Economic analysis of offshore wind farms project on coastal recreational demand
The issue of the impact on coastal recreation demand of the offshore wind power generation has major economic implications, particularly for countries that are both characterised by high offshore wind energy potential and are a world leading coastal tourist destination. In this context, an on-site survey was conducted in Catalonia (Spain) during the 2012 summer season in order to examine the impact of an offshore wind farm project on beach recreation demand. We use a combined revealed and stated preference approach, which allows jointly modelling real and hypothetical recreation demands.
We find that respondents would significantly reduce their frequency of trips if an offshore wind farm were installed in the beaches where they were interviewed. However, they would react differently depending on the density of turbines and distance from the shore.
Catalonia received 13.2 million visitors in 2011 (12.6 million in coastal regions), with an average length of stay of 7.8 days. The tourism sector in Catalonia contributes 11% of the total GDP and 12% of the population of Catalonia is employed in this sector. Any reduction in the coastal recreation demand for whatever reasons could lead to a significant fall in tourism revenues, employments and consumer surplus.
A total of seven beaches (Barceloneta, Bogatell, Sabanell, Blanes, Gran de Palamós, Fosca, Castell and Golfet), out of 221, were selected to implement the survey according to a set of parameters including the level of occupancy/congestion and type of the surrounding environment.
Two significant attributes pertaining to offshore wind farms were identified: distance from the shore and density of turbines (i.e. number of windmills per farm). We opted for qualitative levels for attributes rather than quantitative ones. In addition, there is currently no approved offshore wind farm projects in Catalonia on which we could have based to define feasible attribute levels. These attributes and their levels generate four offshore wind farms scenarios: (1) Low density of windmills, settled far from the coast; (2) Low density of windmills, settled near the coast; (3) High density of windmills, settled far from the coast; (4) High density of windmills, settled near the coast.
Survey respondents were asked about how their usage of the beach would change under the given offshore wind farm scenario. Comparing their revealed trips to their response to the given scenario, the number of lost trips was estimated.
Our results highlight an important loss in consumer surplus of around €342 per-person per-season. The realisation of this project in some beaches would mainly result in a displacement of trips to other beaches in Catalonia without wind farms rather than beaches outside Catalonia.
The potential impact in terms of consumer surplus variation of an offshore wind farm project on recreation demand for the Catalan coast is studied by means of a combination of the travel cost method (TCM), a revealed preference (RP) approach, with the contingent behaviour method (CBM), a stated preference (SP) approach. On the other hand, the CBM uses hypothetical trip behaviour data to inform about the anticipated recreation demand in response to the implementation of a public policy related to the site in question. Combining both methods allows estimating the change in the recreation demand (in the recreational economic use value) that might occur with changes in attributes of the good.
Opposition to offshore wind farm projects often relates to the impact on tourism economy. It is evident from the results that such wind farms would significantly lead to a decrease in recreation demand, which implies a reduction in tourism revenues in localities concerned. However, our results also shown that the installation of offshore wind farms in some beaches would lead to a displacement of trips to other beaches in Catalonia without wind farms rather than beaches outside Catalonia. Consequently, tourism can be expected to increase in other Catalan coastal localities. Thus, at regional level, the impact of an offshore wind farm project on tourism economy could be moderate.
Relevance for Policy:
- Directive on Maritime Spatial Planning and Integrated Coastal Management (forthcoming)
- Environmental Impact Assessment Directive
- Marine Strategy Framework Directive
- Strategic Environmental Assessment Directive