An economic assessment of the controversial Lewis Wind Power (LWP) project by DTZ Consulting has revealed serious flaws in the developers’ own claims of the economic benefits.
A leading Scottish economist and former technical advisor to Western Isles Council has backed up the DTZ report, which estimates that the number of jobs created on the Western Isles by the wind farm would be a staggering 70% less than the developers claim. Furthermore, the negative impact on the local tourism sector has not been taken into account at all by LWP. If reductions in tourism are taken into account, the net employment impact of the scheme proposed for the Western Isles could be zero.
Lewis Wind Power have consistently made extravagant claims about the economic benefits that the world’s largest onshore wind farm could bring to Lewis and the Western Isles, arguing that these outweigh any environmental damage it would cause. Their own Environmental Statement contains an economic assessment by Regeneris Consulting, which states that 137 jobs will be supported during the development phase of the wind farm, and that a further 233 jobs will be supported once the wind farm becomes operational. However, the DTZ analysis, commissioned by RSPB Scotland, has found these figures misleading and hugely optimistic.
Stephen Lucas, Director of Economics at consultancy DTZ said: ‘The developer claims that over 230 jobs will result from the wind farm and various payments to landowners and the community. However, this assessment does not stand up to scrutiny. Our own assessment is that the development will support at best around 70 jobs in the Western Isles, and even this result ignores the potentially considerable harmful effects of the development on the Isles’ tourism economy and the jobs that visitors support. Factoring in the potential harmful effects on tourism – which the developer has not attempted to do – could mean that the LWP project could result in a net negative impact on the local economy.’
Strathclyde University’s Emeritus Professor of Economics Iain McNicoll described the original Regeneris view as ‘rose tinted’, adding that:
‘A reasonable interpretation of the evidence presented by DTZ and Regeneris would be that the expected value of the wind farm’s multiplier impact on the Western Isles is approximately zero. This means that this aspect of the project’s contribution is essentially neutralised in assessing its overall net worth. Thus, other issues become predominant in appraising the project and making a final yes/no decision.’
Overall, the DTZ analysis found that a more realistic estimate for job opportunities in the Western Isles, if the LWP development goes ahead, would be just 73 once operation commences, and these jobs could well be off-set by losses in tourism. DTZ asked Strathclyde University’s Emeritus Professor of Economics Iain McNicoll to quality assess and comment on the Regeneris and DTZ reports side by side, and he found that:
‘DTZ’s critique of Regeneris’s report is fundamentally valid, and though harsh is not unfair: important policy decisions are influenced by this type of work, and hence it is important that it is done well. Significant errors in both method and calculation made by Regeneris are correctly identified, and DTZ’s own analysis, though handicapped by non-access to data, etc., is superior.
‘In an applied policy sense, Regeneris’s errors would be less important if they were offsetting, but unfortunately they are not: in every instance where it imparts an upward bias to the estimates of positive gross impact.
‘…this type of ‘rose tinted’ appraisal is no longer acceptable to the Treasury; rather, what is required is a proper evaluation of alternative plausible scenarios, at a minimum recognising the existence and importance of downside risk.’
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