Economic and environmental impacts of UK offshore wind development to 2029: the importance of local content

Grant Allan, David Comerford, Kevin Connolly (), Peter McGregor and Andrew Ross
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Kevin Connolly: qDepartment of Economics, University of Strathclyde

No 1910, Working Papers from University of Strathclyde Business School, Department of Economics

Abstract: The continuing development of the offshore wind sector is an important element of UK energy and industrial policy since it holds the potential of substantial emissions reductions while simultaneously boosting economic activity. A central idea here is that the economic impact of the offshore wind sector can be enhanced by increasing the local content of its inputs. We explore, through simulation of a purpose-built Input-Output model of the UK, the economic and emissions impacts of the likely future development of the UK’s offshore wind sector, with a particular emphasis on the importance of local content. We explore six scenarios all of which embed the capacity expansion anticipated by the Sector Deal, but differ in terms of local content – including a set of illustrative simulations considering the possible impact of Brexit on local content. We find that future offshore wind development does indeed generate a “double dividend†in the form of simultaneous and substantial reductions in emissions and improvements in economic activity. It is also the case that, as anticipated, the scale of the economic stimulus arising from offshore wind development is directly and strongly related to the extent of local content.

Keywords: low carbon economy; industrial strategy; supply chain; offshore wind; economic impact; Brexit (search for similar items in EconPapers)
JEL-codes: Q40 Q43 Q54 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2019-08
New Economics Papers: this item is included in nep-ene, nep-env and nep-reg
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