The Economic Impacts of Wind Farms on Scottish Tourism
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The economic impacts of wind farms on Scottish tourism A report for the Scottish Government March 2008 The economic impact of Wind farms on Scottish tourism 2 Executive summary 1. Background and Approach Over the last two decades Energy Policy has seen a marked shift towards renewables as part of the UK commitment to reduce green house gas emissions by 20% between 2000 and 2010. The policy was reinforced in November 2007 with a new target of 50 per cent of Scotland's electricity from renewables by 2020, and an interim milestone of 31 per cent by 2011. The 2011 target implies around 5,000 Megawatts of installed capacity almost double current levels. Given current technology and the time needed to plan and develop large projects such as storage hydro or offshore wind farms, the policy suggests a very significant increase in on-shore wind farms with associated impacts on Scotland’s landscape. Scottish tourism depends heavily on the country's landscape, with 92% of visitors stating that scenery was important in their choice of Scotland as a holiday destination, the natural environment being important to 89% of visitors (Tourism Attitudes Survey 2005). As part of the general policy to create a more successful country, with increasing sustainable economic growth, the Tourism sector has agreed a target of 50% revenue growth in the ten years to 2015 The potential problem is that many people find that man made structures such as pylons and wind turbines reduce the attractiveness of a landscape. It is logical to assume that reduced quality of an important feature could reduce demand to some degree which in turn may result in either reduced prices for tourism services or reduced numbers of tourists or both. Any loss of expenditure will lead to a reduction in economic activity and result in a loss of income and jobs. However the tourism industry itself requires a reliable supply of electricity and climate change threatens radical changes to our valued habitats and wildlife, and may irreversibly alter the very landscape that visitors value so highly. Wind turbines are an established technology readily available in today’s market place, able to supply electricity whilst reducing the effects of our energy usage on climate change. Sensitively located, renewable energy can also bring social and economic benefits to communities and to local businesses. Government is required to evaluate all the issues including landscape, tourism, security of supply, the impact of climate The economic impact of Wind farms on Scottish tourism 3 change internationally (which is indisputably large and negative), and the public financial support implicit in the renewable obligation of the energy industry. To develop appropriate policy requires an understanding of the significance of each of these elements. In reality the discussion on any particular wind farm proposal is now almost always an adversarial debate, and opinions on the policy area of wind farms in Scotland have become polarised and founded on competing myths (of which some are, and some are not, founded in reality). This research sought to provide an evidence base on one contentious element of the decision, the impact on tourism in Scotland, and to assist decision making by identifying: • The potential number of tourists that would be affected - Geographic Information Systems (GIS) were used to assess the number of tourists that may come into contact (accommodation in sight of wind farms or through exposure while travelling by road) with any of the projects that are built, already permitted, or currently in the process of applying for permission within the planning system. • The reactions of those tourists affected by wind farms - this was established by carrying out both a large-scale internet- based survey of current and potential tourists’ attitudes and values, along with nearly 400 direct interviews of visitor intentions at tourist spots located close to existing or proposed wind farms. • The economic impact of those reactions - this was believed to result from two main sources. First, there may be a change in the number of tourists going to an area when a wind farm is constructed, and it should be possible to estimate the related change in expenditure (through the intercept survey). Secondly, the views from some accommodation will be affected by the construction of wind farms. Under certain assumptions, a fall in average willingness to pay for a “room with a view” results in a proportionate fall in the average price actually paid by the tourist. Consequently, any proportionate fall in expenditure on accommodation can be calculated (through the internet survey). Bringing together the two effects allows the estimation of the net economic impact at the local and Scottish levels. Examining the three questions above is a crucial step in: • Replacing myth with evidence • Determining if there is a trade-off, for local communities and for Scotland as a whole, between energy and environmental benefits and tourism impacts, or • Identifying the circumstances when there should be a general presumption for or against a development. The economic impact of Wind farms on Scottish tourism 4 The initial step in assessing economic impact was to look to the experiences of other countries, by way of a literature review. 2. The Literature Review: This aimed to provide the background and likely bounds for the final results, by reviewing, as comprehensively as possible, previous research on the economic impact of wind farms on tourism. The review examined some 40 studies in the UK and Ireland. In addition, to ensure international experiences were also covered, the review examined reports from Denmark, Norway, the US, Australia, Sweden and Germany. As part of the review a number of the more important studies on attitude and value change were also examined. The findings of the review can be summarised as follows: • There is often strong hostility to developments at the planning stage on the grounds of the scenic impact and the perceived knock on effect on tourism. However developments in the most sensitive locations do not appear to have been given approval so that where negative impacts on tourism might have been a real outcome there is, in practice, little evidence of a negative effect. • There is a loss of value to a significant number of individuals but there are also some who believe that wind turbines enhance the scene. • An established wind farm can be a tourist attraction in the same way as a hydro-electric power station. This of course is only true whilst a visit remains a novel occurrence. • In Denmark, a majority of tourists regard wind turbines as a positive feature of the landscape • Over time hostility to wind farms lessens and they become an accepted even valued part of the scenery. Those closest seem to like them most. • Overall there is no evidence to suggest a serious negative economic impact of wind farms on tourists 3. Number of Tourists Affected The research programme focussed on identifying the impact of wind farms on tourism in areas that depend heavily on the sector in the local economy, in addition to assessing the impact on Scotland as a whole. The choice of which areas should be used as case-studies was made according to the importance of tourism and the landscape in those areas and the presence of wind farms either in operation or under construction. The locations for the person to person surveys were within four case study areas: The economic impact of Wind farms on Scottish tourism 5 Caithness &Sutherland; Stirling, Perth & Kinross; The Scottish Borders and Dumfries & Galloway. Not all tourists in an area will see a wind farm or stay in a room with a view of a wind farm1 at a time when it is visible. The Geographic Information Systems (GIS) study was concerned with estimating these numbers. 1 “In view” was defined as four or more wind turbines in vision The economic impact of Wind farms on Scottish tourism 6 The first element consisted of developing a Zone of Visual Impact (ZVI) for each wind farm that was identified as constructed, with permission for construction or currently under consideration after formal application. It did not cover those at the scoping stage or those that had been rejected. Summary table 3 shows the number of wind farms analysed in each area. Summary Table 1: Number of Farms and Turbines Considered Constructed and Permitted Applications Total Area Farms Turbines Farms Turbines Farms Turbines %Scottish Capacity Caithness & 4.4% Sutherland 6 60 8 125 14 195 Stirling, Perth 5.3% & Kinross 4 85 3 88 7 173 Scottish 5.4% Borders 7 157 6 217 13 274 Dumfries & 8.2% Galloway 8 134 10 246 18 380 Total 25 436 27 676 38 1022 23.4% As at June 2007 (obtained from http://www.restats.org.uk/2010_target/2010_Datasheets/Planning_Database_Extract_June_2007.xls) Using these as a starting point, the following tourist numbers were identified: Summary Table 2: Proportion of Tourists and Accommodation Affected Tourists Accommodation1 Percent Vehicles Percent Beds (th) Caithness & 81 % 64 9.83% 643 Sutherland Stirling, Perth & Kinross 85% 1,088 13.20% 1515 Scottish Borders 91.60% 287 13.40% 932 Dumfries & Galloway 98% 1,887 32.40% 2946 The vehicle numbers include long day visits and transitory journeys by tourists. Thus the Dumfries & Galloway and the Stirling, Perth and Kinross figures are high because of their position on the major tourist arteries, the M74 and the M9/A9. In the case of Dumfries and Galloway the current situation is only a negligible fraction of the future position. Partly this is the result of the development of the Robin Rigg offshore farm and its impact on the holiday 1 These figures are the total number of bed spaces in affected hotels.