BVG Associates and Highlands University launch new economic impact model for UK offshore wind-ustry

A renewable energy consultancy has teamed up with Highlands University to create a new tool for modelling the full range of economic impacts of the UK wind industry.

Many industrial sectors publish employment impact figures – but these are often these are unrealistically high and lead to cynicism.

If the offshore wind sector is to cultivate political support and play a responsible role in the wider energy debate, it needs to have a transparent and straightforward methodology that produces credible figures.

So now BVG Associates and the Economic Intelligence Unit at the University of the Highlands and Islands (UHI) have worked together to develop a method of modelling economic impacts for offshore wind that is more robust and more transparent to the industry lay-reader than existing economic analyses.

Offshore wind is a maturing industry that is becoming truly global. For continued growth and to build local and government support, it needs a robust but easy way to demonstrate the economic benefits of projects. In particular, job creation can be a powerful way to gain support for projects.

Modelling of economic impacts usually relies on Government statistics and standard industry classification (SIC) codes. But SIC level data is too general for a maturing sector such as offshore wind and does not reflect fully relevant industrial capacity and capability. Accurate measurement of the economic impact of offshore wind development requires a comprehensive understanding of the supply chain together with economic and business rigour.

Alun Roberts, Associate Director, BVG Associates, explained: “It is better to seek to understand the supply chain than to model it using misleading generalised data.

“The industry needs a robust but comprehensible way to demonstrate the economic benefits of renewable energy projects locally and nationally if it is to retain local and government support.

“Many “conventional” impact methodologies rely on information and data that are not suitable for new industries, such as offshore wind.

“By understanding the offshore wind supply chain in detail and applying economic and business rigour to that understanding, we have developed a benchmark standard in measuring local and national value added from offshore wind developments.

“Our method can be applied to any level of geography – global, continental, country or region. It can be used to model the impacts of a single product or service, a set of projects, or the industry as a whole over a given period. It can also be applied to different industries, provided sufficient knowledge is available.

“It builds on BVG Associates’s existing UK content methodology to derive measures for other economic indicators such as gross value added (GVA), full time equivalent (FTE) jobs and earnings.

Steve Westbrook, Director of Economic Intelligence Unit, UHI School of Management, added: ,”The new methodology means governments, enablers, developers and suppliers can have confidence in the results.

 “Many industrial sectors publish employment impact figures. Often these are unrealistically high and the offshore wind sector needs to have a transparent methodology if it is to avoid cynicism.”

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