The role of ownership in determining the rural economic benefits of on-shore wind farms

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Abstract

The development of the wind energy sector is often promoted as means of supporting rural economies. This paper focuses on how the ownership structure of on-shore wind power plants (external, farmer or community) affects the size and distribution of impacts within the rural part of the region. Empirical analysis is based on a regional CGE model of North East Scotland with the results compared to those generated from a standard SAM multiplier analysis. With no local ownership, while rural GDP increases, there is almost no effect on household incomes due to the limited direct linkages of the on-shore wind sector. Local ownership increases the household income benefits but there are still limited positive spill-over effects on the wider economy unless factor income is re-invested in local capital. With re-investment, farm household ownership gives rise to the largest increase in total household income but community ownership gives rise to the largest increase in rural (non-farm) household incomes and welfare. The results contribute to the ongoing debate about the opportunity cost of external asset ownership in rural areas.
Original languageEnglish
Pages (from-to)331-360
Number of pages30
JournalJournal of Agricultural Economics
Volume63
Issue number2
Early online date27 Mar 2012
DOIs
Publication statusPublished - Jun 2012

Fingerprint

rural economics
Ownership
ownership
household income
Economics
wind power
Power Plants
multipliers
opportunity costs
power plants
assets
Scotland
rural areas
wind farms
Farms
Economic benefits
Farm
households
income
Household income

Keywords

  • asset ownership
  • rural development
  • income benefits, wind power, CGE versus SAM assessments
  • CGE vs. SAM assessments
  • wind power D58
  • Q42
  • R11
  • R13

Cite this

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title = "The role of ownership in determining the rural economic benefits of on-shore wind farms",
abstract = "The development of the wind energy sector is often promoted as means of supporting rural economies. This paper focuses on how the ownership structure of on-shore wind power plants (external, farmer or community) affects the size and distribution of impacts within the rural part of the region. Empirical analysis is based on a regional CGE model of North East Scotland with the results compared to those generated from a standard SAM multiplier analysis. With no local ownership, while rural GDP increases, there is almost no effect on household incomes due to the limited direct linkages of the on-shore wind sector. Local ownership increases the household income benefits but there are still limited positive spill-over effects on the wider economy unless factor income is re-invested in local capital. With re-investment, farm household ownership gives rise to the largest increase in total household income but community ownership gives rise to the largest increase in rural (non-farm) household incomes and welfare. The results contribute to the ongoing debate about the opportunity cost of external asset ownership in rural areas.",
keywords = "asset ownership, rural development, income benefits, wind power, CGE versus SAM assessments , CGE vs. SAM assessments, wind power D58, Q42, R11, R13",
author = "Euan Phimister and Deborah Roberts",
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AB - The development of the wind energy sector is often promoted as means of supporting rural economies. This paper focuses on how the ownership structure of on-shore wind power plants (external, farmer or community) affects the size and distribution of impacts within the rural part of the region. Empirical analysis is based on a regional CGE model of North East Scotland with the results compared to those generated from a standard SAM multiplier analysis. With no local ownership, while rural GDP increases, there is almost no effect on household incomes due to the limited direct linkages of the on-shore wind sector. Local ownership increases the household income benefits but there are still limited positive spill-over effects on the wider economy unless factor income is re-invested in local capital. With re-investment, farm household ownership gives rise to the largest increase in total household income but community ownership gives rise to the largest increase in rural (non-farm) household incomes and welfare. The results contribute to the ongoing debate about the opportunity cost of external asset ownership in rural areas.

KW - asset ownership

KW - rural development

KW - income benefits, wind power, CGE versus SAM assessments

KW - CGE vs. SAM assessments

KW - wind power D58

KW - Q42

KW - R11

KW - R13

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