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The importance of revenue sharing for the local economic impacts of a renewable energy project : a social accounting matrix approach

Allan, Grant and McGregor, Peter and Swales, Kim (2011) The importance of revenue sharing for the local economic impacts of a renewable energy project : a social accounting matrix approach. Regional Studies, 45 (9). pp. 1171-1186. ISSN 0034-3404

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Abstract

The importance of revenue sharing for the local economic impacts of a renewable energy project: a social accounting matrix approach, Regional Studies. Ambitious renewable energy targets are requiring investments in new renewable capacity in areas where acceptance could be affected by the potential economic benefits to the locality. At the same time, new renewable energy projects, primarily for onshore wind capacity, might offer a route by which peripheral economic development policies can be supported. The economic impacts of these projects are difficult to quantify using input–output techniques, but can be more appropriately handled within a social accounting matrix (SAM) framework. A social accounting matrix for the Shetland Islands, off the north coast of mainland Scotland, is used to evaluate the potential local economic and employment impacts of a large proposed onshore wind energy project. Sensitivity analysis reveals the relative importance of the level of ‘community benefit’ payments, ‘local sourcing’ of intermediate inputs and the level of community ownership of the project to the size of these impacts. In the Shetland case, by a substantial margin, local ownership confers the greatest economic impacts for the local community.