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
4 Potential Positive Economic Impacts

4 Potential Positive Economic Impacts

4.1 Introduction

4.1.1 The methodology for assessing the positive economic impacts derived from level of spend in wind farms is described in Section 2 above. This section provides the results from application of this method at the regional and national scales. The discussion follows the six steps of the assessment approach with full details of the calculations undertaken in each step set out in Appendix C.

4.2 Step 1: Spend per GW per year per activity

4.2.1 Each activity is likely to have a duration that exceeds one year, therefore, spend needs to be divided across the number of years that the activity is expected to take before it is completed. This is a simplification that assumes activity is equally spread across the durations given below:

  • Development and project management: activity duration of 10 years giving spend of £12 million per GW per year;
  • Wind turbine supply: activity duration of two years giving spend of £500 million per GW per year;
  • Balance of plant: activity duration of four years giving spend of £150 million per GW per year;
  • Installation and commissioning: activity duration of four years giving spend of £162.5 million per GW per year;
  • Operation, maintenance and service: £75 million per GW per year, with this being an annual level of spend assumed for 30 years (or until 2059 which is the end of the appraisal period).

4.3 Step 2: Spend retained per region

4.3.1 The retention rates for each region and nationally for now, 2030 and 2050 are summarised in Table 26.

Table 26 Retention rate assumptions per region and nationally across the study time period

Region Time East North East North West South West National
Development and project management Now 20% 0.1% 0.1% 1% 0.1% 1%
2030 40% 3% 3% 20% 3% 20%
2050 70% 5% 5% 40% 5% 40%
Wind turbine supply Now 3% 2% 2% 2% 3% 1%
2030 14% 12% 12% 12% 14% 20%
2050 25% 22% 22% 22% 25% 40%
Balance of plant Now 4% 50% 4% 3% 3% 4%
2030 23% 60% 23% 9% 9% 23%
2050 42% 70% 42% 15% 15% 42%
Installation and commissioning Now 2% 40% 2% 1% 1% 2%
2030 7% 60% 7% 6% 6% 7%
2050 12% 80% 12% 11% 11% 12%
Operation, maintenance and service Now 30% 14% 10% 10% 10% 14%
2030 50% 16% 11% 11% 11% 16%
2050 70% 18% 12% 12% 12% 18%

4.4 Step 3: Allocate spend over the appraisal time period

4.4.1 Total levels of spend have been assigned to the regional scenarios. The investments per scenario are set out in Table 27.

Table 27 Regional scenarios used as the basis for level of spend

Region Regional Low Scenario (GW) Regional Medium Scenario (GW) Regional High Scenario (GW)
East 1 2 3
North East 1.5 3 4.5
North 1 2 3
West 0.5 1 2
South West 0.3 0.6 1
Total (regional) 4.3 9.6 13.5
National (factored back) 3 5 10

4.4.2 As discussed in Section 2.1.3, it is assumed that spend is phased over the time period for the appraisal such that smaller levels of spending are made over a number of years. As such, total spend is built up from packages of 0.3 GW, 0.5 GW, 1 GW and 1.5 GW (2 GW at the national level) depending on the total level of spend that is projected to occur in a region. Spend is phased to occur in a reasonably regular pattern and in sensible sized packages. For example, 1 GW is assigned as two 0.5 GW packages in 2030 and 2035 for the North region, low scenario and South West region, medium scenario.

4.5 Step 4: GVA per Region

4.5.1 The GVA effects used are shown in Table 28. This is applied to the projected level of spend retained in each region to enable an estimate to be made of direct and indirect GVA impacts (Type I) and direct, indirect and induced GVA impacts (Type II). The Type I and Type II GVA effects have been applied to the change in output to calculate the change in GVA for the economy as a whole[42]. Direct GVA impacts per region are estimated by taking the output (from level of spend) and multiplying it by the GVA:output ratio (calculated by dividing GVA by total output from each sector). The values used are taken from the combined use table of the Scottish input-output multipliers[43].

Table 28 GVA effect used to estimate GVA impacts per activity

Region SIC code GVA effect
Type I Type II
Development and project management 71 0.7 0.9
Wind turbine supply 28 0.5 0.6
Balance of plant 41-43 0.7 0.8
Installation and commissioning 41-44 0.7 0.8
Operation, maintenance and service 33 0.7 0.9
Source: Scottish input output multipliers, see: https://www2.gov.scot/Topics/Statistics/Browse/Economy/Input-Output/Mulitipliers

4.5.2 The GVA impacts on Scotland from projected spend in present value (PV) terms from 2020 to 2059 are estimated as shown in Table 29. Direct GVA PV impacts range from £18 million in the South West (low) to £1,277 million (high) in the North East. Nationally, direct GVA PV impacts rage from £328 million (low) to £1,120 million (high). When the GVA effect is applied (which enables indirect, Type I, and induced, Type II, GVA impacts to be included), the largest regional impacts are seen in the North East, with a range from £645 million (low scenario of 1.5 GW) to £1,921 million (high scenario of 4.5 GW) for Type I and from £760 million (low scenario) to £2,259 million (high scenario) for Type II. The smallest impacts are seen in the West and South West. The South West has the smallest GVA impacts both under the low scenario (£30 million to £38 million, Type I) and under the high scenario (£121 million to £149 million, Type II). This is a function of both the assumed scale of development and retention rates.

4.5.3 The annual maximum GVA (undiscounted) in each region and nationally are presented in Table 30 for each region and scenario and for direct, Type I and Type II GVA impacts. The figures reflect the maximum GVA in any one year and so show the peak impacts, rather than total impacts as in Table 29. In some cases, e.g. South West the peak impacts are much closer in terms of range between low scenario and high scenario (£1.6 millin direct GVA impacts, £2.6 million under the Type I, low scenario, to £21 million under the Type II, high scenario) than for the range of total GVA across all years. In other regions, e.g. West, the range is much higher (£2.2 million direct GVA impacts, £3.4 million under the Type I, low scenario, to £40 million under the Type II, high scenario). This is a reflection of the spend profile and how many of the activities are undertaken in any one year. In the North East, all five activities are being undertaken simultaneously for at least one year in the appraisal timeframe under the low, medium and high scenarios. For the West region, the low scenario has a maximum of four activities being undertaken simultaneously under the low scenario but all five under the high scenario.

Table 29 GVA impacts in Present Value (discounted) terms by region and nationally (Direct, Type I (direct, indirect) and Type II (direct, indirect, induced)) (£ millions)

Scenario East North -east North West South- west National
Low, Direct £235 £429 £88 £30 £18 £328
Low, Type I £389 £645 £139 £49 £30 £515
Low, Type II £497 £760 £170 £61 £38 £631
Medium, Direct £486 £852 £177 £60 £45 £560
Medium, Type I £790 £1,280 £278 £98 £72 £874
Medium, Type II £997 £1,506 £339 £123 £89 £1,069
High, Direct £683 £1,277 £269 £149 £74 £1,120
High, Type I £1,103 £1,921 £420 £239 £121 £1,748
High, Type II £1,386 £2,259 £497 £288 £149 £2,137

Table 30 Maximum GVA impacts in any one year in Present Value (discounted) terms by region and nationally (Type I and Type II) (£ millions)

Scenario East North East North West South- west National
Low, Direct £12 £54 £14 £2.2 £1.6 £30
Low, Type I £20 £77 £21 £3.4 £2.6 £46
Low, Type II £26 £88 £25 £4.0 £3.1 £54
Medium, Direct £38 £73 £27 £4.5 £7 £46
Medium, Type I £60 £109 £42 £6.9 £11 £69
Medium, Type II £72 £126 £50 £8.1 £13 £81
High, Direct £40 £109 £27 £21 £11 £93
High, Type I £64 £163 £42 £33 £18 £138
High, Type II £78 £189 £50 £40 £21 £162

4.5.4 The estimated GVA impacts can be compared with the GVA identified for energy (including renewables) for growth sectors based on data from Scotland’s Economic Strategy to put the additional GVA projected to be generated from 2020 to 2059 into context. The GVA for 2016 for the energy (including renewables) sector was:

  • East: £9,736 million, with maximum GVA impacts in any one year between 2020 and 2059 accounting for less than 1% even on the high scenario Type II;
  • North East: £347 million, with maximum GVA impacts in any one year between 2020 and 2059 under the high scenario Type II equivalent to 54% of GVA in 2016;
  • North: £96 million, with maximum GVA impacts in any one year between 2020 and 2059 under the high scenario Type II equivalent to 52% of GVA in 2016;
  • West: £1,112 million, with maximum GVA impacts in any one year between 2020 and 2059 accounting for less than 4% even on the high scenario Type II;
  • South West: £170 million, with maximum GVA impacts in any one year between 2020 and 2059 under the high scenario Type II equivalent to 12% of GVA in 2016;
  • Scotland: £12,948 million[44], with maximum GVA impacts in any one year between 2020 and 2059 under the high scenario Type II equivalent to 1% of GVA in 2016.

4.5.5 Figure 5 shows how the Type II, GVA impacts vary over time. The Type II GVA impacts shown here are undiscounted to show the trend, in nominal value terms, and avoid the effect of discounting on future impacts. The figure shows the high Type II GVA impacts in the North East, which relate to the higher retention factors identified for this region for balance of plant and installation and commissioning. The national values are lower than the sum of the regional values due to factoring back at the national level to a lower level of spend (3 GW, 5 GW and 10 GW across the three scenarios) compared with the sum of spend at regional levels (4.3 GW, 8.6 GW and 13.5 GW). The results for the South West and West regions are very similar, with the South West masked by the West in Figure 5.

4.5.6 Figure 6 presents the national impacts for the low, medium and high scenario for the direct, Type I and Type II GVA impacts. The figure shows how the peaks under the high and medium scenarios are much higher than under the low scenario. This reflects the timing of spend. A smoother spend profile could help encourage growth of the supply chain and hence retention of more positive impacts in Scotland. The GVA impacts under the medium scenario are lower than those seen in the low scenario in years 2033 and 2039. This is due to a change in the timing of spending between the low and medium scenarios.

Figure 5 Timing and pattern of Type II, GVA impacts for the Low scenario (National impacts are shown in block colour with regional impacts super-imposed. West and South West show very similar timing and magnitude of impacts)

Figure 5 Timing and pattern of Type II, GVA impacts for the Low scenario (National impacts are shown in block colour with regional impacts super-imposed. West and South West show very similar timing and magnitude of impacts)

Figure 6 Timing and pattern of GVA impacts for all three scenarios at the national level

Figure 6 Timing and pattern of GVA impacts for all three scenarios at the national level

4.6 Step 5: Employment per Region

4.6.1 The employment effect multipliers are used to estimate positive employment impacts. The employment effects set out in Table 31 are used with the estimated change in output to provide an indication of the full-time equivalent (FTE) impacts that would be generated within each region and nationally. As with GVA, the direct, direct and indirect (Type I) and direct, indirect and induced (Type II) impacts are estimated. Direct jobs are estimated by dividing the Type II (direct, indirect and induced jobs) by the employment multiplier from the Scottish Input-Output multipliers (with this varying from 1.7 to 1.8 across the five activity types).

Table 31 Employment effect used to estimate employment impacts per activity

Activity SIC code Employment effect Employment multiplier
Type I Type II Type I Type II
Development and project management 71 12.2 14.5 1.5 1.8
Wind turbine supply 28 9.8 11.8 1.4 1.7
Balance of plant 41-43 12.3 14.4 1.6 1.8
Installation and commissioning 41-44 12.3 14.4 1.6 1.8
Operation, maintenance and service 33 9.2 11.3 1.4 1.8
Source: Scottish input output multipliers, see: https://www2.gov.scot/Topics/Statistics/Browse/Economy/Input-Output/Mulitipliers

4.6.2 Employment impacts are estimated based on undiscounted spend that is retained in each region or nationally (with the use of the same retention rates used to calculate the GVA impacts for the sake of consistency). Table 32 presents the maximum number of jobs in any one year for each region and scenario and for both Type I and Type II employment impacts.

Table 32 Maximum employment impacts in any one year by region and nationally (Type I and Type II) (FTEs)

Scenario East North East North West South West National
Low, Direct 247 938 296 41 31 696
Low, Type I 282 1,255 373 51 38 864
Low, Type II 444 1,684 521 71 53 1,229
Medium, Direct 832 1,588 593 82 147 1,075
Medium, Type I 1,020 2,066 745 103 180 1,357
Medium, Type II 1,468 2,834 1,042 143 256 1,911
High, Direct 1,044 2,382 639 463 245 2,151
High, Type I 1,262 3,099 798 568 300 2,714
High, Type II 1,849 4,250 1,126 808 426 3,821

4.6.3 This can be compared with statistics on the number of unemployed people within each region (statistics used from 2018 Q4):

  • East: 42,650 unemployed, or potential jobs for up to 4.3% of those currently unemployed (based on high scenario, Type II);
  • North East: 6,000 unemployed, or potential jobs for 28% to 71% of those currently unemployed (based on low scenario, Type II to high scenario, Type II);
  • North: 8,000 unemployed, or potential jobs for 7% to 14% of those currently unemployed (based on low scenario, Type II to high scenario, Type II);
  • West: 38,150 unemployed, or potential jobs for up to 2.1% of those currently unemployed (based on high scenario, Type II);
  • South West: 19,600 unemployed, or potential for up to 2.2% of those currently unemployed (based on high scenario, Type II);
  • National: 114,400 unemployed, or potential for around 3% of those currently unemployed (based on high scenario, Type II).

4.6.4 It is important to consider the types of jobs being created and the skill levels required. Jobs related to development and project management are more likely to be highly skilled covering activities such as wind farm design, surveys and related projects. Some of the construction activities may be lower skilled, although many will also involve highly skilled activities or application of what may be perceived to be lower skilled operations in offshore locations. Operation, maintenance and service is also likely to require skilled operation. Energy & Utility Skills (2018)[45] identifies skills crucial to offshore wind development and deployment as:

  • Asset management;
  • Project management;
  • Leadership;
  • Engineering and technical skills (mechanical, electrical, control & instrumentation, blade and turbine technicians);
  • Scientists (including marine biology, geophysics, hydrography, oceanography);
  • Advanced first aid and rescue;
  • Offshore-specific skills (including confined spaces, working at heights, team working, team living).

4.6.5 The types of skills identified above would be the main ones required and so will need a minimum level of pre-existing skills or training should local people without those specific skills be employed. Further discussion on the implications in terms of jobs is considered in Step 6, where the potential for local and relocated jobs is estimated.

4.6.6 The pattern and timing of estimated employment impacts are shown in Figure 7. This shows that employment impacts are larger in the North East region. The East and North regions show similar levels and timing of employment impacts which may have implications in terms of the ability of businesses to attract workers to relocate, unless these workers come from other regions or even from outside of Scotland.

4.6.7 Figure 8 presents a detailed breakdown of the Type I and Type II employment impacts for the North East region. The Figure shows that there is very little difference in employment impacts between 2026 and 2029 under the low and medium scenarios, with this reflecting differences in timing of spend. The Type II impacts under the medium scenario are also very similar to the Type I impacts under the high scenario.

Figure 7 Timing and pattern of Type I employment impacts for the Medium scenario (National impacts are shown in block colour with regional impacts super-imposed)

Figure 7 Timing and pattern of Type I employment impacts for the Medium scenario (National impacts are shown in block colour with regional impacts super-imposed)

Figure 8 Timing and pattern of Direct, Type I and Type II employment impacts for the North East region, all scenarios

Figure 8 Timing and pattern of Direct, Type I and Type II employment impacts for the North East region, all scenarios

4.7 Step 6: Local jobs and displacement

4.7.1 The division of jobs into jobs for local people, and jobs for people relocating, is important as an input to the social and distributional impacts assessment. Table 33 presents the maximum number of local and relocated jobs per region by scenario. Table 34 then considers the percentage of the local jobs that could be provided to those who are currently unemployed in each region (note this does not reflect the likely skill level required to fill each job and covers unemployment in the region as a whole, when the jobs themselves may be more likely to be located in coastal areas). Table 34 shows that in most regions the additional jobs should be filled through those currently unemployed, although there may be some displacement from other sectors, especially in the North East and North regions.

4.7.2 In many regions, the maximum number of jobs supported or created in any one year is related to construction, although if total jobs is measured in job-years[46] rather than maximum number of jobs in any year, then the majority of jobs are related to operational activities. North East region has the highest proportion of construction jobs with these outweighing the number of job-years supported during operational activities. For all other regions, the majority of job-years are associated with operations. This is usually because operational jobs last for a number of years, while construction jobs are more short-lived. North East has construction over the 12 years in total, with this continuing from 2028 for 12 years out of the total timeframe of 40 years. For the other regions, construction generally occurs for a maximum of 8 years (and in some cases, especially the low scenarios, for just 4 years).

4.7.3 Displacement is an important effect that needs to be considered for estimating the net effects on employment. For local jobs, this could be displacement due to local people changing jobs to work in the wind farm industry, with these jobs then replacing the job that they previously held. For those moving into a region to take up a job, displacement could be from another job in another region in Scotland or from a region outside Scotland. In areas where the oil and gas industry has been an important employer, any decline in oil and gas activity could mean that individuals with the necessary skills become available without causing displacement. There could be competition for skills with any increase in decommissioning activities associated with oil and gas installations. Oil and gas workers also tend to be very mobile so could take up employment in wind farm related jobs in any of the regions.

Table 33 Maximum local and relocated employment impacts in any one year by region and nationally (Type I and Type II) (FTEs)

Scenario East North East North
Local Relocated Local Relocated Local Relocated
Low, Direct 62 185 234 703 74 222
Low, Type I 71 212 314 941 93 279
Low, Type II 111 333 421 1,063 130 391
Medium, Direct 208 624 397 1,191 148 445
Medium, Type I 255 765 517 1,550 186 559
Medium, Type II 367 1,101 708 2,125 260 781
High, Direct 261 783 596 1,787 160 479
High, Type I 315 946 775 2,324 200 599
High, Type II 462 1,387 1,063 3,188 281 844
Scenario West South West National
Local Relocated Local Relocated Local Relocated
Low, Direct 10 31 8 23 174 522
Low, Type I 13 39 9 28 216 648
Low, Type II 18 54 13 40 307 922
Medium, Direct 20 61 37 110 269 806
Medium, Type I 26 77 45 135 339 1,018
Medium, Type II 36 107 64 192 478 1,433
High, Direct 116 347 61 184 538 1,613
High, Type I 142 426 75 225 678 2,035
High, Type II 202 606 107 320 955 2,866

Table 34 Potential for additional local FTEs to be filled by those currently unemployed (based on numbers unemployed only)

Scenario East North East North West South West National
Low, Direct 0.1% 3.9% 0.9% 0.03% 0.02% 0.2%
Low, Type I 0.2% 5.2% 1.2% 0.03% 0.02% 0.2%
Low, Type II 0.3% 7.0% 1.6% 0.04% 0.1% 0.3%
Medium, Direct 0.5% 6.6% 1.9% 0.1% 0.2% 0.2%
Medium, Type I 0.6% 8.6% 2.3% 0.1% 0.2% 0.3%
Medium, Type II 0.9% 11.8% 3.3% 0.1% 0.3% 0.4%
High, Direct 0.6% 9.9% 2.0% 0.3% 0.3% 0.5%
High, Type I 0.7% 12.9% 2.5% 0.4% 0.4% 0.6%
High, Type II 1.1% 17.7% 3.5% 0.5% 0.5% 0.8%

4.8 Sensitivity analysis: leakage

4.8.1 No account is taken of the potential for leakage from one region to another in the main assessment. For example, it might be expected that spend would be retained in the North and North East regions as a result of spend in the West and South West. Equally, spend in the West and South West could also leak to England or Ireland. The sensitivity test assesses how spend associated with West region might increase if some retention is also assumed in North East and North regions. Retention rates in the West region are assumed to remain the same as in the main appraisal. Additional retention is assumed in North and North East region at 50% of the original retention rates where these have been identified as mid or upper in the main appraisal. These are summarised in Table 35. Total retention assumed across all regions is then:

  • Development and project management: 1% now increasing to 20% in 2030 based on retention in West only due to low capacity in North East and North regions;
  • Wind turbine supply: 2% now increasing to 12% in 2030 based on retention in West only due to low capacity in North East and North regions;
  • Balance of plant: 3% in West region plus 25% in North East region and 2% in North region giving a total of 30% now. This increases to 9% in West region plus 30% in North East region and 11.5% in North region giving a total of 50.5% in 2030;
  • Installation and commissioning: 1% in West region plus 20% in North East region and 1% in North region giving a total of 22% now. This increases to 6% in West region plus 30% in North East region and 3.5% in North region giving a total of 39.5% in 2030;
  • Operation, maintenance and service: 10% in West region plus 7% in North East region giving a total of 17% now. This increases to 11% in West region plus 8% in North East region giving a total of 19% in 2030.

4.8.2 The impacts on GVA are summarised in Table 36 and show the total GVA that would be generated in each region due to spend in the West region generating supply side impacts in the North East and North regions, rather than the assumption used in the main appraisal that all spend not retained in the West leaks outside of Scotland. Assuming 50% of leakage to other regions in Scotland may be high but is used here to give an indication of the potential additional GVA that could be generated due to the more developed supply chains in the North East and North regions. The sensitivity shows that significant additional GVA is generated in North East and North regions.

Table 35 Retention factors used to capture potential leakage effects on other regions of Scotland from spend in the West

Region Time East North East North West South West
Development and project management Now - - - 1% -
2030 - - - 20% -
2050 - - - 40% -
Wind turbine supply Now - - - 2% -
2030 - - - 12% -
2050 - - - 22% -
Balance of plant Now - 25% 2% 3% -
2030 - 30% 11.5% 9% -
2050 - 35% 21% 15% -
Installation and commissioning Now - 20% 1% 1% -
2030 - 30% 3.5% 6% -
2050 - 40% 6% 11% -
Operation, maintenance and service Now - 7% - 10% -
2030 - 8% - 11% -
2050 - 9% - 12% -

Table 36 GVA impacts in present value (discounted) terms by region based on leakage of spend in West region into North East and North regions rather than outside of Scotland (Direct, Type I and Type II) (£ millions)

Scenario East North East North West South West
Low, Direct £0 £206 £18 £30 £0
Low, Type I £0 £309 £25 £49 £0
Low, Type II £0 £364 £29 £61 £0
Medium, Direct £0 £402 £36 £60 £0
Medium, Type I £0 £600 £50 £98 £0
Medium, Type II £0 £705 £57 £123 £0
High, Direct £0 £603 £60 £149 £0
High, Type I £0 £900 £84 £239 £0
High, Type II £0 £1,057 £96 £288 £0

4.8.3 Employment impacts are estimated based on the employment effect multiplier as for the main appraisal. The results, in terms of maximum number of jobs generated in each region over the appraisal timeframe are shown in Table 37. The number of jobs shown as being created may over-estimate total job gains as there may be some efficiencies within companies in the North East and North regions such that actual increases in job numbers are not the sum of the jobs created from direct spend into North East and North plus leaked spend from the West region. There may also be capacity issues in the North East in terms of the extent to which the supply chain is able to deliver additional spend leaking from the West region. As a result, the impacts may be smaller than those suggested in Table 37 with leakage outside North East region due to capacity constraints.

Table 37 Maximum employment impacts in any one year by region based on leakage of spend in West region into North East and North regions rather than outside of Scotland (Type I and Type II) (FTEs)

Scenario East North East North West South West
Low, Direct 0 448 73 41 0
Low, Type I 0 603 99 51 0
Low, Type II 0 806 132 42 0
Medium, Direct 0 668 147 82 0
Medium, Type I 0 884 197 103 0
Medium, Type II 0 1,202 264 84 0
High, Direct 0 1,002 147 463 0
High, Type I 0 1,327 197 568 0
High, Type II 0 1,803 264 352 0

4.9 Sensitivity analysis: reducing costs of technology over time

4.9.1 The costs per activity are based on BVG (2019) but do not take account of potential efficiencies that could occur as development proceeds. This could result in the costs per GW decreasing over time. The impacts of reducing costs per activity are tested by assuming that the costs per GW decline by 2% per year from 2021. This means that the costs decline as follows for each activity:

  • Development and project management: £120 million per GW in 2020 declining to £100 million per GW in 2030;
  • Wind turbine supply: £1,000 million per GW in 2020 declining to £833 million per GW in 2030;
  • Balance of plant: £600 million per GW in 2020 declining to £500 million per GW in 2030;
  • Installation and commissioning: £650 million per GW in 2020 declining to £540 million per GW in 2030;
  • Operation, maintenance and service: £75 million per GW per year in 2020 declining to £63 million per GW in 2030.

4.9.2 The impact of assuming efficiencies and cost reductions as investment continues in Scotland and elsewhere means that total GVA and employment impacts reduce over time. Table 38 presents the discounted (Present Value) total GVA impacts over the appraisal timeframe (2020-2059) for each region and nationally. Table 38 also shows the reduction in GVA from the main appraisal. The percentage change in total GVA impacts ranges from –19% (low, Direct, North East and low, Type I, North East) to -33% (High, Type II, East).

Table 38 GVA impacts in Present Value (discounted) terms by region and nationally (Type I and Type II) based on costs reducing by 2% per year from 2021 onwards due to efficiencies and cost savings (£ millions)

Scenario East North East North West South West National
Low, Direct £165 £348 £65 £21 £13 £233
-30% -19% -26% -28% -28% -29%
Low, Type I £271 £519 £102 £35 £21 £362
-30% -19% -27% -28% -28% -30%
Low, Type II £345 £609 £123 £44 £27 £442
-31% -20% -27% -29% -28% -30%
Medium, Direct £338 £662 £130 £43 £32 £396
-30% -22% -26% -28% -28% -29%
Medium, Type I £546 £990 £203 £70 £52 £613
-31% -23% -27% -28% -28% -30%
Medium, Type II £687 £1,160 £247 £88 £64 £747
-31% -23% -27% -29% -28% -30%
High, Direct £466 £994 £193 £108 £54 £792
-32% -22% -28% -28% -28% -29%
High, Type I £746 £1,486 £299 £172 £87 £1,227
-32% -23% -29% -28% -28% -30%
High, Type II £935 £1,740 £355 £208 £107 £1,493
-33% -23% -29% -28% -28% -30%

4.9.3 Since the total costs reduce over time, the employment impacts in terms of gain in number of jobs will consequently reduce. Table 39 presents the maximum number of jobs created in any one year, with the change from the main appraisal. The largest decrease is seen in the East (29% for the high scenario, Direct, Type I and Type II) mirroring that this region also saw the largest decrease in total GVA impacts. The smallest reductions (-13%) are seen in the North East (low, Direct and Type I) West (low and medium, Direct, Type I and Type II) and South West regions (low, Direct and Type I). This reflects the North East showing the smallest reduction in GVA (low, Direct and Type I) and timing of activities associated with the largest number of jobs created per £1 million (balance of plant and installation and commissioning) for which both West and South West have lower retention rates, while the other regions have mid or upper retention rates for these two activities.

Table 39 Maximum employment impacts in any one year by region and nationally (Type I and Type II) (FTEs)

Scenario East North East North West South West National
Low, Direct 206 814 233 35 27 507
-17% -13% -22% -13% -13% -27%
Low, Type I 236 1,090 292 45 33 633
-17% -13% -22% -13% -13% -27%
Low, Type II 370 1,462 409 62 46 893
-22% -23% -22% -13% -22% -28%
Medium, Direct 653 1,219 465 71 115 772
-22% -23% -22% -13% -22% -28%
Medium, Type I 801 1,595 585 89 141 980
-22% -23% -22% -13% -22% -28%
Medium, Type II 1,152 2,175 818 124 201 1,371
-22% -23% -22% -13% -22% -28%
High, Direct 740 1,829 467 363 192 1,545
-29% -23% -27% -22% -22% -28%
High, Type I 895 2,392 587 446 235 1,959
-29% -23% -26% -22% -22% -28%
High, Type II 1,312 3,262 821 634 334 2,743
-29% -23% -27% -22% -22% -28%

Contact

Email: drew.milne@gov.scot