Publication - Progress report

Draft Sectoral Marine Plans for Offshore Renewable Energy in Scottish Waters: Socio - Economic Assesment

Published: 25 Jul 2013
Part of:
Marine and fisheries
ISBN:
9781782567509

The study reported here provides a high level socio-economic appraisal of the potential costs and benefits to activities that may arise as a result of offshore wind, wave or tidal development within the Draft Plan Options as part of possible future Scotti

383 page PDF

4.7 MB

383 page PDF

4.7 MB

Contents
Draft Sectoral Marine Plans for Offshore Renewable Energy in Scottish Waters: Socio - Economic Assesment
2. Methodology

383 page PDF

4.7 MB

2. Methodology

2.1 Introduction

The methodology to inform the assessment has built on previous work to assess the socio-economic impacts of offshore renewables including ABPmer et al, 2011; ABPmer & RPA, 2012a; ABPmer & RPA, 2012b and previous EIAs for offshore renewables, and follows wider guidance on impact assessment (Scottish Government guidance on Business and Regulatory Impact Assessment [8] , Better Regulation Executive guidance on impact assessment [9] and the Green Book methodology ( HM Treasury, 2003).

The methodology described below covers:

  • The approach to defining scenarios;
  • Establishing a baseline against which impacts can be assessed;
  • Approach to quantification of socio-economic impacts; and
  • Estimating costs and benefits in terms of impacts on Gross Value Added ( GVA) and employment.

2.2 Approach to Development of Scenarios

The Draft Plan Option areas for offshore wind, wave and tidal development 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 was necessary to make assumptions about the potential scale (potential installed capacity), nature (the types of technologies) and timing of possible development within these Draft Plan Option areas. Possible socio-economic impacts associated with array export cables, have also been taken into account.

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 Draft Plan Option areas, 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 costs and benefits associated with offshore wind, wave and tidal development within the Draft Plan Option areas.

2.2.1 Developing Scenarios Relating to the Potential Scale of Future Development

There are currently few long-term projections for potential future offshore wind, wave and tidal development beyond 2020, which is the period in which development within the Draft Plan Option areas might be expected to largely occur [10] .

Within Scottish Territorial Waters, there is potential development to install up to 4.4 GW capacity of offshore wind in five short-term option sites (Argyll Array, Beatrice, Inch Cape, Islay, Neart na Gaoithe), together with a further 4.8 GW capacity within two Round 3 sites (Moray and Firth of Forth). Scottish Government (2012) provides projections for 'offshore and onshore' wind of 13,000 MW installed capacity by 2020 and 16,500 MW installed capacity by 2030.

Agreements for lease have been issued for around 2 GW of installed capacity for wave and tidal technology, mostly associated with The Crown Estate leasing round for Pentland Firth and Orkney Waters with additional capacity in the Western Isles and Shetland. Existing projections for wave and tidal development in UK waters to 2020 variously identify potential deployments of 1-2 GW (Entec, 2009); 1-2 GW ( DECC, 2010); and 200-300 MW ( DECC cited in House of Commons Energy and Climate Change Select Committee, February, 2012). Scottish Government (2012) estimates some 700 MW of wave and tidal capacity will be installed in Scottish waters by 2020, rising to 1,770 MW by 2030.

Based on the above estimates, three scenarios (termed 'Low Case', 'Central Case' and 'High Case') have been developed for the purposes of this study relating to different scales of possible future offshore wind, wave and tidal development within the Draft Plan Option areas in the period 2020 to 2030 as follows (in terms of additional capacity beyond existing lease agreements):

  • Offshore wind
    • Low Case: 3 GW installed capacity
    • Central Case: 7 GW installed capacity
    • High Case: 15 GW installed capacity
  • Wave
    • Low Case: 0.5 GW installed capacity
    • Central Case: 1.25 GW installed capacity
    • High Case: 2.5 GW installed capacity
  • Tidal
    • Low Case: 0.5 GW installed capacity
    • Central Case: 1.25 GW installed capacity
    • High Case: 2.5 GW installed capacity

The potential installed capacities were assigned to individual Draft Plan Option areas using the following rules and as shown in Table 1:

  • Areas already subject to 'Agreement for Lease' located within the Draft Plan Option areas were removed from the analysis (reducing the available Draft Plan Option areas);
  • The 'target' installed capacities for offshore wind, wave and tidal development under the 3 scenarios were then applied pro rata to the size of the Draft Plan Option area to achieve the same percentage occupancy (proportion of Draft Plan Option area occupied by arrays) across each Draft Plan Option area based on the following assumptions:
    • 7.6 MW installed offshore wind capacity occupies 1km 2 (based on BOWL, 2012)
    • 25 MW installed wave capacity occupies 1km 2 ( AEA Technology and Hartley Anderson 2011)
    • 25 MW installed tidal stream capacity occupies 1km 2 ( AEA Technology and Hartley Anderson 2011)
  • These allocations were then adjusted where necessary to ensure that the following minimum sizes for arrays were met in each Draft Plan Option area:
    • Offshore wind - 100 MW;
    • Wave - 30 MW; and
    • Tidal - 30 MW.

Table 1. Indicative Occupancy of Draft Option Plan Areas

Scenario Offshore Wind (%) Wave (%) Tidal (%)
Low Case 4.8 - 26.5 0.2 - 0.6 0.8 - 2.5
Central Case 11.6 - 26.5 0.5 - 0.6 2.6
High Case 25.1 - 26.5 1 5.1

It is recognised that the scale of development within individual Draft Plan Option areas may vary and is unlikely to be proportional to the size of area in every (or even any) case. However, for the purposes of this assessment, it is important that realistic scales of development are considered in each Draft Plan Option area. Based on the Scottish Government (2012) projections for the period 2020 to 2030, the aggregate levels of offshore wind, wave and tidal development required to deliver these projections would be broadly similar to the Low Case scenario. However, it is helpful to consider higher levels of potential development, particularly given that the scales of actual development within individual Draft Plan Option areas are likely to vary. Thus, the higher scenarios, while they may be unrealistic in aggregate, help to identify possible capacity constraints and how different scales of development within Draft Plan Option areas might give rise to differing levels of socio-economic impact. It should be noted that although SG provided direction, the scenarios used are hypothetical and are not a formal commitment or statement of policy.

2.2.2 Consideration of Possible Future Technologies

There is currently significant uncertainty concerning the nature of possible future offshore wind, wave and tidal technologies that will be deployed and the methods of their construction. In particular, the development of wave and tidal technologies is at an early stage and it remains unclear which technologies might be taken forward to full scale deployment. Similarly, construction methods for offshore wind developments may change over time.

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. It has therefore been assumed for the purposes of this study that the socio-economic impacts associated with offshore wind, wave and tidal development will not vary significantly as a result of different technology choices for exploiting wind, wave and tidal resources. While this is recognised as an oversimplification, it is noted that many of the potentially most significant socio-economic impacts arise as a result of competition for sea space and this is not expected to vary significantly as a function of technology choice. This issue has been addressed in the assessment of interactions between wave and tidal devices and commercial navigation (see Appendix B).

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. See section 2.4 for more information on how uncertainty concerning potential impacts has been taken into account in the assessment.

2.2.3 Developing an Indicative Programme

The timing of possible development within individual Draft Plan Option areas is particularly uncertain. The assumption has been that the draft Plans will look to enable development within the period 2020 to 2030. Assuming Plan adoption in late 2013/early 2014, it is possible that consenting could be completed in some Areas within 4 years with construction in these areas starting as early as 2018, and for those schemes to become operational by 2020. However, given that the draft Plans are seeking to facilitate development within the period 2020 to 2030 and given the uncertainty surrounding the precise timing of development, it has been assumed for the purposes of this assessment that all construction will commence in 2023 and that all developments will become operational in 2025. While this is a simplification, for impact assessment purposes it is likely to provide a broadly similar assessment of costs and benefits to an assumption that evenly distributes development over the period 2020 to 2030. Separate commentary has been provided in the discussion of the results concerning how costs and benefits might vary with different assumptions on the phasing of development.

2.2.4 Taking Account of Cable Routes

There is currently a high level of uncertainty concerning the possible location and number of export cables associated with potential development within the proposed Draft Plan Option areas. These requirements will depend on the scale and location of development within the Draft Plan Option areas and the future development of grid connection points (both onshore and offshore). Some information is available from National Grid (2011) on potential and planned land-side grid connections. However, it is still challenging to predict the precise routes for export cable corridors. Given these uncertainties, the approach adopted in this study has generally been to identify all areas inshore of the Draft Plan Option areas as potential export cable route corridors unless there is a clear cable landfall point indicated by current and/or planned grid connection points (see Figures 1 to 3). The same export cable route corridors have been identified for each of the three scenarios as these would not be expected to vary significantly as a result of changing the intensity of development within each Draft Plan Option area.

2.3 Establishing a Baseline

ABPmer & RPA (2012a) collated baseline information on a wide range of marine activities that may potentially interact with offshore renewables development in Scottish Waters, including:

  • Aquaculture (finfish and shellfish);
  • Aviation;
  • Carbon Capture and Storage;
  • Coast Protection and Flood Defence;
  • Commercial Fisheries (including salmon and sea trout);
  • Energy Generation (this will need to cover interactions between different offshore energy devices);
  • Military Interests;
  • Oil and Gas (including exploration, production, interconnectors, gas storage);
  • Ports and Harbours;
  • Power Interconnectors (including offshore transmission networks);
  • Recreational Boating;
  • Shipping;
  • Social Impacts;
  • Telecom Cables;
  • Tourism (including heritage assets);
  • Waste Disposal (dredge material); and
  • Water Sports (including sea angling, surfing and windsurfing, sea kayaking, small sail boat activities and scuba diving and).

This study has provided the main baseline information on which the assessment has drawn. In addition, information has been obtained from a number of additional sources where available, including:

  • Additional fisheries data provided by Marine Scotland including provisional outputs from the Scotmap project for inshore fisheries (vessels <15m);
  • Information on shipping density around the Scottish coast for 2008 (provided by the Maritime & Coastguard Agency); and
  • Information on helicopter main routes (from National Air Traffic Services)

Some additional baseline information was also obtained through consultation with relevant stakeholders, for example, additional information on recreational boating activity. A series of tables in Appendix B summarise the baseline information sources on which the assessment has drawn (largely based on ABPmer & RPA, 2012a).

The baseline information presented in ABPmer & RPA (2012a) relates to a base year of between 2008 and 2010. Where necessary, this information has been rolled forward to 2012 to provide a consistent base year for the study using Treasury's GDP deflator and taking account of any projected trends in the levels of activity identified in ABPmer & RPA (2012a). The baseline information was then further adjusted beyond the base year through the period of study to take account of any projected trends in the levels of activity to create a future baseline. Further details are provided in the sector specific methodologies in Appendix B. Where relevant the baseline data series have been presented in the relevant sectoral assessments in Appendix C.

2.4 Approach to Quantification of Economic and Social Impacts

2.4.1 Introduction

The potential for offshore wind, wave and tidal development arrays and export cables to give rise to socio-economic impacts on other activities depends on the nature and scale of interactions between them. The approach adopted here has therefore been to seek to define the potential interactions and to identify those interactions which have the potential to give rise to significant socio-economic impacts drawing on relevant previous studies and taking account of specific factors relevant to each Draft Plan Option area. Where potentially significant socio-economic impacts are identified, methods for quantifying these impacts have been applied taking account of information availability ( Appendix B).

To identify the potential for significant socio-economic impacts to occur, a simple scoping process was undertaken which takes account of:

  • Whether the activity occurs within the relevant offshore energy region;
  • Whether the activity overlaps spatially with one or more Draft Plan Option areas or cable corridors within the relevant offshore energy region;
  • Where the activity occurs within the relevant offshore energy region but does not overlap spatially with a Draft Plan Option area, but there is potential for far-field effects i.e. introduction of human pressures in the marine environment that have the potential to affect other activities beyond the footprint of the Draft Plan Option area or export cable route [11] ; and
  • The likely scope to avoid a significant interaction through spatial planning of the location of arrays within a Draft Plan Option area [12] .

Where one or more potentially significant interactions was identified, further consideration was given to the potential impact pathways by which socio-economic impacts may arise and the extent to which any or all of the relevant pathways required assessment (see column 4 of tables in Appendix B). Where relevant pathways were considered to be present, these were scoped into the assessment.

Where potential impacts will need to be mitigated up-front by the developer as a condition of consent, it has been assumed that the residual impacts will not give rise to significant socio-economic impacts. The mitigation costs to be met by the developer have not been included in the costs presented in the assessments described within this study. For example, in the case of potential impacts to aviation radar, these will need to be mitigated by the developer and therefore significant impacts to the aviation sector will be avoided and so are not quantified within this assessment.

Similarly, where potential socio-economic impacts are consequential on potential environmental impacts, it has been assumed that mitigation will be required for such impacts as a condition of consent and the residual environmental impacts will not give rise to significant socio-economic impacts. It is recognised that this is a simplification and that in some cases the likelihood of significant environmental impacts occurring is not well understood, for example in relation to collision risk between mobile species and tidal stream generators or the impacts of electromagnetic fields on electro- and magneto-sensitive species. The potential limitations of this assumption are discussed further in relation to individual methodologies in Appendix B and in the discussion of the results ( Section 11). However, particularly in relation to the Habitats Directive, there is a requirement for competent authorities to have a high level of certainty when making decisions relating to possible impacts on features associated with Natura 2000 sites. The processes in place to manage these risks to environmental receptors will provide a high level of assurance that significant effects in the marine environment are avoided, and thus that significant effects to related socio-economic interests are also avoided.

2.4.2 Economic Impacts of Arrays

A series of tables have been prepared for each offshore energy region for each offshore renewable technology documenting the outcome of the scoping process for the assessment of arrays and identifying activities for which potentially significant socio-economic impact pathways exist and which therefore need to be assessed in more detail (see tables in Appendix C).

Where the potential for significant socio-economic impact on an activity has been identified through the scoping process through one or more impact pathways, a more detailed consideration of the potential impacts has been undertaken using the assessment methods described in Appendix B for each sectoral activity. The assessment methods draw upon similar previous assessments ( ABPmer et al, 2011, ABPmer & RPA 2012a; 2012b), Environmental Statements for offshore wind ( e.g. Beatrice Offshore Wind Limited, 2012), wave ( e.g. Meygen, 2012) and tidal development, existing good practice guidance ( e.g. UKFEN 2012) and consultation with stakeholders.

Where possible the assessment methods have sought to quantify costs and benefits. Where insufficient information was available to derive a monetised estimate, quantitative or qualitative assessments have been provided. Consultation was also undertaken with relevant stakeholders on the basis for the estimates and the underlying assumptions.

2.4.3 Economic Impacts of Cable Routes

A series of tables have been prepared for each offshore energy region documenting the outcome of the scoping process for the assessment of export cable routes and identifying activities for which potentially significant socio-economic impact pathways exist and which therefore need to be assessed in more detail (see tables in Appendix C). Given the very high level of uncertainty concerning potential export cable routes, only relatively broad indicative Draft Plan Option areas have been identified and it is considered inappropriate to seek to develop monetised or quantitative estimates of impacts. In order to assess the potential for interaction between possible cable routes and socio-economic activities, all those activities that spatially overlap with the possible cable corridor have been identified and screened for possible significant interaction with export cables in line with the methodologies identified in Appendix B. Where there is potential for an interaction to arise that may have significant socio-economic consequences, these have largely been highlighted qualitatively within the assessment.

2.4.4 Social Impacts

For the purposes of this study social impacts have primarily been identified based on a distributional analysis. The assessment of distributional impacts is routinely performed as part of standard impact assessment, identifying who bears the costs and who accrues the benefits. Based on the quantification of economic impacts and baseline data, the study has determined which of these impacts of the sets of plan options will fall on different groups in Scotland. This has included consideration of impacts on specific locations (including individual settlements, where data availability allows) and on specific groups within Scotland's population (including, for example, different age groups, genders, minority groups, and parts of Scotland's income distribution). The extent to which this was possible has depended on the availability of data, for example on the gender and age breakdown of the workforce in affected sectors and income distributions within affected sectors. The study has also identified any particular concentrations of minorities amongst the areas and sectors affected. The assessment has drawn on statistical information from the Scottish Government (in particular the Scottish Neighbourhood Statistics), as well as data from previous studies. Additional information on potential social impacts from the previous consultation on short-term and medium term sites for offshore wind development (Marine Scotland, 2010) has also been used to identify stakeholder concerns about less quantifiable social impacts such as changes to traditional ways of life.

Social impacts have been described and quantified where possible, with the basis for the analysis clearly set out. This approach has been consistent with that put forward by the GES / GSR Social Impacts Taskforce, which is based on the 'capitals approach' of ensuring that stocks of social capital are maintained over time. The key areas of social impact identified by the Task Force include:

  • Access to services;
  • Crime;
  • Culture and Heritage;
  • Education;
  • Employment;
  • Environment; and
  • Health.

In order to assess the impacts of interactions with the sectors, the study has sought to clearly define what is (and is not) covered under each of the areas of social impact. Table 2 provides an indication of the definitions used for each area. The definitions provided in Table 2 are, to the extent possible, related to the need to ensure that stocks of capital (produced, human, social and natural) are maintained so that the potential for wellbeing is non-declining over time (Defra, 2011). Here the emphasis is on whether the scenarios being assessed would result in change in the level of access to the goods and services in question and/or whether the experience associated with that good and service changes.

Change in access can be thought of as factors that can be estimated in quantitative terms, for example, as increased time to access services or projected changes in areas of particular habitats. Whether the change is positive or negative is determined by the direction of change from the baseline. The impacts may be the same in quantitative terms across all groups, but the magnitude of impacts may be different. This is because some groups may be more vulnerable and, hence, be more significantly impacted by the change than others. For example, the influx of additional workers may result in increased demand on doctor's surgeries. Thus, the average time required to obtain an appointment to see a doctor may increase. This can be estimated as additional hours or days. However, this quantified measure alone does not reflect that some groups within society may be more significantly affected than others. For example, those in poor health could be affected more significantly than those in good health.

Table 2. Definition of areas of social impact

Key area

Access

Experience

Access to services

Change in opportunity to use services or time to access services

Change in quality of service provided or received

Crime

Change in opportunity for criminal activities

Change in level of crime (perceived or actual)

Culture and heritage

Change in opportunity to access culture and heritage

Change in existence of culture/heritage, or knowledge of it (especially loss)

Change in number of visits to cultural/heritage sites

Change in quality of cultural or heritage through change in context, quality of visits

Education

Change in opportunity to access education services

Change in quality of education services

Employment

Change in employment opportunities

Change in quality of employment opportunities

Environment

Change in opportunity to access environment

Change in existence of environment, or knowledge of it (especially change in habitats)

Change in number of visits to environmental sites

Change in quality of environment through change in quality of habitats, species supported or change in quality of visits

Health

Change in level of disease or symptoms (physical and mental health)

Change in self-assessed quality of health

Changes in experience are more subjective and so cannot be easily estimated in qualitative terms. Instead, they have to be assessed in terms of how the change might be perceived by different groups. This approach assumes that individuals within a particular group will have the same (or very similar) subjective response to the change. Continuing the example above, the appointments to see the doctor may be shorter such that those in poor health perceive that they are receiving a worse service than before the additional demand was placed on the surgery. This highlights that it is very important that the groups used within the assessment are appropriate to avoid under-estimating the negative impacts or benefits from interactions.

Table 3 presents the list of groups that has been considered in the assessment of social impacts and these have been used across all of the key areas.

Table 3. Initial list of groups who may be affected

Key area

Groups distinguished by

Location

Age

Gender

Income

Minority

Other

Access to services

  • Datazone
  • Local Authority
  • Region
  • Rural datazones [13]
  • Urban datazones [13]
  • Children
  • Working age
  • Pensionable age
  • Male
  • Female
  • 10% most deprived
  • 10% most affluent
  • Remaining 80% [14]
  • Crofters
  • 10% most deprived
  • 10% most affluent
  • Ethnic minorities
  • Religion
  • Sexual orientation
  • With disability or long-term sick
  • Special Interest Groups

Crime

Culture and heritage

Education

Employment

Environment

Health

It is also important to establish exactly what needs to be covered. Table 4 presents an initial definition of the type of services that will be considered for each key area, drawing on the baseline data from ABPmer & RPA (2012a).

Table 4. Definition of services included under each key area

Key area

Services

Potential data sources

Access to services

Household spaces

Percentage of dwellings failing Scottish Housing Quality Standard

Deprivation for housing

Affordability of housing

Mean house sale prices

Time required to drive to GP, post office, primary school, supermarket, petrol station

Percentage of population in fuel poverty

Scottish National Statistics

Scottish National Statistics

Scottish National Statistics

Scottish National Statistics

Scottish National Statistics

Scottish National Statistics

Scottish National Statistics

Crime

Perceptions of neighbourhood

Crime rate per 10000 population

Clear up rates

Reconvictions

Scottish National Statistics

Scottish National Statistics

Scottish National Statistics

Scottish National Statistics

Culture and heritage

Crofting

Proportion of population attending a cultural even in previous 12 months

Scottish Government; Hillam (2007)

Scottish National Statistics

Education

Deprivation for education, skills and training

Proportion of population with/without qualifications

Percentage receiving job-related training

Access to training facilities (colleges)

Pupil: teacher ratio

Percentage of schools in satisfactory or good condition

Scottish National Statistics

Scottish National Statistics

Scottish National Statistics

Scottish National Statistics

Scottish National Statistics

Scottish National Statistics

Employment

Gross weekly earnings

Deprivation for income

Employment by industry sectors

Turnover of social economy

Businesses surviving for longer than three years

Number of people in poverty

Scottish National Statistics

Scottish National Statistics

Office for National Statistics

Scottish National Statistics

Scottish National Statistics

Scottish National Statistics

Environment

Overall rank of deprivation

Energy consumption per person

Scottish National Statistics

Scottish National Statistics

Health

Self-assessed health rating

Deprivation for health

Mean weekly consumption of alcohol

Smoking rates

Level of physical activity

Scottish National Statistics

Scottish National Statistics

Scottish National Statistics

Scottish National Statistics

Scottish National Statistics

(Source: based on ABPmer & RPA, 2012a)

The social assessment is summarised into three tables:

1. The identification of social impacts and their significance: this table considers each of the direct effects predicted to occur on each sector and identifies area of social impacts that could be caused as a result. Where the impacts are expected to be noticeable ( i.e. if the overall costs to a sector in any region are less than 5% of the turnover for that sector (or reduction in GVA for commercial fisheries), see also Section 2.5), Present Value ( PV) costs have been identified. Otherwise, the impacts are given in qualitative terms only, taking account of any mitigation that might be available. The significance of the social impacts is assessed in terms of both access and experience, with the following definitions used:

  • x x x: significant negative effect. This is defined as where it is probable that an impact is sufficiently significant so as to be noticed;
  • x x: possible negative effect. This is defined as where it is possible that an impact is sufficiently significant so as to be noticed;
  • x: minimal negative effect, if any. This is defined as where it is probable than an impact is unlikely to be sufficiently significant so as to be noticeable, but that some possibility exists that a negative impact could occur; and
  • 0: no noticeable effect expected.

2. Distributional analysis (location, age and gender): each of the social impacts described in the first table is then considered for its likely distributional consequences. The ratings defined in the first table are used as the basis for the assessment. Where the impact is expected to be larger on a particular group than average, the rating is increased. So, for example, loss of traditional fishing grounds assigned an 'x' in the first table is then considered against where and who might be affected by that impact. Where impacts are more likely to occur in rural areas because that is where the fishing ports are mainly located, the impact is increased to 'xx'. Likewise, where an impact is less than average for a particular group, the rating is reduced. Where a change to the average impact is made, the tables include a brief reason describing why the change has been made.

3. Distributional analysis (income and social groups): the approach used in the third table is the same as the second but here focusing on impacts across different income groups and particular social groups: crofters, ethnic minorities, those with disability or who are long-term sick, special interest groups and other (those not picked up elsewhere). Again, the ratings from the first table are used as the basis for the assessment, with ratings increased to reflect that a particular group is likely to be impacted more significantly. The extent of the increase ( i.e. from x to xx, or xx to xxx) is used to reflect how concentrated the impact would be on a particular group and, hence, how noticeable it is likely to be to them.

2.4.5 Combined Impact of Offshore Wind, Wave and Tidal Energy Plans

For the purpose of this study, the combined impact of potential offshore wind, wave and tidal development within the Draft Plan Option areas has been considered at both regional and national levels.

In general, at low levels of offshore wind, wave and tidal development, the socio-economic impacts of additional levels of development are likely to be additive. In contrast, more intense offshore wind, wave and tidal development, occupying a significant proportion of local, regional or national sea space may give rise to synergistic impacts. For example, above a certain 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 little if any evidence that indicates what the relevant thresholds might be, above which impacts may become synergistic.

Given these constraints, the study has generally adopted an additive approach to assessing combined impacts associated with multiple offshore renewables development locations and multiple offshore renewables technologies within a region and nationally, unless the impacts are predicted to be particularly concentrated and intense at a local or regional level, in which case specific consultation with the relevant sectoral interests has been undertaken to seek to evaluate the combined effect using expert judgement.

The approach to estimating the combined social effects and distributional impacts has been based on assigning a significance rating to impacts on different groups from changes to access and experiences from the interactions associated with each sector. The number of each rating assigned has been summed to give an indication of not just the number of impacts, but also their likely overall cumulative significance for each group and each key area. The approach has followed the principles of the additive approach used across other sectoral interests, while retaining information on the range of significance of social impacts in a semi-quantitative manner. The following ratings have been 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.

Where necessary, consultation was undertaken with relevant sectoral interests to modify the initial assessments of impacts.

2.4.6 Documentation of Impacts

The assessment of impacts has been documented in a series of tables for each Scottish Offshore Renewable Energy Region ( SORER) for which Draft Plan Option areas have been identified in this planning round and for each offshore renewables technology (offshore wind, wave and tidal) estimating the potentially significant socio-economic impacts (positive and negative) for each sector for each Draft Plan Option area and identifying the nature and duration of those impacts ( i.e. one-off costs or ongoing costs) (see Sections 4 to 8 and Appendix C).

2.5 Estimation of Costs and Benefits

The costs and benefits associated with the impacts identified under Section 2.4.6 have been estimated for the three scenarios compared to the 'do nothing' option. This includes:

  • The potential costs (negative impacts) associated with the plan options on other activities;
  • The potential benefits associated with the impacts of the plan options on other activities; and
  • The potential distribution of costs and benefits between activities, between different locations and regions and between different social groups.

The assessment has been prepared in accordance with Scottish Business and Regulatory Impact Assessment guidance, Better Regulation Executive guidance on impact assessment and the Green Book methodology ( HM Treasury, 2003) for economic assessment.

The Treasury Green Book notes that 'Costs and benefits considered should normally be extended to cover the period of the useful lifetime of the assets encompassed by the options under consideration'. However, this could create an extremely long assessment period as the asset life of an offshore wind farm could be 40 years, assuming repowering after 20 years. Given that the purpose of the study is to estimate costs and benefits to socio-economic activities excluding the supply chain, it is considered more appropriate to use a shorter assessment period of 10 years post-construction. As identified in Section 2.2.3, for the purposes of this study, it is assumed that construction will commence in 2023 and that all development will be operational by 2025. The assessment period therefore ran from 2014 (the base year) until 10 years after all development became operational ( i.e. 2035), a period of 22 years. In line with the indicative programme, construction was assumed to start in 2022 and economic impacts were therefore assumed to ramp up between 2023 and 2025 (one-third of full impact in 2023, two-thirds in 2024 and full impacts from 2025).

Where it was possible to develop quantified estimates for impacts, these have been converted to PV using a 3.5% discount rate in line with Treasury Green Book guidance and summing the discounted values over the assessment period.

A slightly different approach is taken for commercial fisheries to take account of the effects of the displacement of current (and future) output due to the footprint of the renewable technologies. This is based on the potential direct reduction in GVA due to the potential reduction in the value of landings. The Seafish Industry Authority Multi-year Fleet Economic Performance Dataset (Seafish, 2013) has been used as the basis for this calculation. However, directly comparable data on fleet segments and gear types were not available. Therefore, a GVA ratio of 39% has been used to convert PV assessment of impacts on the value of landings to GVA, based on the average GVA % across all Scottish fleet segments. This 39% factor has been used with the projected change in value of landings to estimate the change in GVA.

Where appropriate, knock-on impacts on GVA and employment have also been estimated using the PV damage estimates (or GVA reduction for commercial fisheries). To minimise the risk of meaningless or misleading assessments of the impacts on GVA and employment, the impacts are only quantified where the overall costs to a sector in any region are more than 5% of the turnover for that sector (or reduction in GVA for commercial fisheries). In most cases, the sector turnover has been based on the industry group from the UK Standard Industrial Classification of Economic Activities 2007 classes. The result of this 5% threshold is that the only knock-on impacts on GVA and employment that are identified as being significant are those for commercial fisheries.

The knock-on effects on GVA for commercial fisheries have been estimated using the Type I and Type II GVA multipliers. The 2007 Scottish Input-Output multipliers have been applied as these were the most recent available at the time of the report. Data on landings have been used to inform the consideration of downstream supply chain effects (such as impacts on fish processors) but no estimate has been made of the GVA impact on processors. Instead, this is assessed as part of the (qualitative) social assessment. Knock-on employment impacts are based on the value of landings and use the Type I and Type II employment effects.

Increases in fuel costs (such as for shipping) are unlikely to relate in any change in GVA or employment so use of multipliers to these costs could be misleading. It needs to be acknowledged however that since the 5% threshold is an average applied to a sector as a whole, it does not provide for cases where a small number of businesses may be disproportionately affected ( e.g. when their turnover is below industry average). The knock-on effects on different types of business ( e.g. micro-enterprises, small and medium companies especially in terms of the fishing fleet) are discussed in the qualitative social analysis.

The total impact on GVA has been estimated as the sum over the 13 year period (3 years construction and 10 years post-construction). The total impact on employment has been estimated as the average (mean) number of jobs affected over the 13 year period. This is because it is likely that it would be the same jobs that are affected, year-on-year, such that a total would be misleading.

There are concerns over the likely robustness of the multipliers for fisheries and aquaculture. Further investigation of possible alternative multipliers ( e.g. taken from those for England or for the UK as a whole) has been undertaken. It is not always possible to find detailed information specific to sea fishing. However, three different sources of multipliers have been identified in addition to the Scotland Input-Output Multipliers:

  • Study undertaken by the University of Strathclyde in 2002 [15] : this study presents employment effects, employment multipliers and output multipliers for sea fishing and fish processing for Scotland and the UK. The study also provides specific multipliers for demersal, shellfish and pelagic fisheries and are based on input-output tables from 1998;
  • UK Input-Output Tables for 2005, downloaded from the Office for National Statistics: these provide multipliers at the national scale for fishing (but this is not specifically defined as sea fishing); and
  • OECD statistics for the UK covering agriculture, hunting, forestry and fishing for mid-2000s: these provide data that can be used to calculate high level multipliers not specifically related to sea fishing. These data were accessed at http://stats.oecd.org ( STAN I-O inverse matrix).

Table 5 compares the multipliers from these sources. The table includes multipliers from 2005 and 1998 for Scotland for better comparison with the other sources of multipliers. The table shows that the Scotland multipliers are consistently lower in terms of employment effect, except for the 1998 employment effect, which is higher than that calculated by the University of Strathclyde. The comparisons are complicated by the different sectors that are included, especially for those from the OECD which include agriculture, hunting and forestry alongside fishing.

The implications of Table 6 are that the employment effect for Scotland would be expected to be lower than that for the UK as a whole (as suggested by the University of Strathclyde study), but the employment effect from the 1998 Scotland tables is higher than the University of Strathclyde study. As a result, any adjustment to the 2007 employment effect (for example based on the change between 1998 and 2007 from the Scotland tables) would be a reduction of around 55% in the University of Strathclyde employment effect, or to 9.85. Neither the University of Strathclyde nor the UK input-output tables give GVA multipliers such that it is difficult to draw conclusions for this multiplier. However, the output multipliers do tend to be higher than from the Scotland I-O tables suggesting these may under-estimate the output effects.

Table 5. Multipliers for comparison with the Scottish 2007 multipliers (Type I)

Source and sector Output multiplier Employment effect Employment multiplier GVA multiplier
Scottish I-O tables 2007 for sea fishing 1.42 11.80 1.32 1.30
Scottish I-O tables 2005 for sea fishing 1.43 10.72 1.49 1.37
Scottish I-O tables 1998 for sea fishing 1.33 21.42 1.25 1.31
University of Strathclyde (2002) for sea fishing in Scotland (1998 I-O tables) 2.13 17.9 1.80 Not given
University of Strathclyde (2002) for sea fishing in UK (1998 I-O tables) 3.47 24.7 2.24 Not given
UK 2005 Input-Output tables for fishing 1.90 Not given 3.92 Not given
OECD for UK (agriculture, hunting, forestry, fishing) (mid-2000s) 2.34 22.5 2.34 Not given

Notes: the table only shows the Type I multipliers as these were more widely available than the Type II multipliers; both Type I and Type II multipliers are used in this study to assess the social impacts

Table 6. Allocation of expenditure types to industry groups

Cost Type

Industry Group

Justification

Fisheries

Sea fishing

Specific code available

Aquaculture

Fish farming

Specific code available

Navigation

Water transport

Includes sea and coastal water transport

Aviation

Air transport

Includes scheduled and non-scheduled air transport

Recreational Angling

Recreational services

Includes sporting activities

Recreational Boating

Recreational services

Includes sporting activities

Surfing and windsurfing

Recreational services

Includes sporting activities

Tourism

Hotels, catering & pubs etc

Includes accommodation, restaurants and bars

Wave and tidal energy

Research & development

Includes research and experimental design on engineering

Cables

Telecommunications

Specific code available (this also includes maintenance of the network)

The assessments have been presented in a series of fully documented Excel spreadsheets to ensure transparency and facilitate audit by Marine Scotland as necessary. The spreadsheets include qualitative and quantitative data that underlie the calculations, along with any assumptions that have been made.

2.6 Consultation

The study has been overseen by a Project Steering Group ( PSG) within Scottish Government to provide guidance and advice on the methodology and presentation of outputs. The study has also benefitted from advice from a wider Project Advisory Group ( PAG) ( Appendix A) on the development of the methodology and discussion of the draft outputs. In addition, specific consultation has been undertaken with a wider range of stakeholders (see list in Appendix D) to identify additional information sources and to inform assumptions used in the assessment.

At the start of the project an initial email letter ( Appendix E) was sent to all wider stakeholders informing them of the purpose of the study and how and when they might become involved. Further engagement with these stakeholders was undertaken as relevant and necessary throughout the course of the study.


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