Wind being cost competative helps the Scottish economic position. We have lots of wind. We have many people who are good at putting up wind turbines. Offshore we have literally more wind than we know what to do with and even more people who are good at putting up offshore structures. That ought to mean good employment opportunites. Fiscally, it implies good income tax revenue, lower welfare transfers, good revenues from other taxes. Being able to export the power probably helps the balance of trade. I think a factor in how economically beneficial on-shore wind is how many of the projects have a decent local community involvement and how well the local communities are able to use any revenues to develop other long-term economic activities in their communities.
That said - I think fracking and solar PV probably have a delaying impact on wind. I think the price of solar PV in excellent conditions will fall faster than wind. Scotland is not an excellent place for solar PV. Places with good solar PV potential are often developing economies with better growth rates than Scotland. So I think there is a model where capital investment in energy tends to flow to solar PV projects closer to the equator and wind doesn't get built out as fast.
Or putting solar panels in dangerous places like North Africa become unfashionable and Europe decides to become more energy self-sufficient and that means more wind. At the moment, if you could guaranteed that Morocco, Tunisia, Algeria and Egypt would remain stable places you could do long term business with the enery answer in the 2030's for Europe is probably to carpet the Sahara with solar panels and connect the European grid to North Africa. I would like that to happen but I'm not sure I see North Africa as a dependable energy partner at the moment.
Or all the things you have to do to make solar PV work also help wind. Storage and grid interconnection help wind capture better prices and counter-act the intermitency issues.
More broadly, Scottish industries are not particularly energy intensive but living in Scotland is relatively energy intensive because we are often a cold, dark, windy place with old, leaky housing. Relatively low and steadily falling energy prices probably don't affect the profitability of our industries much. They do have a beneficial effect on our standard of living, fuel poverty, domestic consumption and inequality. Poor people in Scotland tend to spend a large proportion of their income on energy. Lower energy prices are good for them, and given their marginal propensity to consume, good for local business. Lower energy prices probably imply lower levels of transfer payments and therefore either lower taxes or better public services.
Low energy prices are correlated with economic growth. High energy prices act like a tax or a break on economic activity. As economic activity picks up more energy is required, supply bottlenecks are hit and the price goes up. It may be that a move to more modular more capital intensive model of energy production changes the way that works. In any case lower and steadily falling global energy prices probably help the Scottish economy (excluding oil extraction) overall in that instead of paying for expensive petrol and electricity people are more likely to want to buy our whisky, food, tartan, hotels, computer games, pensions and general ambience.
It would be different if this were the 70's and there was still a huge amount of relatively cheap oil left that might end up not being recovered or if Scotland still had many people employed in coal mining.
It would be more helpful if the current government hadn't pulled the renewables support quite as quickly as it has. More wind-turbines in Scotland is probably a good thing and I think if they are not built between now and 2020 they are probably going to affected by the longer-term cost of shale gas and solar PV. I'm more confident of my ability to predict whether solar PV will be significantly cheaper in 2030 than 2016 than I am about my abilty to predict how wind performs.
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timeasmymeasure
no subject
Date: 2016-08-01 03:56 pm (UTC)That said - I think fracking and solar PV probably have a delaying impact on wind. I think the price of solar PV in excellent conditions will fall faster than wind. Scotland is not an excellent place for solar PV. Places with good solar PV potential are often developing economies with better growth rates than Scotland. So I think there is a model where capital investment in energy tends to flow to solar PV projects closer to the equator and wind doesn't get built out as fast.
Or putting solar panels in dangerous places like North Africa become unfashionable and Europe decides to become more energy self-sufficient and that means more wind. At the moment, if you could guaranteed that Morocco, Tunisia, Algeria and Egypt would remain stable places you could do long term business with the enery answer in the 2030's for Europe is probably to carpet the Sahara with solar panels and connect the European grid to North Africa. I would like that to happen but I'm not sure I see North Africa as a dependable energy partner at the moment.
Or all the things you have to do to make solar PV work also help wind. Storage and grid interconnection help wind capture better prices and counter-act the intermitency issues.
More broadly, Scottish industries are not particularly energy intensive but living in Scotland is relatively energy intensive because we are often a cold, dark, windy place with old, leaky housing. Relatively low and steadily falling energy prices probably don't affect the profitability of our industries much. They do have a beneficial effect on our standard of living, fuel poverty, domestic consumption and inequality. Poor people in Scotland tend to spend a large proportion of their income on energy. Lower energy prices are good for them, and given their marginal propensity to consume, good for local business. Lower energy prices probably imply lower levels of transfer payments and therefore either lower taxes or better public services.
Low energy prices are correlated with economic growth. High energy prices act like a tax or a break on economic activity. As economic activity picks up more energy is required, supply bottlenecks are hit and the price goes up. It may be that a move to more modular more capital intensive model of energy production changes the way that works. In any case lower and steadily falling global energy prices probably help the Scottish economy (excluding oil extraction) overall in that instead of paying for expensive petrol and electricity people are more likely to want to buy our whisky, food, tartan, hotels, computer games, pensions and general ambience.
It would be different if this were the 70's and there was still a huge amount of relatively cheap oil left that might end up not being recovered or if Scotland still had many people employed in coal mining.
It would be more helpful if the current government hadn't pulled the renewables support quite as quickly as it has. More wind-turbines in Scotland is probably a good thing and I think if they are not built between now and 2020 they are probably going to affected by the longer-term cost of shale gas and solar PV. I'm more confident of my ability to predict whether solar PV will be significantly cheaper in 2030 than 2016 than I am about my abilty to predict how wind performs.