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Onshore and Offshore Locations for Wind Power Development
Figure 1: Comparison of True and Expected Marginal Benefit Functions
undertaken. People who use the coastal zone are found to associate
offshore wind farms at short distances from the coast with higher
Expected marginal benefit functions
external costs compared with people who never or rarely use the
coastal zone.
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True marginal
benefit function
Should Preferences Matter?
Cost/kwh
Marginal cost function Do the above-mentioned studies give rock-solid evidence of the
Welfare loss
preferences for the location of future offshore wind farms or can
the energy planner afford to ignore them? Starting with the former, it
B
A
is appropriate to say that the number of preference studies for wind
b c a
power locations is still relatively low. Therefore, it would not be
Distance from shore (km)
appropriate to argue that politicians and decision-makers should
unambiguously locate all future offshore wind farms at large distances
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Source: Ladenburg, 2007.
from the shore.
impacts on nature. If these externalities are significant, as suggested by
the surveys, they can potentially drive a wedge between those locations What can they be used for then? To shed more light on this question it
that, from a pure wind power generation point of view, are cost-efficient is important to take into account that both onshore and (especially)
compared with the welfare economic best locations. offshore wind power projects have unique cost profiles that might be
sensitive to changes in the location of the project. For example, offshore
Offshore Wind Farms an energy planner might be tempted to allocate sites relatively close
As an alternative location to onshore, offshore wind farms have gained to the coast due to favourable seabed conditions compared with
increasing attention among energy planners. Offshore locations are further out. In that case, the SP survey results could provide input into
expected to reduce some of the above-mentioned costs associated the choice of location. More specifically, the preferences and the
with onshore turbines. These expectations are found to be more or less willingness to pay a price premium for locating offshore wind farms
in line with the preferences of people in the SP surveys carried out. As further away from the coast might be high enough to change the
such, people seem to hold significant preferences for offshore locations energy planner’s choice of location and thereby accept higher
irrespective of the type of onshore location (mountains, lowland and generation costs but fewer external costs by moving the choice of
along the coastline).
4,6
In other words, people have stated that they are location further away from the coast. However, on the other hand
willing to pay a price premium for having future wind farm the costs of moving wind farms further away might be so large that
development sited offshore. However, the preferences are not even when accounting for external costs the optimal location is close
unambiguous, as the relative preference for offshore locations is to the shore. Similar considerations could be interesting when finding
dependent on the specific site of the location. Just as in the case of suitable locations onshore.
onshore turbines, people seem to hold preferences for protecting
specific and pristine offshore sites, and in that case the external cost of However, again it is important to stress that the stated preferences do
offshore wind farms might exceed the external cost of onshore not point out the optimal location but merely give the energy planner
development depending on the choice of onshore location.
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better grounds for establishing a plan that balances both generation
and external costs. Without this information, potential large welfare
Perhaps an even more important feature that could have a strong losses could be an issue. This is illustrated in Figure 1.
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In the figure,
influence on the level of associated external costs for offshore wind the lack of information on preferences could potentially lead to welfare
farms is the distance to the shore. All things being equal, the closer to losses (areas A and B) if the expected (assessed by the social planner)
the shore, the larger the visual impact. Several studies have shown that marginal benefit function for reducing visual disamenities (external
a large part of the targeted population holds significant preferences for costs) is notably different from the true marginal benefit function.
locating offshore wind farms at large distances and preferably However, it is also appropriate to stress that completely ignoring the
completely out of sight.
8,9
In this sense, the external costs of offshore information on external costs entailed in the SP studies could have
wind farms might be high if the offshore wind farms are located negative effects on long-term acceptance of turbines. Accordingly,
relatively close to the shore. This could be particularly evident if the experience with turbines close to the shore can have negative effects
wind farm is located in areas where many recreational activities are on perceptions and attitudes towards wind power.
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n
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