• Energy Research

Within the system of national accounts the electricity sector is typically reported as a single entry representing generation, transmission, distribution and trade. The ways in which these components interact with the economy differ greatly, a feature lost within the standard accounting framework. In this paper we propose an Electricity Satellite Account (ELSA) approach to better understand the linkages between the electricity sector and economy, with a particular focus on generation technologies. In developing this framework, we draw parallels with Tourism Satellite Accounts (TSAs). To illustrate the practical steps in constructing ELSAs, we develop an ELSA for Scotland for 2012, and show how the ELSA framework gives an improved understanding of the economic contribution of the electricity sector, which is critical in improving the usefulness of such accounts for climate, energy, and economic policy.

We examine the economic and environmental impact that the installation of 3 GW of marine energy capacity would have on Scotland. This is not a forecast, but a projection of the likely effects of meeting the Scottish Government's targets for renewable energy through the development of a marine energy sector. Energy, with a particular focus on renewables, is seen by the Scottish Government as a "key sector", with high growth potential and the capacity to boost productivity (Scottish Government, 2007a. The Government Economic Strategy. The Scottish Government, Edinburgh). The key nature of this sector has been identified through targets being set for renewable energy to achieve environmental and economic benefits. Using a regional computable general equilibrium (CGE) model of Scotland we show that the development of a marine energy sector can have substantial and beneficial impacts on GDP, employment and the environment over the lifetime of the devices, given the encouragement of strong indigenous inter-industry linkages. Furthermore, there are also substantial "legacy" effects that persist well beyond the design life of the devices.

The introduction of a Feed-in-Tariff (FIT) support mechanism has spurred development of small-scale domestic renewable electricity generation throughout Great Britain (GB), however the spatial pattern of uptake has been been uneven, suggesting that local, as well as between neighbourhood factors may be at important. As well as confirming that local socio-economic factors, including wealth, housing type and population density are found to be important in explaining uptake of this policy, local "green" attitudes - measured in three different ways - are shown not to be important. Existing local technical expertise, proxied for using data on small-scale renewable electricity devices in each area prior to the introduction of FIT, is an important factor in explaining subsequent adoption. Critically, we also find that there are spatial (i.e. between neighbourhood) processes explaining the uptake of these technologies. Taken together, our results suggest that, as currently designed, FIT policy may be regressive in income and could exacerbate spatial economic in-equalities.

Regional employment impacts of marine energy in the Scottish economy: a general equilibrium approach, Regional Studies. One aspect of the case for policy support for renewable energy developments is the wider economic benefits that are expected to be generated. Within Scotland, as with other regions of the UK, there is a focus on encouraging domestically based renewable technologies. This paper uses a regional computable general equilibrium framework to model the impact on the Scottish economy of expenditures relating to marine energy installations. The results illustrate the potential for (considerable) ‘legacy’ effects after expenditures cease. In identifying the specific sectoral expenditures with the largest impact on (lifetime) regional employment, this approach offers important policy guidance.

This paper provides a comprehensive review of the current state of the art of the economics and socio-economics of ocean renewable energy (ORE); the many ways in which the viability and impacts of an ORE project are assessed, and an analysis of the current weaknesses, issues or inappropriateness of the metrics and methodologies used in their definition and presentation. The outcomes of this paper are anticipated to benefit the ORE and wider renewable sector as a whole. The review revealed that, for the most part, the current study of economics and socio-economics of ORE remain separate and discrete areas of research. The economic methods utilised appear to be comprehensive but are limited to project (or private investor) level. The methods identified for socioeconomic assessment fall between traditional, and now routine, environmental assessment approaches and more novel holistic approaches such as ecosystem services and life cycle assessment. The novel section of the paper explored the connectivity between the economics and socio-economics of ORE in relation to project developments and policy/planning. A visualisation method was created of concentric rings intersected by related axis of economic, socio-economic and environment, and enabled the examination of the benefits arising from the connectivity between the two spheres. The concept of sustainable development process and the integration of environmental assessment for ORE was also explored and how it responds to differing stakeholder aspirations and interpretations. The analysis revealed that there was a divergence between public and private economic and socioeconomic assessments for ORE: environmental assessment is primarily a public responsibility but with significant inputs from the private developer involved while economic assessments are conducted primarily by the developer and/or investor at their own behest. However, the two spheres of economic and socio-economic for ORE are highly connected and synergistic and must be examined in a holistic manner.

Using a disaggregated energy–economy–environmental model, we investigate the economic and environmental impact of a Scottish specific carbon tax under three alternative assumptions about the use of the revenue raised by the tax: revenues raised are not recycled within Scotland; revenues are used to increase general government expenditure or to reduce Scottish income tax. Wefind that by imposing a tax of £50 per tonne of CO2 the 37% CO2 reduction target is met with a very rapid adjustment in all three cases if the model incorporates forward-looking behaviour. However, the adjustment is much slower if agents are myopic. In addition, the results of the model suggest that a carbon tax might simultaneously stimulate economic activity whilst reducing emissions and thus secure a double dividend, but only for the case in which the revenue is recycled through income tax.

In this paper, publicly available cost data are used to calculate the private levelised costs of two marine energy technologies for UK electricity generation: Wave and Tidal Stream power. These estimates are compared to those for ten other electricity generation technologies whose costs were identified by the UK Government (DTI, 2006). Under plausible assumptions for costs and performance, point estimates of the levelised costs of Wave and Tidal Stream generation are £190 and £81/MWh, respectively. Sensitivity analysis shows how these relative private levelised costs calculations are affected by variation in key parameters, specifically the assumed capital costs, fuel costs and the discount rate. We also consider the impact of the introduction of technology-differentiated financial support for renewable energy on the cost competitiveness of Wave and Tidal Stream power. Further, we compare the impact of the current UK government support level to the more generous degree of assistance for marine technologies that is proposed by the Scottish government.