Are near shore wind farms compatible with tourism?

Meredith Blaydes Lilley, Jeremy Firestone and Willett Kempton (of the Centre for Carbon-free Power Integration, College of Earth, Ocean, and Environment, University of Delaware) have published an interesting study on how the building of near shore wind farms may affect the tourism potential of beaches and waterfronts.

They surveyed more than 1,000 randomly sampled, out-of-state tourists at Delaware, USA beaches in 2007. After providing respondents with wind turbine project photo-simulations at several distances, they inquired about the effect development would have on visitation. Approximately one-quarter stated that they would switch beaches if an offshore wind project was located 10 km from the coast, with avoidance diminishing with greater distance from shore. Stated avoidance is less than: avoidance with a fossil fuel power plant located the same distance inland; attraction to a beach with offshore wind turbines; and the percentage stating they would likely pay to take a boat tour.

The introduction to this paper reads:

Beginning in 1980 with a “few experimental turbines” and expanding to more than 25,000 MW of installed capacity, the domestic wind power industry has exceeded even the most optimistic expectations held in the early 1990s for its potential growth. During the past four years, the United States has led the world in installed wind energy capacity.

Offshore wind is of particular interest today in the Eastern US, because it is a very large resource close to urban load centers that lack other large, cost-effective renewable resources. Despite offshore wind power’s technical viability, proven in 19 years’ experience in Europe, the US has yet to commission an offshore wind project. The delay is due in part to anticipated public objection to any offshore project, following the widely publicized Cape Wind proposal, with its well-funded and politically connected public opposition. Nevertheless, other states have begun moving forward with offshore wind development. Texas first approved offshore wind development in 2005, and 2008 was a breakthrough year, with Delaware, Rhode Island, and New Jersey all accepting bids for offshore wind power. In Delaware specifically, Bluewater Wind, LLC has recently entered into a power purchase agreement (PPA) with the regulated utility, Delmarva Power & Light, for the purchase and sale of energy from an offshore wind farm to be constructed and operated offshore by Bluewater. The wind turbines would be located approximately 22 km from the Delaware coast.

The Local Economic Importance of Coastal Tourism

One oft-claimed, but as yet unsubstantiated, criticism of wind power is its perceived negative impact on local tourism. For example, a 2005 study found that a sizeable percentage of Cape Cod residents (more than 40%) believe the Cape Wind project will negatively impact local tourism. However, as described below, this effect has not been observed at European offshore wind sites, and indeed, evidence suggests that offshore wind power actually boosts local economies by drawing increased numbers of visitors.

Any effect on local tourism must be distinguished from the effect of offshore wind farms on tourism more generally. While a wind farm might decrease tourism in the locality, tourism would presumably increase in another location, and although overall revenues would not necessarily change, there would be a loss in consumer surplus among those that switch beaches. In future work, we may examine that issue; here we are focused on the local effects—that is, the effect on the adjacent community and the state.

Greater clarity as to the potential impact of offshore wind power on beach tourism revenues would be valuable given that beach tourism contributes substantially to the economies of numerous US coastal states. Indeed, beaches are the nation’s lead tourist destination, and due to this tremendous popularity, coastal states garner approximately 85% of tourism-related revenues. In Delaware’s economy, tourism plays a critical role. Expenditures from out-of-state, US visitors to Delaware reached $2.4 billion in 2006, comprising 75% of the state’s total tourism sales. Also in 2006, economic activity in the Delaware travel and tourism sector created approximately 38,000 jobs, both direct and indirect, accounting for 8.7% of total state employment and ranking tourism as the state’s 5th largest employer.

Moreover, the majority of these tourism revenue and employment gains are attributable to Delaware’s beach region, with beach tourism expenditures in 2004—$627 million— representing 40.6% of total tourism expenditures. In 2001, Delaware’s ocean beaches received an estimated 4.8 million person trips, generating $665 million in expenditures and $409 million in consumer surplus. In 2004, the majority of out-of-state trip expenditures in Delaware’s beach region fell in the lodging sector (as compared to the food, shopping, entertainment, and transportation sectors) with tourists spending $296 million (47% of total expenditures) on accommodation.

As an economic comparison, Bluewater indicated that a 600 MW wind project off the coast of Delaware would employ 500 workers for two years during the construction phase and 80 on an ongoing basis. Proponents of wind power therefore point to the employment benefits of projects as an economic plus for the local economy. On the other hand, there might be local job losses if tourists are diverted out of state, but a 2% drop in tourism, for example, would not necessarily result in a 2% drop in local employment. Moreover, although a 600 MW project would generate approximately $200 million per year ($2007) in electricity sales, much of the revenues would likely be utilized to pay off loans that would have been put toward the purchase of wind turbines, which would mostly likely have been manufactured in Europe.

Research Objectives

State and local governments in the US, and national and local governments in the European Union, are typically concerned about job retention and economic policies. Public policy decisions require good data on the negative effects of offshore wind development and potential economic losses as well as economic gains. The purpose of this study is thus to improve the estimates of the likely effects (positive and negative) of wind development on local tourism. Although this study examines this question in the context of wind power development off of the Delaware coast, it may more broadly shed light on the expected economic effects of wind power development at other tourism-dependent sites, given the dearth of analysis of this question at land-based, let alone offshore, installations.

The findings complement those of a 2006 mail survey eliciting the same views and opinions on offshore wind power held by Delaware residents and thus in tandem the two present a more complete picture of the implications of such development. This article will compare the findings of this out-of-state tourist survey with those of its counterpart Delaware resident survey.

Read the full paper here in PDF format.

Citation: Lilley M.B.,Firestone J., Kempton W. The Effect of Wind Power Installations on Coastal Tourism. Energies. 2010; 3(1):1-22

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