What are the potential economic and social impacts of clean energy projects?

The newly reformed planning system is anticipated to help speed up the energy transition, whereby the benefits of developments will be of central consideration. The Secretary of State for Housing, Communities and Local Government will be able to intervene to ensure benefits to regional and national economies are secured.

However, the truth is that nationally significant low carbon energy projects are, naturally, very large and often contentious. The scale of these projects bring various benefits and adverse impacts which require much consideration, and there remains a challenge as to how such potential impacts can be effectively communicated to decision makers.

How to assess the socio-economic impacts of clean energy projects?

The assessment of socio-economic impacts has for many years centred around the direct and indirect impacts on employment, GVA and the supply chain. However, in recognition that these impacts alone do not paint the full picture of potential effects on local communities and businesses, the best practice approach has rapidly evolved.

Now, a comprehensive understanding of all potential socio-economic impacts should be undertaken, including consideration of:

• Economic: Employment, GVA and potential impacts on local employment opportunities and access to work and training. As mentioned above, regional and national economic benefits are set to receive greater consideration in decision making.
• Social: potential impacts of the workforce associated with the project on population, housing, and local services.
• Tourism: the potential indirect impacts on tourism associated with visual amenity, visitor accommodation, and recreation.

Click here to read an earlier insight on the growing importance of robust socio-economic inputs to offshore wind applications.

How can clean energy projects maximise benefits for local communities and the wider economy?

Nationally significant clean energy projects can have significant and complex impacts on local areas. When applications for such projects are considered, the potential impacts on local communities and the wider economy are key influences on the final decision.

With the benefits to regional and national economies set to carry more weight in future decision making, developing plans to maximise economic benefits and mitigate negative impacts, where possible, can be helpful to strengthen the socio-economic case for projects.

Most commonly, these plans come in the form of ‘Skills and Employment Plans’ and ‘Supply Chain Engagement Strategies’, which help clients, promoters and decision makers:

• Understand opportunities for the employment of local people;
• Identify the need for infrastructure and employability support for local people to access jobs and training; and
• Identify opportunities for local and regional businesses to engage in the supply chain.

What are social impacts of clean energy infrastructure

The social impacts of clean energy projects often receive less attention than economic benefits in socio-economic impact assessments.

Why do the social impacts of clean energy projects receive less attention?

Taking offshore wind as an example, a lack of primary research has limited the abilities of socio-economics Economic Impact Assessment chapters to undertake more in-depth assessments of social impacts. Specifically, there is an evidence gap in the actual experiences of communities living near offshore wind farms, and undertaking primary social research for each offshore wind EIA is an unrealistic solution as, at that stage,there is typically uncertainty on port locations for the construction and operations phases.

Developing research on social impacts

A potential solution could come in the form of a shared evidence base for social impacts to inform baseline and impact assessments. Following calls from developers through the Scottish Offshore Wind Energy Council (SOWEC), The Crown Estate Scotland is leading a collaborative primary social research study to understand the lived experience of Scottish communities near to offshore wind farms and provide better baseline data on the social impacts experienced from offshore and onshore elements of projects throughout their life-cycle. This evidence will build upon previous studies published by the Scottish Government on the public perceptions of offshore wind farm developments and is a significant step towards enabling a more strategic approach to assessing the social impacts of new offshore wind developments.

It is not yet known whether the Crown Estate will follow suit. Earlier this year, the University of Exeter undertook a scoping review of evidence on the social impacts of marine sectors on coastal communities on behalf of the Crown Estate. The review recommended that decision making processes need revisions to distribute benefits and negative impacts in a fairer way, beyond the current narrow set of social impacts relating to socio economic outcomes. The study also called for a systematic review of social impact assessments across marine sectors, including offshore wind.

This could be seen as a positive sign that the rest of the UK will follow Scotland. Although given the length of time these evidence bases take to develop, if such evidence is prepared, it is unlikely to be ready for use in the assessment of floating offshore wind deployment in the Celtic Sea.

Key challenges to securing economic benefits of clean energy infrastructure

Based on our experience assessing the socio-economic impact of major energy infrastructure projects, the main socio-economic challenges to decarbonising the electricity grid by 2030 are:

1. UK supply chain capabilities

The UK renewables industry is running behind on manufacturing capacity. The industry has long been aware of this, but the historic policy environment has not provided the level of confidence required to make expensive and long-term investment decisions.

2. Skills, Skills, Skills

Transitioning workers from carbon-intensive energy industries, upskilling workers in adjacent supply chain activities, and providing joined up pathways throughout the education system into the renewables sector are all imperative in ensuring there is a UK workforce capable of taking the lead on delivery. This would have the added benefit of tackling one of the main negative messages coming out against the proposals, which centres on the energy transition ‘putting jobs at risk’.

3. Integrated delivery

Taking offshore wind as an example, the UK’s port infrastructure remains limited in its ability to support an integrated approach to the fabrication, assembly, marshalling, and installation of large offshore wind components (blades, towers, foundations, etc). However, Labour’s £1.8 billion commitment to upgrading key UK ports may help tackle this.

4. Transmission and storage capacity

There is a need for serious investment in grid infrastructure. The national grid will need substantially expanding and upgrading to integrate the increase in renewable sites, and the UK’s energy storage capacity will need to be significantly increased to manage intermittent supply. There is also a significant upgrade required to ensure energy can be distributed to end users. Current lead times to service new sites are approaching 10-years in some cases.

If you would like to discuss how HJA can provide specialist support to help you deliver robust socio-economic inputs to a major energy infrastructure project, please contact myself or Joshua Harding-Jones.