Do offshore wind farms yield a net benefit for society? To improve the clarity of public debate on this issue, CE Delft and Ecofys have analysed all the reports published in recent years on the impact of wind power on economic welfare. The analysis was commissioned by the Top Consortium on Offshore Wind Knowhow and Innovation (TKI-WoZ).
Although all the reports present so-called social cost-benefit analyses (SCBA), there are major differences in the assumptions made and thus in the ultimate assessment of whether or not wind power is of benefit to society. One key metric in any such assessment is CO2 emissions reduction. Some of the studies assert that wind power leads to no net CO2 savings, because lower emissions in power generation lead to higher emissions elsewhere because of the dynamics of the European emissions trading scheme (ETS). However, the present report indicates there are indeed good reasons for including CO2-related benefits:
- The ‘emissions space’ provided by the ETS is not being fully utilised: for years now, emissions have been lower than the cap, so if more space is created this will not necessarily be used.
- Lower emissions may lead to the cap being tightened in the future.
This report also shows that the geographical scope of many analyses is unsuitable for the issue at hand, with a national ‘system boundary’ being adopted. Because climate policy is a global problem, though, with the Netherlands acting in concert with other European countries, we live in a world of mutual pledges and agreements on emission cuts and renewable energy. If the Netherlands opts not to build offshore wind farms, thus reneging on its pledges, it can no longer be presumed that other countries will do so, which could have multiple consequences. Emissions could increase, compelling the Netherlands to invest more in climate adaptation, for example, and the country could be financially penalised or become isolated within the EU, which could in turn have repercussions for other dossiers. A robust SCBA should encompass all these issues.