of plant, installation and commissioning, and operation, maintenance and service) is used to calculate the change in GVA for the economy as a whole. Similarly, applying the employment effect to the change in output (as £ million) enables an estimate to be made of the number of jobs affected (as full-time equivalents). The multipliers used in this study are given in Table 62 and Table 63 in Appendix C.

2.8.7 Further details of the methodology for assessing supply chain impacts are provided in Appendix C.

2.9 Assessing Social Impacts on Individuals, Communities and Society (Positive and Negative)

2.9.1 The assessment of social impacts is based on social clusters[37]. Impacts on each of these clusters are considered in the context of ‘change’ and linked to national indicators and sustainable development goals from the National Performance Framework[38]. Table 6 links the value clusters to the national indicators and sustainable development goals from the National Performance Framework[39].

2.9.2 The table shows where the clusters may be potentially affected by positive or negative impacts from offshore wind development and the national indicators and sustainable development goals that could be used to describe and measure those changes.

2.9.3 Some screening has been applied to identify those impacts that are most likely to directly and indirectly result in effects linked to the sustainable development goals. For example, the cluster of family, family life and inter-generational issues could be positively affected from increased numbers of jobs and skills in local areas. At the same time, an increase in population could result in house price increases with young people having to move further away. Better-paid jobs could help to reduce inequalities, including to children’s material deprivation. Increased development could have indirect effects such as increased demand for services and loss of access to recreational/open space. This could in turn affect health and well-being.

2.9.4 Because there is considerable overlap between the indicators and goals, and indeed across the clusters, there is a risk of double counting. Thus, the approach provides a framework for a narrative of impacts by cluster such that specific issues or concerns can be highlighted and the pathways for impacts be explored (e.g. increased demand for services, reduced pay gap). The magnitude of impacts at the cluster scale is recorded using a rating system, as set out in Table 7. The ratings are linked back, where possible, to current statistics so the projected changes can be viewed in context (i.e. against the current baseline).

Table 6 Linking the clusters to the relevant national indicators and sustainable development goals

Cluster National Indicators Sustainable Development Goals
Relevant to potential positive impacts Relevant to potential negative impacts Relevant to potential positive impacts Relevant to potential negative impacts
Individual Family, family life, inter-generation issues
  • Scotland’s population
  • Children’s material deprivation
  • Scotland’s population
  • Reduced inequalities
  • Affordable and clean energy
  • Good health and wellbeing
  • Reduced inequalities
  • Good health and wellbeing
Jobs, career, employment
  • Economic growth
  • Spend on research and development
  • Entrepreneurial activity
  • Economic participation
  • Employees on the living wage
  • Contractually secure work
  • None
  • Decent work and economic growth
  • Reduced inequalities
  • Affordable and clean energy
  • Industry, innovation and infrastructure
  • None
Money, cost of living
  • Income equalities
  • Relative poverty after housing costs
  • Wealth inequalities
  • Cost of living
  • Pay gap
  • Cost of living
  • Affordable and clean energy
  • No poverty
  • None
Community Local jobs, local industry, community sustainability
  • Productivity
  • International exporting
  • Economic growth
  • Spend on research and development
  • Entrepreneurial activity
  • Workplace learning
  • Skill profile of the population
  • Skills under-utilisation
  • Number of businesses
  • High growth businesses
  • Economic participation
  • Contractually secure work
  • None
  • Affordable and clean energy
  • Decent work and economic growth
  • Industry, innovation and infrastructure
  • Sustainable cities and communities
  • Reduced inequalities
  • None
Transport connections, technology connections
  • Quality of public services
  • Quality of public services
  • Industry, innovation and infrastructure
  • Sustainable cities and communities
  • None
Education
  • Quality of children’s services
  • Workplace learning
  • Quality of public services
  • Quality of children’s services
  • Quality of public services
  • Sustainable cities and communities
  • Good health and wellbeing
  • Reduced inequalities
  • Good health and wellbeing
  • Reduced inequalities
Shops, housing
  • Satisfaction with housing
  • Quality of public services
  • Satisfaction with housing
  • Quality of public services
  • Sustainable cities and communities
  • Good health and wellbeing
  • Good health and wellbeing
Socialising, recreation, parks, leisure
  • A positive experience for people coming to Scotland
  • A positive experience for people coming to Scotland
  • Places to interact
  • Good health and wellbeing
  • Reduced inequalities
  • Good health and wellbeing
  • Reduced inequalities
  • Life on land
Friends, being involved, supporting others
  • Social capital
  • Social capital
  • Reduced inequalities
  • Good health and wellbeing
  • Reduced inequalities
  • Good health and wellbeing
Local identity, cultural heritage, Gaelic
  • A positive experience for people coming to Scotland
  • Scotland’s reputation
  • Perceptions of local area
  • A positive experience for people coming to Scotland
  • Scotland’s reputation
  • Perceptions of local area
  • Community land ownership
  • Good health and wellbeing
  • Affordable and clean energy
  • Good health and wellbeing
Healthcare
  • Quality of public services
  • Quality of care experience
  • Quality of public services
  • Sustainable cities and communities
  • Good health and wellbeing
  • Sustainable cities and communities
  • Good health and wellbeing
Connection to nature, landscape
  • Access to green and blue space
  • Natural capital
  • Community land ownership
  • Access to green and blue space
  • Condition of protected nature sites
  • Reduced inequalities
  • Good health and wellbeing
  • Affordable and clean energy
  • Reduced inequalities
  • Good health and wellbeing
  • Life below water
  • Life on land
Local political and decision-making systems
  • Trust in public organisations
  • Energy from renewable sources
  • Influence over local decisions
  • Trust in public organisations
  • Influence over local decisions
  • Affordable and clean energy
  • None
Wider political and environmental context Landscape, seascape, wildlife, environmental change
  • Access to green and blue space
  • Natural capital
  • Access to green and blue space
  • Condition of protected nature sites
  • Sustainability of fish stocks
  • Biodiversity
  • Marine environment
  • Affordable and clean energy
  • Life below water
  • Life on land
National and EU level political and decision-making systems
  • International exporting
  • Carbon footprint
  • Greenhouse gas emissions
  • Trust in public organisations
  • International networks
  • Contribution to development support to other nations
  • Energy from renewable sources
  • Trust in public organisations
  • Reduced inequalities
  • Affordable and clean energy
  • Climate action
  • Reduced inequalities

Table 7 Ratings for use in the socio-economic impact assessment

Negative impacts (-) Positive impacts (+)
Major (- - - -): sufficient negative impacts predicted to have a noticeable effect that is sufficient to cause complaints and/or protests from the community Major (+ + + +): sufficient positive impacts predicted to have a noticeable effect that is sufficient to enable new services or activities within the community
Moderate (- - -): sufficient negative impacts predicted that result in concerns being raised by the community Moderate (+ + +): sufficient positive impacts predicted that result in increased levels or expansion of existing activities or services
Minor (- -): negative impacts predicted that may be noticed but which are accepted by the majority of the community Minor (+ +): positive impacts predicted that may be noticed but which support existing services or activities but not the extent that they can expand
Negligible (-): small negative impacts that are unlikely to be noticed by the majority of the community Negligible (+): small positive impacts that are unlikely to be noticed by the majority of the community
Neutral/no overall impact: 0
Notes: Based on work undertaken by RPA with ABPmer for a series of socio-economic impact assessments undertaken for Scottish Government and Marine Scotland.

2.9.5 The assessment also considers who is affected, including any individual group within the community. The analysis looks regionally first, but it is then reduced to a smaller scale to differentiate between which parts of the community are expected to be affected. This could be geographical, i.e. a specific town or village, or demographical, i.e. a specific age group, gender or minority group. Local priorities are also observed, based on information identified by Collingwood[40], to assess whether there are any positive or negative impacts that may be relatively more significant.

2.9.6 Application of the above framework draws on the qualitative assessment of impacts on each sector and trade-offs: negative effects will draw on the assessment of negative impacts to marine activities and negative economic impacts; positive effects will draw on the assessment of positive economic impacts. These are then considered in terms of their knock-on social impacts.

2.9.7 The scale of impacts is important. A dual approach is applied — both bottom-up and top-down — to ensure that all impacts can be captured, and also for validation purposes. The negative economic impacts on marine activities are bottom-up and so highlight specific, local effects. The positive economic impacts are top-down so represent regional impacts. The social impact assessment combines all of these assessments, enabling local impacts on specific localities or groups within society to be reflected. In this way, the scale of the assessment can be kept high-level to ensure it can be completed within the available timescale and budget, but so that important local impacts can be highlighted where these are expected to be significant.

2.9.8 Further details are provided in Appendix G.

2.10 Assessing Combined Impacts

2.10.1 For the purpose of this study, the assessment considers the combined effect at both regional and national scales, using the regions shown in Figure 4. These regions have been developed to group together the DPOs that occur in proximity to each other.

2.10.2 In general, at low levels of offshore wind development, the socio-economic impacts of additional levels of development are likely to be additive. In contrast, above a certain level of development and threshold of impact, it may no longer be economic to continue with an activity and the whole of the activity may be lost. However, there is limited evidence that indicates what the relevant thresholds might be, above which impacts may become synergistic.

2.10.3 Given these constraints, the study generally adopts an additive approach to assessing the cumulative economic impact associated with multiple offshore renewables development locations and multiple offshore renewables technologies. The impact of individual DPOs is assessed and summed on a regional level and then scaled back to the anticipated level of development (within each region and at national level in line with the Plan; see section 2.1.3). If the impacts are predicted to be particularly concentrated and intense at a local or regional level, specific consultation should be undertaken with the relevant sectoral interests to seek to evaluate the combined effect using expert judgement.

2.10.4 The approach to estimating the combined social effects and distributional impacts is based on assigning a significance rating to impacts on different groups in each key area. The following ratings are applied:

  • Very significant: almost all people in this location/group are likely to be affected;
  • Significant: the most vulnerable people are likely to be affected;
  • Slightly significant: some people or those who are more vulnerable are likely to be affected; and
  • Not very significant: few people or those who are least vulnerable are likely to be affected.

Contact

Email: drew.milne@gov.scot