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

3 Potential Negative Economic Impacts on Activities

3.1 Introduction

3.1.1 This section summarises the estimated potential negative economic impacts on other marine sectors and activities associated with the development of Offshore Wind within Scottish seas. Quantified cost estimates are presented in tables for each sector. Where potential impacts are expected to affect a sector’s output, the impact on GVA and employment is also provided. Potential impacts for which cost estimates were not possible, are described qualitatively.

3.1.2 Potential negative economic impacts are presented initially for the potential development within any one individual DPO under a realistic maximum development scenario. The assessment subsequently factors back these potential impacts to regional and national scale to account for the reality that only a fraction of the area identified in the DPOs will ultimately be developed.

3.2 Aviation

3.2.1 There are no quantified potential negative impacts associated with the aviation sector that can be presented within this report. However, there are potential impacts to helicopter main routes and aviation radar associated with the locations of the DPOs.

3.2.2 Specifically, NE1, NE6, NE7, NE8 and E2 are all intersected by helicopter main routes (HMRs). Current Civil Aviation Authority (CAA) advice (CAP764) indicates that development may be restricted within 2 km of a HMR, which if applied has the potential to significantly reduce the available area within these DPOs.

3.2.3 Any potential cost attributed to the mitigation of impacts on aviation radar has been assumed to be met by the developer, where required, therefore there is no cost to the aviation sector.

3.3 Carbon Capture and Storage

3.3.1 There are no quantified potential negative impacts associated with the CCS sector that can be presented within this report. There is one proposed CCS project which has been reviewed in this assessment (ACT Acorn). This project proposes to use existing infrastructure, which will not be impacted by the development of offshore wind, and there is therefore no additional cost to the sector.

3.3.2 Should further CCS projects come forwards during the lifetime of the plan, there is the potential for opportunity costs, if areas of seabed are sterilised by offshore wind development, and potential costs for pipeline diversions or cable crossings if new pipelines are to be installed which could interact with offshore wind export cables.

3.4 Commercial Fisheries

3.4.1 Potential quantified impacts to direct GVA of the commercial fisheries sector are summarised in Table 8 at a DPO level under the maximum development scenario and Table 9 scaled at regional and national levels. The value of landings affected in any one year for commercial fisheries (on which the direct GVA impact is based) is summarised in Table 10, and the direct GVA impact on an annual average basis is provided in Table 11. These potential negative impacts are based on the worst-case scenario that all fishing activity ceases within arrays.

3.4.2 All DPOs have the potential to give rise to impacts on commercial fisheries. The magnitude of impact will depend on the level of development in individual DPOs, and the direct GVA impacts calculated are scaled according to assumptions of the maximum development scenario in each DPO.

Table 8 Potential direct GVA impacts to commercial fisheries (present value of direct GVA over assessment period 2020-2059, £000s, 2019 prices)

DPO	Maximum Development Scenario (GW)	Direct GVA impact	Direct GVA impact per GW installed
SW1	1	432	432
W1	2	1,482	741
N1	2	1,392	696
N2	2	823	411
N3	2	1,991	995
N4	1	675	675
NE1	2	1,378	689
NE2	1	399	399
NE3	1	600	600
NE4	1	808	808
NE5	1	803	803
NE6	2	345	173
NE7	2	2,967	1,483
NE8	1	1,786	1,786
E1	3	326	109
E2	2	659	330
E3	1	74	74

Table 9 Potential direct GVA impacts for commercial fisheries at regional and national levels (present value over assessment period 2020-2059, £000s, 2019 prices)

Region	Lower Scenario (GW)	Lower Scenario	Medium Scenario (GW)	Medium Scenario	Upper Scenario (GW)	Upper Scenario
South West	0.3	130	0.6	228	1.0	380
West	0.5	371	1	741	2	1,304
North	1	614	2	1,227	3	1,617
North East	1	1,000	3	1,756	4.5	2,634
East	1	177	2	311	3	409
National	3	1,353	5	2,125	10	4,284

Table 10 Potential annual average value of landings affected for commercial fisheries (annual average value, £000s)

DPO	Maximum Development Scenario (GW)	Annual average value of landings	Annual average landings value impact per GW installed
SW1	1	61	61
W1	2	203	102
N1	2	212	106
N2	2	129	65
N3	2	278	139
N4	1	91	91
NE1	2	227	113
NE2	1	66	66
NE3	1	87	87
NE4	1	131	131
NE5	1	132	132
NE6	2	55	28
NE7	2	395	198
NE8	1	211	211
E1	3	57	19
E2	2	115	57
E3	1	12	12

Table 11 Potential annual average direct GVA affected for commercial fisheries (£000s)

DPO	Maximum Development Scenario (GW)	Annual average GVA	Annual average GVA impact per GW installed
SW1	1	31	31
W1	2	107	54
N1	2	101	50
N2	2	59	28
N3	2	144	72
N4	1	49	49
NE1	2	100	50
NE2	1	29	29
NE3	1	43	43
NE4	1	58	58
NE5	1	58	58
NE6	2	25	12
NE7	2	214	107
NE8	1	129	129
E1	3	24	8
E2	2	48	24
E3	1	5	5

3.4.3 DPOs with the highest potential impacts under the maximum development scenario are NE7 (mainly on over-12m pelagic and demersal trawlers), N3 (mainly on over-12m pelagic and demersal trawlers, and potters) and NE8 (mainly on over-12m pelagic trawlers). The DPOs with the greatest potential impact per GW installed are the same as the DPOs with the highest impact under the maximum development scenario.

3.4.4 Under the medium scenario, the North East region has the greatest potential impact on commercial fisheries. This is a result of it being the region with the highest number of DPOs, and containing DPOs with some of the greatest impacts per GW installed (see previous paragraphs). The region with the lowest potential impact under all scenarios is the South West region (Table 9).

3.4.5 At a national level, the potential impact on direct GVA of the commercial fisheries sector ranges from £1.4 million (present value over assessment period, lower scenario) to £4.3 million (present value over assessment period, upper scenario) (Table 9). This equates to annual impacts on GVA of £127,000 to £425,000. These impacts are relatively small in the context of landings of the Scottish catching sector in 2017 of £560 million, generating a GVA of £296 million. However, if several DPOs are developed in close proximity to each other and in the vicinity of important fishing grounds, they have the potential to have a more significant impact on particular segments of the fleet. This is particularly the case for the over-12m demersal trawl and seine segments of the fleet in the North East region.

3.4.6 The relative impact on each fleet segment is shown in context in Table 12. This shows the potential impact on GVA per fleet segment per region, compared to the total GVA of each fleet segment derived from each region. Note that this will over-estimate the proportional impact where a fleet segment derives landings from beyond the region (from other regions, or from further offshore), as the total GVA is calculated for each fleet segment based on its landings deriving only from the region. On the contrary, it will under-estimate the relative impact, where individual vessels’ activity is concentrated in only part of a region. This is particularly the case for the North East region, which covers a large area, and fleets (particularly smaller vessels) will not necessarily fish across the whole region.

3.4.7 The potential impact on GVA of all fleet segments under all regional scenarios is less than 1% of the regional direct GVA of each fleet segment, with the exception of over-12m creelers in the West region, for which 1.9% of regional direct GVA is affected under the high scenario, and 0.9% under the medium scenario. Fleet segments with over 0.5% of regional direct GVA impacted are under-12m dredgers in the West region (high scenario) and over-12m creelers in the South West region (high scenario).

3.4.8 There are also potential impacts on non-UK fishing vessels that are fishing within UK waters. These have not been quantified, but the nationalities potentially affected are noted in the tables for each DPO in Appendix F.

3.4.9 It is possible that the worst-case impact on the fisheries sector can be mitigated to some extent for some gear types by planning to ensure that, where possible, fishing activity can continue within the arrays, and siting of arrays within DPOs seeks to avoid key fishing grounds. If vessels switch gear types to enable them to continue fishing within arrays, there are costs associated with changing gears. As the assessment has assumed that all fishing activity ceases within arrays, such costs have not been quantified.

3.4.10 The knock-on effects of changes in landings and change in direct Gross Value Added (GVA) are estimated using the GVA multiplier (applied to change in present value GVA). Table 13 presents the impacts on GVA per region by scenario for both the Type I (direct and indirect) and Type II (direct, indirect and induced effects). The GVA multipliers used are for fishing (SIC 03.1) and are 0.6 for the Type I effects and 0.7 for the Type II effects.

3.4.11 Table 13 shows that the impacts are greatest in the North East, where they range from £1.6 million (low scenario, Type I) to £4.7 million (high scenario, Type II). The smallest impacts are in the South West, where these range from £207,000 (low scenario, Type I) to £685,000 (high scenario, Type II). These are discounted present values across the whole assessment timeframe (40 years).

Table 12 Direct GVA affected per fleet segment, per region, compared to regional GVA (annual average, 2019 prices)

Region and fleet segment*	Regional Direct GVA (£)	Direct GVA affected (£, annual average)			Direct GVA affected as % of regional GVA
		Low	Medium	High	Low	Medium	High
East
Over 12m
Demersal trawls	12,803,750	9,037	18,074	27,111	0.1%	0.1%	0.2%
Demersal seines & pelagic trawls	4,475,438	1,589	3,177	4,766	0.0%	0.1%	0.1%
Dredges	8,838,393	1,939	3,877	5,816	0.0%	0.0%	0.1%
Under 12m
Demersal trawls	4,863,330	2	4	6	0.0%	0.0%	0.0%
Lines	223,493	3	7	10	0.0%	0.0%	0.0%
Creels	22,701,453	68	135	203	0.0%	0.0%	0.0%
North East
Over 12m
Demersal trawls	80,276,710	23,317	46,635	69,952	0.0%	0.1%	0.1%
Demersal seines	17,856,592	11,075	22,150	33,225	0.1%	0.1%	0.2%
Dredges	11,225,932	9,749	19,499	29,248	0.1%	0.2%	0.3%
Pelagic trawls	204,984,517	36,107	72,214	108,320	0.0%	0.0%	0.1%
Creels, lines	2,972,704	124	249	373	0.0%	0.0%	0.0%
Under 12m
Demersal trawls	2,005,040	320	639	959	0.0%	0.0%	0.0%
Dredges	2,639,221	573	1,146	1,719	0.0%	0.0%	0.1%
Lines	935,660	56	112	168	0.0%	0.0%	0.0%
Creels	15,057,483	782	1,565	2,347	0.0%	0.0%	0.0%
Misc, nets, pelagic trawls	1,177,650	0	1	1	0.0%	0.0%	0.0%
North
Over 12m
Demersal trawls and seines	38,839,058	19,611	39,222	58,833	0.1%	0.1%	0.2%
Dredges	3,661,332	1,547	3,094	4,641	0.0%	0.1%	0.1%
Pelagic trawls	118,739,754	12,323	24,646	36,970	0.0%	0.0%	0.0%
Creels, lines and misc	16,256,873	13,503	27,006	40,509	0.1%	0.2%	0.2%
Under 12m
Demersal trawls	1,405,828	12	23	35	0.0%	0.0%	0.0%
Dredges	169,240	106	212	318	0.1%	0.1%	0.2%
Creels	22,609,163	3,056	6,112	9,168	0.0%	0.0%	0.0%
Nets, lines	180,729	2	4	7	0.0%	0.0%	0.0%
Miscellaneous	922,516	172	343	515	0.0%	0.0%	0.1%
West
Over 12m
Demersal trawls	26,098,498	5	10	20	0.0%	0.0%	0.0%
Demersal seines	34,206	3	6	13	0.0%	0.0%	0.0%
Dredges	9,751,348	126	252	503	0.0%	0.0%	0.0%
Creels	3,490,573	16,507	33,015	66,030	0.5%	0.9%	1.9%
Under 12m
Demersal trawls	6,648,328	181	362	724	0.0%	0.0%	0.0%
Dredges	1,362,007	2,004	4,009	8,018	0.1%	0.3%	0.6%
Creels	33,432,187	7,594	15,188	30,376	0.0%	0.0%	0.1%
Lines and Miscellaneous	2,644,476	366	731	1,462	0.0%	0.0%	0.1%
South West
Over 12m
Demersal trawls	31,286,616	25	50	84	0.0%	0.0%	0.0%
Dredges	19,462,608	2,207	4,415	7,358	0.0%	0.0%	0.0%
Pelagic trawls	5,894,831	767	1,534	2,556	0.0%	0.0%	0.0%
Creels	3,587,373	5,130	10,259	17,099	0.1%	0.3%	0.5%
Under 12m
Demersal trawls	2,573,824	4	8	13	0.0%	0.0%	0.0%
Lines	220,139	0	0	0	0.0%	0.0%	0.0%
Dredges	3,624,221	28	56	93	0.0%	0.0%	0.0%
Miscellaneous	2,268,313	558	1,117	1,862	0.0%	0.0%	0.1%
Creels	12,003,953	647	1,294	2,157	0.0%	0.0%	0.0%
Nets	35,267	7	14	24	0.0%	0.0%	0.1%
* In some cases, the impacts on some fleet segments have to be presented together, combined, to avoid disclosure of information that relates to fewer than five vessels.

Table 13 Present value GVA impacts from changes in landings (£000s, 2019 prices)

Scenario impacts	East	North East	North	West	South West	National
Low, Type I (direct + indirect)	£282	£1,599	£982	£593	£207	£2,166
Low, Type II (direct, indirect + induced)	£318	£1,799	£1,105	£667	£233	£2,436
Medium, Type I (direct + indirect)	£497	£2,809	£1,964	£1,186	£365	£3,400
Medium, Type II (direct, indirect + induced)	£559	£3,160	£2,210	£1,334	£411	£3,825
High, Type I (direct + indirect)	£655	£4,214	£2,587	£2,087	£609	£6,854
High, Type II (direct, indirect + induced)	£737	£4,741	£2,911	£2,348	£685	£7,711

3.4.12 The potential employment impacts are assessed using the employment effect applied to the change in the value of landings, which is assumed to be equal to a change in output from the fisheries sector. The employment effects used are for fishing (SIC 03.1) and are 9.7 for the Type I employment effect and 10.9 for the Type II employment effect. The potential impacts on jobs (as full-time equivalents, FTEs) from the annual impacts on fishing are shown in Table 14.

3.4.13 The largest impacts are in the North East region, with potential loss of 2 jobs (low scenario, Type I effects) to 5 jobs (high scenario, Type II effects). The difference between the Type I and Type II effects is generally small, up to a maximum of one FTE job in the North East. This suggests that the main impacts will be direct (i.e. on fishermen) or indirect (i.e. on processing, ports, etc.), rather than induced from loss of spending from those directly or indirectly affected.

Table 14 Employment effects (FTEs lost) as a result of changes in landings

Scenario impacts	East	North East	North	West	South West	National
Low, Type I	0.3	1.6	1.0	0.5	0.2	2.5
Low, Type II	0.3	1.8	1.1	0.6	0.2	2.8
Medium, Type I	0.6	3.2	2.0	1.0	0.4	4.1
Medium, Type II	0.7	3.6	2.2	1.1	0.4	4.6
High, Type I	0.9	4.7	2.9	2.0	0.6	8.3
High, Type II	1.0	5.3	3.3	2.2	0.7	9.3

3.4.14 The employment effects can also be explored in terms of the impacts on under-12m and over-12m vessels. Most of the impacts in terms of jobs are expected on the over-12m vessels, as shown in Table 15. Impacts on under-12m vessels in the West are proportionally much higher than on under-12m vessels in other regions (due to the importance of the W1 DPO area for creeling by under-12m vessels), with up to 37% of the jobs that are affected being on under-12m vessels. This compares with up to 10% of jobs affected being associated with under-12m vessels across the other regions or nationally.

Table 15 Employment effects (FTEs lost) as a result of changes in landings divided into impacts on under-12m and over-12m vessels

Scenario impacts	East		North East		North
	Under-12	Over-12	Under-12	Over-12	Under-12	Over-12
Low, Type I	0.001	0.3	0.03	1.5	0.06	0.9
Low, Type II	0.002	0.3	0.04	1.7	0.07	1.0
Medium, Type I	0.003	0.6	0.07	3.1	0.12	1.8
Medium, Type II	0.003	0.7	0.08	3.5	0.13	2.1
High, Type I	0.004	0.9	0.10	4.6	0.17	2.8
High, Type II	0.005	1.0	0.12	5.2	0.20	3.1
Scenario impacts	West		South West		National
	Under-12	Over-12	Under-12	Over-12	Under-12	Over-12
Low, Type I	0.18	0.3	0.02	0.2	0.21	2.3
Low, Type II	0.21	0.3	0.03	0.2	0.24	2.5
Medium, Type I	0.37	0.6	0.05	0.3	0.35	3.8
Medium, Type II	0.41	0.7	0.05	0.3	0.39	4.2
High, Type I	0.73	1.2	0.08	0.5	0.81	7.4
High, Type II	0.82	1.4	0.09	0.6	0.91	8.4

3.4.15 The impacts can also be considered in terms of gear type affected, with potential impacts in the West on under-12m vessels being largely associated with pots and traps. This accounts for 70% of the potential job losses under the low, medium and high scenarios. However, the overall impacts on pots and traps on under-12m vessels in the West region is still less than 1 FTE per year.

3.4.16 The largest potential impacts in North East region are for over-12m vessels with the greatest percentage of impacts associated with midwater trawls (33%) and demersal trawls (36%) under the low, medium and high scenarios. This indicates that between 0.5 and 1.7 FTE jobs could be lost on over-12m vessels involved with midwater trawls and between 0.6 and 1.9 FTEs on over-12m vessels involved with demersal trawls (Type I impacts only). Over-12m midwater trawls are also identified as suffering in the North (20%) and over-12m demersal trawls in the East (77%). Impacts in the South West affect over-12m dredges (28%) and over-12m creelers (61%), although in all cases these specific impacts result in the loss of less than 1 FTE, with the exception of midwater trawls in the North under the high scenario where impacts could result in reduction of 0.5 (low) to 1.6 (high) FTEs (Type I only).

3.4.17 The effect of changing GVA and jobs on local areas within each of the regions is based on the home port of the vessels affected (fishermen, local supply chain such as boat maintenance). The effect of a reduction in landings on the processing sector is assessed through the landings port of the vessels affected (impact on processing, ports). These aspects are discussed further in the social impact assessment (Section 5).

3.5 Energy Generation

3.5.1 There are no quantified potential negative economic impacts to the energy generation sector that can be presented within this report. There are areas where development of offshore wind within a DPO has the potential to introduce competition either for sea area (for example, SW1 overlaps with tidal stream energy DPOs, and W1 and N4 overlap with wave energy DPOs) or competition for transmission capacity, particularly with other marine renewable (tidal stream or wave energy) or island wind developments. This competition has the potential to introduce an opportunity cost to the sector, however this cannot be quantified.

3.6 Military Activities

3.6.1 There are no quantified negative economic impacts to the military sector that can be presented within this report. DPOs, specifically W1, NE2, NE3, NE4 and NE5, overlap with or are entirely within a number of exercise and danger areas identified by the UK Ministry of Defence (MOD) as being used for a variety of purposes, including live firing, naval exercises and RAF fast jet exercises. The development of these areas has the potential to displace MOD activity. However, this is unlikely to constitute a significant cost to the sector as the area involved is a very small proportion of the overall area available, and should the activity be considered important within this region, it may present a constraint on development in these regions.

3.7 Oil and Gas

3.7.1 There are no quantified potential negative economic impacts to the oil and gas sector that can be presented within this report. There is some overlap between the DPOs and oil and gas activities, specifically 30^th and 31^st round awards, licence blocks and small areas of hydrocarbon fields. Additionally, the 32^nd round blocks on offer (announced 10 July 2019) overlap parts of the East and North East regions, however there is uncertainty over which blocks may be taken forward in the future.

3.7.2 Development of offshore wind overlapping these areas in NE3, NE4, NE5, NE6, NE7, NE8, E1 and E2, should opportunities for hydrocarbon extraction be subsequently identified, could be considered an opportunity cost for the oil and gas sector. It is not, however, possible to quantify this potential cost.

3.7.3 In addition, there is potential for oil and gas development in the future, and the installation of new pipelines to be required to divert around offshore wind arrays or to install cable crossings. Both of these would potentially incur an additional, currently unquantifiable, potential cost to the oil and gas industry. However, the oil and gas industry in the North Sea is well developed, and therefore future development is likely to tie into existing pipeline infrastructure, reducing the likelihood of additional costs.

3.8 Power Interconnectors and Transmission Lines

3.8.1 Potential quantified negative economic impacts to power interconnector and transmission line developers are summarised in Table 16 at a DPO level under the maximum development scenario and in Table 17 scaled to regional and national levels. These impacts are associated with a potential requirement to divert planned cable routes around the DPOs in NE2 (Shetland interconnector), E1 and E3 (Eastern HVDC).

Table 16 Potential negative economic impacts to power interconnector and transmission line developers (present value of total costs over assessment period 2020-2059, £000s)

DPO	Maximum Development Scenario (GW)	Cost (£000s)	Cost per GW installed (£000s)
NE2	1	5,386	5,386
E1	3	401	134
E3	1	2,327	2,327

Table 17 Potential negative economic impacts to power interconnector and transmission line developers (present value of total costs over assessment period 2020-2059, £000s, scaled to regional and national scenarios)

Region	Lower Scenario (GW)	Lower Scenario (£000s)	Medium Scenario (GW)	Medium Scenario (£000s)	Upper Scenario (GW)	Upper Scenario (£000s)
South West	0.3	0	0.6	0	1	0
West	0.5	0	1	0	2	0
North	1	0	2	0	3	0
North East	1.5	673	3	1,346	4.5	2,020
East	1	455	2	909	3	1,364
National	3	787	5	1,311	10	2,506

3.8.2 The potential impacts to the sector are high, particularly when considered per cable installation with a potential cost in NE2 of £5.4m for the diversion of a single cable, the Shetland interconnector. However, it is recognised that these are worst-case impacts which do not take account for the potential for consultation with the sector and appropriate spatial planning within DPOs to mitigate these potential impacts, by reducing or removing the requirement for cable diversions.

3.8.3 Where there are existing operational cables within the DPOs (NE4 and NE5), it has been assumed that this will incur a constraint on offshore wind development without cost to the sector.

3.9 Recreational Boating

3.9.1 Potential quantified negative economic impacts to the recreational boating sector are summarised in Table 18 at a DPO level under the maximum development scenario and Table 19 scaled at regional and national levels. These potential impacts are associated with the diversion of recreational boating vessels using RYA informal offshore cruising routes around the DPOs.

3.9.2 Should recreational boating activities be displaced from a region due to the development of offshore wind it is also recognised that there could be a secondary impact on the earnings of marinas, and therefore on future investment in marina facilities. These impacts cannot, however, be quantified.

Table 18 Potential negative economic impacts to recreational boating (present value of total costs over assessment period 2020-2059, £000s)

DPO	Maximum Development Scenario (GW)	Cost (£000s)	Cost per GW installed (£000s)
SW1	1	11.5	11.5
W1	2	5.3	2.6
N1	2	7.3	3.7
NE1	2	15.9	8.0
NE2	1	0.9	0.9
NE3	1	0.1	0.1
NE5	1	3.1	3.1
NE6	2	6.4	3.2
E3	1	0.3	0.3

Table 19 Potential negative economic impacts to recreational boating (present value of total costs over assessment period 2020-2059, £000s, scaled to regional and national scenarios)

Region	Lower Scenario (GW)	Lower Scenario (£000s)	Medium Scenario (GW)	Medium Scenario (£000s)	Upper Scenario (GW)	Upper Scenario (£000s)
South West	0.3	3.4	0.6	6.1	1	10.1
West	0.5	1.3	1	2.6	2	4.6
North	1	0.9	2	1.8	3	2.4
North East	1.5	3.0	3	5.1	4.5	7.7
East	1	0.1	2	0.1	3	0.1
National	3	4.9	5	7.8	10	16.1

3.9.3 Whilst there are impacts associated with a number of DPOs, the impacts themselves are low (maximum per DPO of £15.9k present value over the full assessment period), with the highest values in NE1 and SW1 both of which are shallower water sites closer to shore, intersected by multiple offshore cruising routes. It is, however, recognised that current evidence suggests that the majority of recreational vessels can transit safely through fixed-bottom wind farm arrays (which are likely to be located closer inshore), and hence the diversion costs presented above may be overestimates.

3.9.4 The limited scale of impact on recreational boating cruising routes suggests that secondary impacts on marinas will also be very minor.

3.10 Commercial Shipping

3.10.1 Potential quantified negative economic impacts to the commercial shipping sector are summarised in Table 20 at a DPO level under the maximum development scenario and

3.10.2 Table 21 scaled to regional and national levels. These potential impacts are associated with additional fuel costs based on requirements for commercial ships to divert around the DPOs.

3.10.3 The potential negative economic impacts to commercial shipping are significant and have the potential to cause difficulties in managing and consenting offshore wind developments within certain sites, particularly SW1 and NE6 where potential impacts are potentially greater than £10 million (present value over the assessment period). This is in context of the contribution that shipping made to the Scottish economy in 2015, or £3,600 million GVA^[41].

3.10.4 In the case of SW1, this is due to significant diversion of a high intensity route, which could be avoided through appropriate spatial planning of the site, using guidance in MGN 543 (MCA guidance on the Safety of Navigation: Offshore Renewable installations) to create safe shipping lanes through arrays.

Table 20 Potential negative economic impacts to commercial shipping (present value of total costs over assessment period 2020-2059, £000s)

DPO	Maximum Development Scenario (GW)	Cost (£000s)	Cost per GW installed (£000s)
SW1	1	12,319	12,319
W1	2	1,587	793
N1	2	8,889	4,444
N2	2	418	209
N3	2	318	159
N4	1	359	359
NE1	2	2,257	1,129
NE2	1	3,867	3,867
NE3	1	2,048	2,048
NE4	1	2,639	2,639
NE5	1	6,432	6,432
NE6	2	19,706	9,853
NE7	2	3,082	1,541
NE8	1	777	777
E1	3	1,516	505
E2	2	786	393
E3	1	3,128	3,128

Table 21 Potential negative economic impacts to commercial shipping (present value of total costs over assessment period 2020-2059, £000s, scaled to regional and national scenarios)

Region	Lower Scenario (GW)	Lower Scenario (£000s)	Medium Scenario (GW)	Medium Scenario (£000s)	Upper Scenario (GW)	Upper Scenario (£000s)
South West	0.3	3,696	0.6	6,506	1	10,844
West	0.5	397	1	793	2	1,397
North	1	1,255	2	2,511	3	3,307
North East	1.5	4,694	3	7,886	4.5	11,830
East	1	905	2	1,593	3	2,098
National	3	6,215	5	9,758	10	19,526

3.10.5 In the case of NE6, however, the potential for spatial planning is limited, and therefore impacts within this DPO may not be avoidable. In addition, although the overall potential cost is lower due to the smaller diversion, there is potentially a significant impact on commercial shipping from development within NE4, due to the overlap encompassing the main shipping route around Scotland, which again is unlikely to be mitigated by spatial planning within the DPO.

3.10.6 Any significant impacts on particular shipping routes have the potential to alter the economic case for trade into or out of certain ports. The impact of this has not been quantified as uncertainties are high, as no analysis of the source or destination of shipping transiting the DPO has been undertaken, and the potential for appropriate spatial planning within the DPOs could reduce impacts significantly.

3.11 Telecommunication Cables

3.11.1 There are no quantified potential negative economic impacts to the telecommunications sector that can be presented within this report. There is some overlap between NE4 and NE5 and a telecom cable, however it is assumed that this will constrain development to avoid interaction with the cable and leave an appropriate corridor such that no diversions are required when the cable is replaced.

3.11.2 There is significant uncertainty regarding the future development and routes of cables, therefore no assessment can be made regarding impacts on potential future telecommunication cable routes.

3.12 Tourism

3.12.1 Potential quantified negative economic impacts to the tourism sector are summarised in Table 22 at a DPO level under the maximum development scenario and Table 23 scaled to regional and national levels. These potential impacts are associated with the potential reduction in tourism expenditure due to tourists being deterred by the visual impacts of offshore wind turbines.

Table 22 Potential negative economic impacts to tourism (present value of total costs over assessment period 2020-2059, £000s)

DPO	Maximum Development Scenario (GW	Cost (£000s)	Cost per GW installed (£000s)
SW1	1	124.0	124.0
W1	2	292.4	146.2
N4	1	1,891.0	1,891.0
NE2	1	15.7	15.7

Table 23 Potential negative economic impacts to tourism (present value of total costs over assessment period 2020-2059, £000s, scaled to regional and national scenarios)

Region	Lower Scenario (GW)	Lower Scenario (£000s)	Medium Scenario (GW)	Medium Scenario (£000s)	Upper Scenario (GW)	Upper Scenario (£000s)
South West	0.3	39	0.6	65	1	109
West	0.5	100	1	190	2	334
North	1	238	2	475	3	626
North East	1.5	2	3	3	4.5	5
East	1	0	2	0	3	0
National	3	218	5	342	10	711

3.12.2 Due to the nature of the impact due to the visibility of the turbines from areas of land, the assessment has considered that impacts will only occur on land areas within 18 km of DPOs. The most significant potential effects are from N4 with an impact of reduced spend of £1.9 million (present value over the assessment period), due to the close proximity of the DPO to land, and the importance of tourism to the Outer Hebrides. This is a minor reduction in the total value of tourism in the Outer Hebrides (annual turnover). At a national scale, the impact in the high scenario of £711,000 over the assessment period is not considered to be significant to the tourism industry when considered in the context of the annual marine tourism turnover of £1,031 million (2016) in Scotland.

3.13 Water Sports

3.13.1 Potential quantified negative economic impacts to the watersports sector are summarised in Table 24 at a DPO level under the maximum development scenario and in Table 25 scaled to regional and national levels. These potential impacts are associated with the loss of sea area for recreational angling and relate to total spend by recreational anglers.

Table 24 Potential negative economic impacts to watersports (present value of total costs over assessment period 2020-2059, £000s)

DPO	Maximum Development Scenario (GW	Cost (£000s)	Cost per GW installed (£000s)
SW1	1	5,187	5,187
W1	2	3,159	1,579
N4	1	1,908	1,908

Table 25 Potential negative economic impacts to watersports (present value of total costs over assessment period 2020-2059, £000s, scaled to regional and national scenarios)

Region	Lower Scenario (GW)	Lower Scenario (£000s)	Medium Scenario (GW)	Medium Scenario (£000s)	Upper Scenario (GW)	Upper Scenario (£000s)
South West	0.3	1,556	0.6	2,740	1	4,566
West	0.5	790	1	1,580	2	2,781
North	1	240	2	480	3	632
North East	1.5	0	3	0	4.5	0
East	1	0	2	0	3	0
National	3	1,412	5	2,217	10	4,943

3.13.2 The majority of recreational angling is undertaken within 6 NM of land, therefore significant impacts are only assessed where a DPO is within this distance. Any potential impacts are therefore only likely to be seen at SW1, W1 and N4. The most significant impacts are estimated to be in SW1 with a potential cost of £5.2 million (present value over the assessment period), driven by the large area within 6 NM combined with high spend in the South West region on recreational boat angling.

3.13.3 In a worst-case scenario that 100% of the area within 6 NM in SW1 is developed, the impact of £547k per annum is approximately 1.7% of the total annual value of recreational angling in the region. Similarly, in W1 2.2% of the value of angling in the region could be impacted. It is unlikely that all of this would be lost, as some is likely to be displaced, or in reality may continue to occur within the DPO as the sea area is unlikely to be sterilised for sea angling by the development of an offshore wind array. Assuming recreational angling can continue within arrays once construction is completed, the impact is considered unlikely to be significant to the recreational angling sector in the region.

3.13.4 When considered nationally the significance is further reduced, as there are large areas within Scotland which would remain accessible for recreational sea angling. Therefore, even if displacement from a region is considered, this may not be lost to the national sector as a whole.

3.13.5 The potential impact on other watersports cannot be quantified, as there is little information available to determine the value of these watersports or the potential impact of offshore wind development. It is, however, recognised that areas inshore of the DPOs are known to be used for a variety of recreational activities including surfing, kitesurfing, windsurfing, stand up paddleboarding, kayaking and canoeing. These activities have the potential to be affected by development within the DPOs either directly through displacement from areas or through changes to wind or wave regimes inshore of the DPOs, as well as by changes to the environment during or following the construction of cable routes and landfalls. However, none of these impacts are likely to be economically significant either locally, regionally or nationally.